Filed Under: Journals

Pre-Dispute Mandatory Arbitration Clauses — The Not-so-secret Weapon of “Class” Destruction


After ten years of conflict between the goals of class actions and the policy in favour of arbitration, the Canadian consumer class action lies critically wounded but not dead. This article reports the efforts taken to preserve consumer access to class actions in the face of a massive business assault aimed at eliminating consumer class actions from the litigation landscape. The key weapon in the corporate campaign is the pre-dispute mandatory arbitration clause, which invokes the policy in favour of arbitration to compel a stay of any court action commenced in violation of such a clause. The practical result is to deny consumers with monetarily small claims access to civil justice as such claims cannot be cost-effectively advanced individually.

Over time, courts have shown less and less willingness to consider class action policy rationale when making stay decisions, deferring policy questions to the legislature. Unfortunately, only a few provinces have responded to the call for express legislative protection of consumer class actions. This article traces the arbitration war waged against consumer class actions through the Canadian courts and legislatures beginning with the first strike in the 2002 Ontario case of Kanitz v Rogers Cable Inc and continuing through the 2014 cases interpreting the Supreme Court of Canada’s landmark decision of Seidel v TELUS Communications Inc. Thereafter, the article identifies two drafting strategies that may improve the chances of survival for future consumer class actions. Unfortunately, survival is far from certain.


Shelley McGill


Digital (PDF)

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