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BLG Defeats Class Action Authorization for Banking Clients

Montréal, (August 9, 2019) — Significant class action victory for BLG: Authorization was successfully defeated on behalf of firm clients Bank of Montreal, Bank of Nova Scotia, Scotia Mortgage Corporation and Tangerine Bank in a mortgage prepayment fee proposed class action in Québec. The Court found that mortgage prepayment fees based on interest rate differential (IRD) calculations that exceed three months’ interest are not illegal and that banks aren’t prevented from factoring mortgage rate rebates into the IRD calculation. The Court further decided that prepayment clauses are regulated by the Bank Act and the Financial Consumer Agency of Canada and that such clauses are not abusive, incomprehensible or disproportionate. The official reasons and decision can be consulted here and an unofficial BLG translation is available.

BLG’s Mathieu Lévesque, Guy Pratte, Patrick Plante and Anaïs Bussières McNicoll acted for Bank of Montreal, and Alexander De Zordo, Karine Chênevert, Jean Saint-Onge and Ève Gaudet acted for ScotiaBank, Scotia Mortgage Corporation and Tangerine Bank in this groundbreaking win.

About Borden Ladner Gervais LLP

As the largest, truly full-service Canadian law firm, Borden Ladner Gervais LLP (BLG) delivers practical legal advice for domestic and international clients across more practices and industries than any Canadian firm. With 800 lawyers, intellectual property agents and other professionals, BLG serves the legal needs of businesses and institutions across Canada and beyond — from M&A and capital markets to disputes, financing, and trademark and patent registration.


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Tamara Costa
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Borden Ladner Gervais LLP
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