Quebec Court approves settlement in class action over the sale of extended warranties

The Quebec Superior Court approved a settlement in a class action lawsuit over the sale of extended warranties without informing Quebec consumers about their legal warranty rights.

The dispute centred around the sale of extended home appliances and consumer electronics warranties on Wayfair LLC's website and mobile application without informing Quebec consumers about Quebec’s legal warranty under the Consumer Protection Act (CPA).

The court had authorized the class action for all consumers residing in Quebec who purchased an extended warranty from Wayfair between February 7, 2019, and October 31, 2022. This authorization followed Wayfair’s implementation of business practice changes in October 2022 to provide Quebec legal warranty notices before selling extended warranties.

The parties reached an initial settlement agreement, but it was soon discovered that the compensation provision did not reflect the essential terms. An amended agreement was filed, and new notices were issued to class members. The court received seven opt-out forms from class members, with no objections to the settlement.

The modified settlement agreement stipulates that Wayfair will issue e-store credits worth at least $22.50 for each extended warranty purchased by class members during the specified period. This settlement amount represents 50 percent of Wayfair’s value of commerce for the sale of these warranties. The court highlighted that class members would benefit from both the extended warranties and the additional compensation without any expiration date on the e-store credits.

Class counsel and defendant’s counsel recommended the settlement, emphasizing that it benefits the class members and aligns with the principle of proportionality. The agreement avoids prolonged litigation, which would have incurred significant costs and required expert testimony.

Considering the circumstances, the Superior Court found that the modified settlement agreement was a favourable result, noting that it promotes judicial economy and proportionality. The settlement includes Wayfair assuming all administration expenses, ensuring that the settlement amount remains fully available to the class members.

Additionally, the court approved the payment of class counsel’s fees, amounting to $236,470 plus taxes, as part of the settlement. This fee represents 25.24 percent of the total settlement value and aligns with the professional mandate agreement signed by the plaintiff and class counsel.