Once more unto the breach: the Supreme Court of Canada weighs in again on arbitration clauses and class actions
The question of whether and when arbitration clauses will preclude a class proceeding is seemingly continually litigated. In some circumstances—such as in the consumer protection context—legislatures have clarified that certain claims cannot be subject to arbitration. In other cases, however, it is up to courts to craft the appropriate rules. The recent decision of TELUS Communications Inc v Wellman shows that the question of what rules are appropriate can attract significant disagreement. In a 5-4 split decision, the majority of the Supreme Court of Canada held that valid arbitration clauses in contracts should generally be given effect and that persons with such contracts should not be included in class proceedings.
A recent decision of the Ontario Superior Court of Justice affirms the preference of Ontario courts for enforcing arbitration provisions between parties to commercial agreements.
Justice Perell Stays Proposed Class Proceeding against Uber, in Favour of Arbitration in the Netherlands - Heller v Uber Technologies Inc.
A long-standing issue in Canadian class actions law relates to the ability of parties to contract out of class actions and instead require that any disputes be submitted to arbitration. For class counsel and class members, such clauses are anathema, representing an attempt by sophisticated organizations to thwart class actions by requiring individual claims to proceed to arbitration. For businesses, such clauses have significant value; they can result in individual cases being resolved quickly and efficiently, without the complications and attendant costs of a class action.
Ontario’s new legislation governing international commercial arbitration, the International Commercial Arbitration Act, 2017, came into force on March 22, 2017, replacing the International Commercial Arbitration Act previously in place.