Class Proceedings Vs. Arbitration in Canada: Resolving Class Conflict and Developing Guidelines

• Author: Jeffrey S. Leon and Cheryl D. Dusten
• Pages: 603-616

603

CLASS PROCEEDINGS VS.

ARBITRATION IN CANADA:

RESOLVING CLASS CONFLICT AND

DEVELOPING GUIDELINES1

Jeffrey S. Leon and Cheryl D. Dusten2

A. INTRODUCTION

In recent years, courts in Ontario, British Columbia, and Quebec have

been called upon to consider whether a proposed class proceeding should

be stayed in favour of the binding arbitration agreements entered into by

the proposed class members. Such cases have put arbitration and class

proceedings legislation into the spotlight as courts have struggled to

resolve the apparent conflict between them.

Arbitration legislation, such as the Ontario Arbitration Act, 19913 and

the British Columbia Commercial Arbitration Act,4 supports the policy

objective of expediting dispute resolution and saving costs that would

be incurred in a court action.5 In order to support these objectives, both

of the Acts include provisions that require courts to stay proceedings

commenced by a party to an arbitration agreement in respect of a matter

covered by that agreement.6 Both Acts enumerate exceptions that, if pres-

ent, allow the court to refuse to stay the proceeding. In the Arbitration

Act, these exceptions include that the arbitration agreement is “invalid.”7

In the Commercial Arbitration Act, the exceptions are that the arbitration

1 An earlier version of this paper was presented at the Commercial Bar

Association’s North American Meeting 2006, which was held in Rome in June,

2006.

2 Jeffrey S. Leon, LSM, Partner, Fasken Martineau DuMoulin LLP, Toronto;

Cheryl D. Dusten, Associate, Fasken Martineau DuMoulin LLP, Toronto.

3 Arbitration Act, 1991, S.O. 1991, c. 17 [Arbitration Act].

4 Commercial Arbitration Act, R.S.B.C. 1996, c. 55 [Commercial Arbitration Act].

5 MacKinnon v. National Money Mart Co., [2004] B.C.J. No. 175 at para. 19

(S.C.), rev’d [2004] B.C.J. No. 1961 (C.A.) [MacKinnon].

6 Arbitration Act, above note 3, s. 7(1); Commercial Arbitration Act, above note 4,

s. 15(1).

7 Arbitration Act, ibid., s. 7(2)(2).