Canada Dry settled in court for $200,000 with a B.C. man who claimed the company falsely advertised its ginger content to have medicinal properties.
Most of the $200,000 will be going to a legal foundation.
The plaintiff, Victor Cardoso, started a class action lawsuit on Jan. 21, 2019, on behalf of all Canadians outside of Quebec, arguing that Canada Dry’s label was misleading. This came after similar lawsuits were filed in the U.S. Shortly afterward, two similar cases popped up in Quebec and Alberta.
Cardoso alleged that the marketing of the ginger ale as “Made from Real Ginger” was deceptive because the product contained no ginger, according to court documents. The argument was later shifted to the ginger ale containing “negligible” amounts of ginger.
“They do buy actual ginger, but then what they do is they boil it in ethanol, and that essentially destroys any nutritional or medicinal benefits,” Mark C. Canofari, one of the lawyers from Boughton Law Corporation who represented Cardoso’s claim, told CTV News.
Ginger is commonly used as an herbal remedy. There’s strong evidence that ginger can relieve nausea, as well as weaker evidence for other benefits, such as acting as an anti-inflammatory.
The owners of the ginger ale, Canada Dry Mott’s, produced documents showing it was made with ginger derivatives. The fact that the ginger ale contained a derivative took a lot of steam out of the lawsuit, regardless of how much was actually present in a given can of Canada Dry ginger ale.
After two years of effort and hundreds of thousands of dollars in legal expenses, the settlement won’t even cover the legal fees. Consumers won’t be compensated in any way and there’s no sign that Canada Dry will change its advertising. According to the court documents, Canada Dry Mott’s Inc. “expressly denies liability and is not required to change its product labelling or advertising for products marketed in Canada.”
The resolution applies to the Alberta lawsuit and heads off further suits filed with the same claims of false advertising.
Of the $200,000, approximately $100,000 will go toward legal fees, even though Cardoso’s counsel spent more than $220,000 researching and litigating the case at $950 per hour. The lawyers accepted the case on a contingency basis, meaning they could only pursue a share of the settlement — between around 30 and 40 per cent.
Cardoso and the Alberta plaintiff, Lionel Ravvin, will get small honorariums of $1,500 to recognize the work they did researching for the case.
The B.C. judge argued that courts need to avoid the perception that only lawyers benefit from legal proceedings.
“I am concerned that an award whereby counsel receives more than the amount being paid… on behalf of their collective client class could be viewed adversely by the public,” Justice Karen Douglas wrote. “The ultimate purpose of the class action vehicle is to benefit the class, not their lawyers.”
The remainder of the $200,000 will go to the B.C. Law Foundation, a non-profit organization that does work such as providing legal aid and funding law libraries.