The Arbitration of Canadian Consumer Contracts
(photo: Cohdra at MorgueFile)
Friday the thirteenth was (temporary) bad luck for Canadian consumers. I say temporary because Ontario and Quebec have forbidden mandatory arbitration clauses and class action waivers. The Canadian Supreme Court in the two cases discussed below held that in the cases before it those statutes could not be applied retroactively.
Though no Canadian Law expert (I was hipped to the Dell opinion by my Canadian buddy Michael Webster of the Due Diligence and Misleading Advertising Blog) it appears that a Dell mandatory arbitration and class action waiver clause is not against Canadian public policy (referred to by the Court as not against "public order.") See the Canadian "The Court" Blog's article, "Is the Class Action a Public Order Institution," excerpted below.
Ironically, when the Dell and Rogers cases are placed in a larger social context, the public’s interest in securing the class action as a vital aspect of the public justice system could hardly have been rendered clearer. The Rogers case received much less of the court’s attention, having been carried through on Dell’s slipstream; however it is the features of Rogers’ mandatory arbitration/class action waivers on its consumer contracts that highlight the hollowness of off-the-bench judicial laments about access to justice for ordinary Canadians.
Both cases turned on the sublimely procedural question of whether an arbitrator or a Quebec superior court judge should have first kick at the can in deciding whether a mandatory arbitration clause on a consumer contract was enforceable or not. Such clauses preclude consumers from pursuing corporations in any kind of court action, including class action.
In both Ontario and Quebec the question has been rendered moot by amendments to consumer protection legislation which prohibit such clauses, underlining the public order aspect of the class action.
Read the rest of the article here (emphasis added).