4 Comments
Posted in:

SCC Strikes Blow at Mail Sweepstakes

by
More posts by John »

“You may have won a million dollars!” … or not, if you don’t happen to have the pre-selected winning number. Various bonus prizes for early birds are also offered. This is a common marketing device, but the Supreme Court of Canada held unanimously in Richard v Time 2012 SCC 8 that it offended the Quebec Consumer Protection Act. Mr. Richard got $1000 in damages for being misled (no misles were involved), plus $15,000 in punitive damages, plus his costs at trial (where he had won) and on appeal (where he had lost), and on a solicitor-client basis in the SCC.

The Quebec Court of Appeal had found that no consumer ‘with an average level of intelligence, scepticism and curiosity’ would have been deceived by the mail. The SCC held that this is not the proper test for consumer protection. At para. 75, the court said ‘Such a test would make it possible to exonerate a merchant who is lucky enough to be sued by a consumer of above‑average intelligence.’

Slaw readers, who would all fall into that category, may breathe more easily now that the SCC has asserted that they are still covered by consumer protection legislation. The future of sweepstakes marketing may be a different question. One recalls the cartoon of the man opening such a letter, which began ‘You may already have won ten million dollars! If you believe that, you will believe anything, so read on …’.

The marketing material sent to the plaintiff is reproduced at the end of the SCC’s decision. There is a very big difference between the prominence of the ‘you have won’ message and the ‘well, maybe not’ message.

Comments

  1. Howard Knopf
    February 28th, 2012 at 12:24 pm

    John:

    I think that the big question is whether this will resonate outside of Quebec if there is no similar statute.

    Or will this be something like the “girl on the stairs” outside public place photograph privacy case which turned on a Quebec statute and has not been followed by the courts in other provinces? See Aubry v. Éditions Vice‑Versa, [1998] 1 S.C.R. 591 http://scc.lexum.org/en/1998/1998scr1-591/1998scr1-591.html

    Regards,

    Howard

  2. David Cheifetz
    February 28th, 2012 at 1:14 pm

    Howard,

    It seems to me that, unfortunately, what’s going to immediately resonate (nice choice of verb) outside of Quebec, is a series of one-liners for stand-up comedians, such as “Forrest Gump”‘s “stupid is as stupid does”, given

    [71] Thus, in Quebec consumer law, the expression “average consumer” does not refer to a reasonably prudent and diligent person, let alone a well‑informed person. To meet the objectives of the C.P.A., the courts view the average consumer as someone who is not particularly experienced at detecting the falsehoods or subtleties found in commercial representations.

    Informed lawyers, of course – most of whom aren’t successful stand-up comedians, which is likely why they are still lawyers – will remember that the purpose of consumer protection legislation is to eliminate or at least modify “buyer beware” presumptions, look deeper, and see the next paragraph.

    [72] The words “credulous and inexperienced” therefore describe the average consumer for the purposes of the C.P.A. This description of the average consumer is consistent with the legislature’s intention to protect vulnerable persons from the dangers of certain advertising techniques. The word “credulous” reflects the fact that the average consumer is prepared to trust merchants on the basis of the general impression conveyed to him or her by their advertisements. However, it does not suggest that the average consumer is incapable of understanding the literal meaning of the words used in an advertisement if the general layout of the advertisement does not render those words unintelligible.

    The Court had to realize how the result will be seen outside of law’s cloisters. That’s undoubtedly another one reason for the first part of para. 11.

    [11] The appellant testified that he had carefully read the Document twice the day he received it and had concluded that he had just won US$833,337. The next day, he took the Document to work to ask a vice‑president of the company he worked for, whose first language was English, whether he had understood the Document correctly. The vice‑president agreed that the appellant had just won the grand prize referred to in the Document.

    The first reason no doubt, was to make clear this wasn’t just a language issue and to perhaps imply that the layout, on first impression, would fool even the non-credulous. (We’ll ignore “Peter Principle” jokes, here, please.)

    Regards,

    David

  3. John Gregory
    February 28th, 2012 at 1:20 pm

    Is there any reason to believe that the beneficiaries of other provinces’ consumer protection laws are any different from the Quebec consumers referred to by the SCC? Must consumers in the ROC be more wary, or less ‘credulous and inexperienced’, before they can invoke their statutes?

  4. David Cheifetz
    February 28th, 2012 at 1:48 pm

    Kidding aside, para. 65, 67 & 68 of the reasons should be relevant outside of Quebec.

    [65] The C.P.A. is one of a number of statutes enacted to protect Canadian consumers. The courts that have applied these statutes have often used the average consumer test. In conformity with the objective of protection that underlies such legislation, the courts have assumed that the average consumer is not very sophisticated.

    …

    [67] The general impression test provided for in s. 218 C.P.A. must be applied from a perspective similar to that of “ordinary hurried purchasers”, that is, consumers who take no more than ordinary care to observe that which is staring them in the face upon their first contact with an advertisement. The courts must not conduct their analysis from the perspective of a careful and diligent consumer.

    [68] Obviously, the adjectives used to describe the average consumer may vary from one statute to another. Such variations reflect the diversity of economic realities to which different statutes apply and of their objectives. The most important thing is not the adjectives used, but the level of sophistication expected of the consumer

    .

    so who knows.

    Still, that form of magazine-purchase come-on has been around for years. The other “major” version that I recall, immediately, is the Readers’ Digest version. (My parents were religious players of that one, unsuccessfully, naturally). The Court’s reduction of the punitive damages award from $100,000 to $15,000 could be taken, without too much reading between the lines, as some indication that some members of the court were somewhat skeptical – (I’m bowing to the spelling checker and not typing “sceptical”, regardless of the homononym) of the merits of the claim that plaintiff was, in fact, misled. If this were a common law case, the SCC would have been bound by the trial judge’s findings of fact unless there was reversible error. I can’t tell from the SCC reasons how that problem is handled in Quebec law because it seems as if the SCC, itself, was making findings of fact.