If the class action suit against three broker channel players gets the go ahead, the potential number of plaintiffs could soar about 150,000, says the lawyer handling the case.
“There are so many variables, and a trial date would be a couple of years down the road, maybe more,” Vancouver lawyer Bruce Lemer told MortgageBrokerNews.ca. “But potentially one of the claims of the suit could involve as many as 170,000 plaintiffs.”
For now, the lead plaintiffs are Tony Di Paolo, who bought into the Mortgage Protection Plan
in July of last year, and Normand and Teija Lacasse who purchased the product back in 2009. Those accused of fraud in the suit are Manulife, Benesure, Davis + Henderson and could face damages of more than $2 billion if the suit is certified and Lemer ultimately proves guilt, something yet to be accomplished.
The tens of thousands of potential plaintiffs Lemer was referring to can be traced to an October 24, 2012, Manulife press release that identified “premiums in excess of $65 million from more than 170,000 Benesure Canada Inc. clients,” when Manulife announced its purchase of Benesure.
The case, filed in Ontario Superior Court on February 27, is currently seeking certification as a class action.
“There are many stages to a class action,” says Lemer. “First we need to get the case before a management judge, then we move to a certification hearing.”
There’s also the matter of proving the claims have merit.
The allegations included in the suit state that Manulife and Benesure presented “deceptive” form documents to clients and sent letters that appeared to be from the client’s mortgage broker and that “strongly” recommended purchasing creditor life insurance. The action also alleges Davis + Henderson transmitted personal information about mortgage clients to Manulife and Benesure without client consent. (This information was purportedly taken from mortgage applications, which D+H controls by virtue of owning the Expert mortgage origination platform.)
D+H has strongly denied the allegations, issuing this statement: “The allegations that have been made against D+H in this suit are completely without merit. D+H will be vigorously defending itself against these allegations.”
Although Lemer could not comment on the particulars of his case, he’s confident it supports the move to seek class action certification.
Manulife has stated that “it would be inappropriate to comment” on the litigation while it is still before the courts.