Canadian and American courts and legislatures have adopted different approaches to the enforceability of mandatory arbitration clauses and class action waivers. Both jurisdictions face a fundamental question: whether the benefits of including these provisions in contracts of adhesion, such as commercial certainty and freedom of contract, should supersede the right to access the civil justice system on an individual or class-wide basis.
This paper will comparatively analyze the law in Canada and the United States surrounding the enforceability of mandatory arbitration clauses and class action waivers. The Canadian approach is inconsistent, as each Canadian province has differing consumer protection legislation. As a result, the Supreme Court of Canada has struggled to establish national consensus. In contrast, the US Supreme Court has consistently upheld the validity and effectiveness of pre-dispute resolution clauses, even if a plaintiff’s costs of individually arbitrating exceed their potential recovery. Ultimately, the US Supreme Court maintains that freedom of contract and party autonomy supersede consumer protections and the right to commence civil proceedings.
