The (un)enforceability of class action waivers in Canada

• Author: Mary Ppasiou
• Position: PhD candidate at Western University
• Pages: 5-38

5

The (Un)Enforceability of Class Action Waivers in

Canada

Mary Ppasiou

: Despite the prevalence of class action waivers in modern con-

tracts, their enforceability is an under-investigated and controversial issue

in Canadian law. The controversy arises from the battle of two import-

ant public interests: the interest in giving effect to contracts as agreed

between the parties and the interest in organizing justice through class

proceedings. This essay studies the position taken by Canadian courts in

the limited jurisprudence around the issue, and it also explores the scope

of the statutory and common law bases for the unenforceability of class

action waivers. Based on the analysis, the essay argues that the proced-

ural right to commence or participate in a class action is not sucient to

override the effect of a class action waiver. A waiver may be struck down

only in appropriate circumstances where there is a statute, common law

principle, or strong public policy that prevents its enforcement. Hence,

the analysis highlights the primacy of the parties’ freedom of contract in

Canadian law, as well as the importance of careful drafting and reading of

contractual terms in modern contracts.

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THE (UN)ENFORCEABILITY OF CLASS

ACTION WAIVERS IN CANADA

Mary Ppasiou*

A. INTRODUCTION

Class action waivers are highly prevalent in modern contracts, yet their

enforceability remains a controversial and under-investigated issue in

Canadian contract law. On the first occasion this issue was raised before

a Canadian court, in the 2008 case 2038724 Ontario Ltd v Quizno’s Canada

Restaurant Corp,1 it was held that class action waivers are “neither cat-

egorically enforceable nor categorically unenforceable and their enforce-

ment will be determined in the context of a certification motion.”2 Ever

since, there has been increasing litigation over the issue, but only in lim-

ited cases have class action waivers been struck down in favour of class

proceedings. The purpose of this essay is to study the relevant jurispru-

dence and identify the current judicial position on the enforceability of

class action waivers fifteen years after Quizno’s.

The essay will show that, as a general rule, the procedural right to

bring a class action is not sucient to override the effect of a class action

waiver. As will be discussed below, however, Canadian law has established

a number of legal bases that may be applied in appropriate circumstances

to justify the non-enforcement of class action waivers. In relation to con-

sumer contracts, some Canadian provinces have enacted statutes that

explicitly prohibit the use of class action waivers. In addition, class action

*Mary Ppasiou is a PhD candidate at Western University. Her research interests

include contract law, construction law, and private law theory. Mary completed her

LLB at the University of Cyprus in 2020 and obtained an LLM from Western

University in 2022. This essay won the 2023 Harvey T. Strosberg Essay Prize.

1 2038724 Ontario Ltd v Quizno’s Canada Restaurant Corp (2008), 89 OR (3d) 252 (SC),

rev’d on other grounds (2009), 96 OR (3d) 252 (Div Ct), aff’d 2010 ONCA 466 [Quizno’s].

2 Ibid at para 12.