Banks and other financial institutions, being one of the highly regulated sectors, must act responsibly in all their dealings with their customers. But when the relationship between a bank and a client goes sour, can a client sue their own banks in Canada? If so, how can lawyers that sue banks help these clients?
Can you sue a bank in Canada?
Yes, clients or customers may sue their banks in Canada. There are many reasons that allow clients to sue their banks under Canadian common law and federal statutes.
Also, it is upon the client to prove that such causes exist to get a favorable decision from the court. For this reason, lawyers that sue banks must be sought first before taking any action.
In any case, below are some of the common reasons for suing a bank in Canada, and the process in doing so.
Reasons for suing a bank in Canada
There are many reasons allowing you to file a case – either civil or criminal, or both – against your bank. Some of these include:
- Offenses under Canada’s Criminal Code: such as fraud and other fraud-related offences, either in the Criminal Code or in other laws (e.g., Competition Act, Bankruptcy and Insolvency Act).
- Offenses under Canada’s Bank Act: any violation of the Bank Act’s provisions. This also includes giving an undue preference to a bank’s creditor and the unauthorized use of a bank name.
- Other offences: such as money laundering, disputes arising out of a contract, regulatory disputes, and brokerage or dealership disputes.
Watch this video of an old case about the violations committed by bank employees in violation of Canada’s Bank Act:
If you’re aggrieved by your bank or by their employees, consult with lawyers that sue banks. Reach out to one of the Lexpert-Ranked best banking and finance lawyers in Québec if you’re in Montréal, Québec City, or nearby areas.
Process of suing a bank in Canada
Suing your bank or any financial institution will first involve filing a complaint with your bank. If this fails, then you can resort to filing a case in court.
Know if your bank is federally regulated
First, know if your bank or your financial institution is federally regulated. Most banks fall under federal jurisdiction. You can find a list on the Office of the Superintendent of Financial Institutions (OSFI) website.
Aside from banks, federally regulated institutions in Canada also include:
- Trust companies
- Loan companies
- Insurance companies (both life and property)
File a complaint with the financial institution
Under Canada’s Bank Act, all banks and financial institutions must have a complaint-handling process to address any complaints from their customers.
This complaint-handling process may differ from every other bank or financial institution. The Bank Act and the regulations of Financial Consumer Agency of Canada (FCAC) provides for the following mandatory parts of this process:
- Complaint-handling process: you must be given all the necessary information regarding your bank’s complaint-handling process.
- Written acknowledgment: you must be provided with a written acknowledgement of the date when the bank received your complaint.
- Disclose the External Complaints Body (ECB): your bank must also inform you of the ECB where you can escalate your complaint if you’re not satisfied with their complaint-handling process.
Below is the most common and simplest complaint-handling process that you may encounter:
1. Speak to a representative:
The representative will initially help you with your complaint and must provide solutions. If you’re not satisfied with their proposal, proceed to the next step.
The representative must resolve your complaint within 14 days; otherwise, you can proceed to the next step.
2. Speak to a designated employee:
The representative must refer you to an employee assigned to deal with complaints against the bank. This employee may be part of its complaint-handling department.
The designated employee or the bank must deal with your complaint within 56 days (including the 14 days mentioned above). If the bank does not act on your complaint within 56 days, or if it closes your complaint but you’re not satisfied, you may now proceed in filing a complaint with their ECB.
3. File a complaint with the bank’s ECB:
Each ECB will have its own process. Complaints may be submitted online for your convenience. This will include submitting the documents you received from your bank’s complaint-handling process.
Banks are required to be a member of an ECB, which may either be the:
File a case in court
If you’re not satisfied with your bank’s complaint-handling process, or with the ECB’s solution, you may now consult with lawyers that sue banks to file a case in court.
Suing a bank in Canada may either be a civil case or a criminal action.
To determine whether your case is a civil case or criminal action will depend on the legal redress that you’re asking for. For this matter, you must consult with lawyers that sue banks.
Filing a class suit or class action against a bank can also be your option. Here, it is necessary that you and your co-plaintiffs have a similar cause of action against a similar bank. The legal redress that all of you are asking for must also be similar. Read our guide on joining a class action lawsuit for more on this option.
Can you sue a bank in other countries?
The process is different if you’re a Canadian who wants to sue foreign banks, such as those in the USA or in the UK.
Suing a bank in the US
Generally, consumers cannot sue a bank in the US. However, there are other legal options available when a consumer wants to file a case or complaint against a US bank:
- File an internal complaint with the bank
- File a complaint with federal regulatory agencies, such as the Federal Reserve
- File a case in small claims court
- Submit the case for arbitration
Suing a bank in the UK
While a consumer can file a legal suit against a bank in the UK, it must first undergo:
- Filing an internal complaint with the bank
- Filing an administrative process
An administrative complaint may be filed with the Financial Ombudsman Service through their website.
How can lawyers that sue banks help me?
Lawyers that sue banks have the necessary legal knowledge that will help you go through the process of filing a case in court.
Since Canada’s legal system involves common law, these lawyers are familiar with the recent case law and other legal developments that will help you with your case.
In addition, lawyers that sue banks can also help you prepare your documentary evidence and court submissions. This is to effectively build up your case to ensure that the legal redress that you’re asking the court will be favorably granted.
Looking for lawyers that sue banks to help you with your case? Reach out to the best banking and finance lawyers in Canada as ranked by Lexpert.