Sunday, July 27, 2014

2 CIBC class action lawsuits - another in the pipe

CIBC Mortgages Inc., a subsidiary of CIBC bank, has just been named the subject of a pending class action lawsuit.

What is this class action about?

A class action was commenced by Siskinds LLP in October 2011 against CIBC Mortgages Inc. regarding its practices for calculating prepayment penalties on mortgages entered into across Canada since 2005.

The Statement of Claim alleges that CIBC applied terms and conditions to certain mortgage contracts to allow it unfettered discretion for calculation of mortgage prepayment penalties. It is further alleged that the quantification of prepayment penalties applied by CIBC are in breach of the mortgage contracts. The action applies to CIBC mortgages as well mortgages through related entities such as Firstline Mortgages and President’s Choice Financial.

"A B.C. Supreme Court judge has certified a class-action suit against CIBC Mortgage Inc. in connection with its prepayment penalties. In a June 30 judgment, Justice Jeanne Watchuk ruled that Erin Sherry is a “very appropriate” representative plaintiff in the case after she was hit with a $47,868.91 prepayment fee when she paid off her mortgage in full.

Watchuk’s decision also stated that “the certification is conditional on the plaintiff establishing for the court an identifiable class which is not overbroad.” She instructed lawyers for both parties to set a schedule to determine how to define which customers would be eligible to be included as plaintiffs in the class-action suit.
"The ruling noted that CIBC did $29 billion worth of mortgage business in B.C. in 2011. CIBC revealed to the court that between 11 percent and 15 percent of mortgages involved prepayments each year between 2008 and 2011. There would be between 5,800 and 11,600 prepayments made in British Columbia each year.”

On June 26, 2012 a class action for unpaid overtime was certified. The Bank of Nova Scotia quickly settled. CIBC not so much.


THIS NOTICE may affect your rights – please read it carefully

On June 26, 2012 the Court of Appeal for Ontario certified the lawsuit of Dara Fresco v. Canadian Imperial Bank of Commerce (“CIBC”) as a class action. The lawsuit will now proceed to a trial of the common issues on a date to be set by the Court.