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

• Author: Shelley McGill
• Pages: 119-143

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119

PRE-DISPUTE M ANDATORY

AR BITR ATION CLAUSES —

THE NOT-SO-SECRET W E A PON

OF “CL ASS” 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 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

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