Pre-dispute Mandatory Arbitration Clauses - the Not-so-secret Weapon of 'class' Destruction

• Author: Shelley McGill
• Pages: 119-143

ccar 10.indb 1181/19/2015 9:09:52 AM

119

PRE-DISPUTE MANDATORY

ARBITRATION CLAUSES —

THE NOT-SO-SECRET WEAPON

OF “CLASS” DESTRUCTION

Shelley McGill

Abstract: After ten years of conf‌lict b etween 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 as-

sault aimed at eliminating consumer class 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 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. Un-

fortunately, only a few provinces have responded to the call

for express legislative protection of consumer class actions.

This article tr aces 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

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