PRE-DISPUTE M ANDATORY
AR BITR ATION CLAUSES —
THE NOT-SO-SECRET W E A PON
OF “CL ASS” DESTRUCTION
Abstract: After ten years of conflict b etween the goals of class
actions and the policy in favour of arbitration, the Canadian
consumer class act ion lies critically wounded but not dead.
This article report s the efforts taken to preserve consumer
access to class actions in the face of a mas sive business as-
sault aimed at elimin ating consumer cla ss actions from the
litigation landscape. The key weapon in the corporate cam-
paign 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 monetar ily
small claims access to civil justice as such claims cannot be
cost-effectively advanced individually.
Over time, courts h ave shown less and less w illingness
to consider class action policy rationale when making stay
decisions, deferring policy questions to the legislature. Un-
fortunately, only a few provinces have responded to the call
for express legislat ive protection of consumer class actions.
This article tr aces the arbitration war waged against consumer
class actions through the Canadian courts and legislatures
beginning w ith the first str ike in the 2002 Ontario case of
Kanitz v Rogers Cable Inc and continuing through the 2014
cases inter preting the Supreme Court of Canada’s landmark
decision of Seidel v TELUS Communications Inc. Thereafter,
the article identifie s two drafting strategies that may improve
ccar 10.indb 119 1/19/2015 9:09:52 AM