BC Court of Appeal Denies Airbnb’s Bid to Pause Class Action Proceedings Pending Appeal
In a significant legal setback for Airbnb, the British Columbia Court of Appeal has refused the company’s request to halt a class action lawsuit while it appeals a lower court’s decision. The ruling means the case, which alleges Airbnb operates without proper licensing in Canada, will proceed despite Airbnb’s ongoing appeal.
The class action, led by plaintiff Margot Ware, was certified by the BC Supreme Court in December 2024. It represents Canadian consumers who used Airbnb’s services, claiming the company charges service fees without the necessary licenses under real estate, travel, and money services laws.
Airbnb and its Canadian subsidiary, Airbnb Canada Inc., had sought a stay of proceedings, arguing that continuing the case could lead to unnecessary costs and create the impression they accept BC courts’ jurisdiction. They warned this could expose them to more lawsuits in the province.
However, the Court of Appeal rejected these arguments, emphasizing that the plaintiffs’ interests in advancing the case outweighed Airbnb’s concerns. The court also dismissed the company’s claims of “irreparable harm” as speculative.
With the stay denied, the class action will move forward in BC courts, with discovery and pretrial steps continuing. The outcome of Airbnb’s appeal on certification and jurisdiction remains unresolved, leaving the case’s future uncertain.
The lawsuit raises key questions about Airbnb’s regulatory compliance in Canada. If successful, it could force the company to refund fees or pay damages to consumers and set a precedent for how online rental platforms operate in the country.
This decision underscores the BC judiciary’s willingness to hold international tech companies accountable under provincial laws, even as Airbnb challenges the court’s jurisdiction.
For now, the legal battle continues, with potential implications for both Airbnb’s operations in Canada and the broader regulatory landscape for digital platforms.
Background and Certification of the Class Action
The class action lawsuit against Airbnb, led by plaintiff Margot Ware, was initiated in 2022 and certified by the BC Supreme Court in December 2024. Certification is a critical step in class action proceedings, as it allows the case to proceed on behalf of all affected consumers, rather than requiring individual lawsuits. The court determined that there were sufficient common issues among the plaintiffs to justify collective litigation, streamlining the legal process for all parties involved.
At the heart of the lawsuit is the allegation that Airbnb operates without proper licensing under Canadian legislation governing real estate, travel, and money services. Ware argues that Airbnb’s service fees, which are charged to consumers for using its platform, are unlawful because the company lacks the necessary licenses to operate under these regulatory frameworks. This central issue was deemed suitable for class-wide resolution by the BC Supreme Court, paving the way for the case to move forward.
The certification decision also addressed Airbnb’s jurisdictional challenges. The company had argued that BC courts lacked the authority to hear the case, as Airbnb is a global entity with its headquarters in the United States. However, the BC Supreme Court dismissed this argument, asserting its jurisdiction over Airbnb and its Canadian subsidiary, Airbnb Canada Inc. This ruling was significant, as it established that international tech companies operating in Canada could be held accountable under provincial laws, even if their primary operations are based elsewhere.
Airbnb’s Appeal and the Court’s Reasoning
Airbnb and its Canadian subsidiary appealed both the certification of the class action and the jurisdictional decision to the BC Court of Appeal. Alongside this appeal, the companies sought a stay of proceedings, requesting that the lower court halt the case while the appeal was pending. Their primary argument was that proceeding with the class action would impose significant financial burdens, as they would be required to participate in discovery and other pretrial processes. Airbnb contended that these costs could be wasted if the appeal ultimately succeeded in overturning the certification or jurisdictional rulings.
Moreover, Airbnb raised concerns about the potential implications of continuing the proceedings. The company argued that participating in the case could create the perception that it had “attorned to the jurisdiction” of BC courts—that is, accepted their authority. Airbnb warned that this could lead to “irreparable harm” by encouraging other plaintiffs to file additional lawsuits in BC, assuming the company was subject to the province’s legal authority. The company emphasized that this could result in a flood of litigation, further complicating its legal and operational landscape in Canada.
Despite these arguments, the BC Court of Appeal rejected Airbnb’s request for a stay. The court found that the potential harm to Airbnb was speculative and did not outweigh the interests of the plaintiffs in advancing the case. The court also noted that the plaintiffs had already waited a considerable amount of time for the case to proceed and that delaying it further would undermine the efficiency of the legal process. By denying the stay, the court ensured that the class action could continue uninterrupted, even as Airbnb’s appeal remained pending.
Next Steps and Key Issues
With the stay denied, the class action lawsuit will proceed in the BC courts, with discovery and other pretrial steps moving forward. The outcome of Airbnb’s appeal on the certification and jurisdictional issues remains unresolved, leaving the case’s ultimate resolution uncertain. The appeal will focus on whether the class action was properly certified and whether BC courts have the authority to hear the case. If Airbnb succeeds on either of these grounds, it could significantly impact the trajectory of the lawsuit.
At the heart of the case are several key legal issues. First, the lawsuit challenges Airbnb’s regulatory compliance in Canada, alleging that the company lacks the necessary licenses to operate as a real estate, travel, or money services provider. Ware and the other plaintiffs argue that, without these licenses, Airbnb is not legally permitted to charge consumers service fees. This central allegation could have far-reaching implications for how online rental platforms operate in Canada.
Second, the case raises important questions about the jurisdiction of Canadian courts over international tech companies. Airbnb’s appeal challenges the BC Supreme Court’s decision to assert jurisdiction over the company, arguing that it should not be subject to provincial laws. The resolution of this issue could set a precedent for how other global tech firms are treated in Canadian legal proceedings.
Finally, the lawsuit has the potential to establish a significant legal precedent for digital platforms operating in Canada. If the class action succeeds, it could require Airbnb to refund service fees to Canadian consumers or pay damages for operating without proper licensing. This outcome could also prompt other provinces to scrutinize Airbnb’s operations and potentially lead to similar lawsuits across the country.
As the case progresses, it will be closely watched by legal experts, regulators, and the tech industry, as its outcome could reshape the regulatory landscape for online platforms in Canada. For now, the legal battle continues, with Airbnb facing a challenging and uncertain road ahead in its efforts to defend its operations in the Canadian market.
Conclusion
The class action lawsuit against Airbnb, led by Margot Ware, represents a significant legal challenge for the company in Canada. The certification of the case by the BC Supreme Court and the denial of Airbnb’s request for a stay of proceedings underscore the potential implications for both the company and the broader tech industry. The lawsuit raises critical questions about regulatory compliance, jurisdiction over international tech companies, and the legal framework governing digital platforms in Canada. As the case progresses, it could set important precedents for how online businesses operate within the country, potentially influencing other provinces and shaping the future of digital services in Canada.
Frequently Asked Questions
- What is the basis of the class action lawsuit against Airbnb in Canada?
The lawsuit alleges that Airbnb operates without proper licensing under Canadian legislation governing real estate, travel, and money services, and that its service fees are unlawful as a result.
- When was the class action certified?
The class action was certified by the BC Supreme Court in December 2024.
- Why did Airbnb appeal the certification and jurisdictional decision?
Airbnb appealed both the certification of the class action and the jurisdictional decision, arguing that BC courts lacked authority over the company and that proceeding with the case could impose significant financial burdens and create legal precedents encouraging further lawsuits.
- What was the outcome of Airbnb’s request for a stay of proceedings?
The BC Court of Appeal denied Airbnb’s request for a stay, ruling that the potential harm to the company was speculative and did not outweigh the plaintiffs’ interests in advancing the case.
- What are the key legal issues in the case?
The case primarily addresses two legal issues: (1) whether Airbnb operates lawfully in Canada without proper licensing, and (2) whether Canadian courts have jurisdiction over international tech companies like Airbnb.
- What could be the potential impact of the lawsuit?
If successful, the lawsuit could require Airbnb to refund service fees to Canadian consumers or pay damages. It may also set a precedent for regulating digital platforms in Canada and could encourage similar legal actions in other provinces.
