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Editorial: Bread crumbs

A Loblaws store is seen Monday, March 9, 2015 in Montreal. Loblaw Companies Ltd. (TSX:L) says it is laying off 500 workers from its office operations. Ryan Remiorz/THE CANADIAN PRESS
A Loblaws supermarket. — CP file photo

Self-interest: it’s a fascinating and all-too-common thing.

The Loblaws grocery chain, including Dominion stores in this province, is offering $25 in-store cards for people who were affected by a long-running bread price-fixing scheme across the grocery industry. (Other chains deny that claim.)

But lawyers trying to launch class-action lawsuits over the price fixing claimed yesterday that the deal had strings attached, with one going so far as to say the cards were “a misleading and deceitful public relations” campaign.

But who do the strings lead to, and what’s the warning about?

This is the clause the lawyers are most upset about: “Agreeing to this release will not impact your right to participate in any class actions relating to an overcharge on the price of packaged bread. However, doing so will mean that twenty-five (25) dollars will be deducted from any compensation that you may otherwise be entitled to receive in any class action judgment against, or settlement with, Loblaw relating to any overcharge on the price of packaged bread in the period between January 1, 2002 and March 1, 2015.”

You would still get your full share of any class-action settlement — essentially, you would receive $25 of it in advance, with the caveat that you would have to use it to buy merchandise at a Loblaws store.

Would that be a bad thing? You’d still have the equivalent of the money you’d get regardless, ahead of the court process.

The lawyers argue that, since the card is only good at Loblaws stores, it’s not really a settlement; instead of being redress, it’s disguised marketing.

They might have a point.

But what about the lawyers themselves? Often, in class-action suits, lawyers get paid by contingency: their payment is a percentage of the total settlement, with the remainder split up among the members of the affected class.

The lawyers argue that, since the card is only good at Loblaws stores, it’s not really a settlement; instead of being redress, it’s disguised marketing.

This is a slam-dunk of a case — Loblaws has already admitted fault.

But if everybody — estimated at 6 million Canadians — takes the $25 advance payment, there’s no way that the lawyers could argue that they were an integral part of getting that money. That would be $150 million they wouldn’t get a share of.

So, are they more concerned about where you can spend your share of the eventual settlement, or that they will get their share of it?

It’s an interesting question.

Self-interest is fascinating indeed.

Just about the only non-self-interested part of this whole equation? A growing movement for consumers to register for the card and, when they receive it, donate the card to a local food bank. Loblaws hasn’t said that they would allow that transfer, though the company has said it would welcome people using the cards to buy food and donate it.

But if they blocked the transfer of the cards to food banks? Well, that would be an even bigger PR nightmare.

 

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