Judge rules $25 gift card terms from Loblaw not misleading

An Ontario judge has ruled that it's too early to determine the enforceability of Loblaw Companies Limited's policy that consumers who receive a $25 gift card from the company waive their right to that sum in possible future settlement money from a bread price-fixing scheme class-action lawsuit.

Ontario Superior Court of Justice Edward M. Morgan dismissed a motion challenging the terms of Loblaw's gift card plan.

READ:Watchdog raids offices of grocery retailers in price-fixing probe

The company announced Monday that registrants must agree to a release saying they discharge Loblaw, its parent company George Weston and others from relief to the extent of $25 in connection with their involvement in an alleged bread price-fixing arrangement from Jan. 1, 2002 to March 1, 2015.

Morgan said in his ruling that he's not in a position to know what, if any, an eventual settlement will entail, so it's too soon to declare the release enforceable or not.

READ: Loblaw, George Weston admit to bread price fixing

Loblaw spokesman Kevin Groh said the "ruling puts to rest the nonsensical claim by class-action lawyers that our $25 Loblaw Card is misleading and confusing," when the company is trying to put money in affected consumers' hands quickly.

The law firm which brought the action in front of the court, Strosberg Sasso Sutts LLP, said the ruling was a victory for consumers as Loblaw would not be able to deduct the gift card value from any future settlement pay out "unless it demonstrated it is fair to consumers as part of an overall resolution of their price-fixing claims."

Loblaw expects three million to six million Canadians will receive the goodwill gesture and that it will book a $75-million to $150-million quarterly charge in relation to the program.

George Weston and Loblaw admitted last month to participating in an industry-wide bread price-fixing arrangement for over a decade, but received immunity after tipping off Canada’s competition watchdog.