Kent E. Thomson and Nicholas Van Exan (Davies Ward Phillips & Vineberg LLP) have posted a working paper entitled: “Unpacking Pandora’s Box: Consumer Arbitration Law after Seidel”. The abstract reads:
Until a few years ago, scholars and practitioners shared in the view that Canada was an “arbitration-friendly” jurisdiction. Canadian courts, and in particular the Supreme Court of Canada, earned this reputation through a series of important decisions in which arbitration clauses were enforced in the consumer protection law context. These decisions reflected an emerging consensus among jurists that arbitration was a system of equal importance and legitimacy to the judicial system policed by the courts. Or so it appeared.
In 2011, the Supreme Court of Canada released its decision in Seidel v. Telus Communications Inc., in which a narrow majority of the Court held that an arbitration clause contained in a standard consumer contract was void in respect of certain provisions of the British Columbia Business Practices and Consumer Protection Act. Superficially, Seidel signaled a small but innocuous change to the Supreme Court’s approach to adjudicating statutory rights. The implications of the Court’s decision, however, are potentially far-reaching. In Seidel, the Supreme Court re-ignited a longstanding debate over the legitimacy of arbitration as a means of resolving consumer-related disputes.
This paper explores the law of consumer arbitration both before and after the Supreme Court of Canada’s landmark decision in Seidel. The authors find that Seidel re-opened what appeared in Canada to be a firmly closed Pandora’s Box. Whereas before Seidel courts would not interfere with arbitration agreements absent clear and express legislative language to the contrary, today no such certainty prevails. Contrary to the direction recently taken by U.S. courts, Seidel permits Canadian courts to rule against the arbitration of consumer claims on the basis of implied legislative intent and even at the expense of the arbitrator’s jurisdiction. The resulting uncertainty created by this approach means that counsel should, now more than ever, draft arbitration agreements with a view to their eventual litigation.
Download a pdf copy of the paper via SSRN here.
Related articles
- Schwartz on a Substantive Right to Class Proceedings (lawprofessors.typepad.com)
- The Importance of the American Express Arbitration Case (pubcit.typepad.com)
- This Supreme Court Case Could Give Corporations Even More Power to Screw Consumers (motherjones.com)
- Let’s Sue Wall Street: SEC’s Aguilar (forbes.com)
- What Binding Credit Card Arbitration Means for Your Wallet (cardhub.com)
- Instagram’s Binding Arbitration Clause Could Be the Worst Ever: It Seeks to Kill Off All Representative Actions (pubcit.typepad.com)
- “Submit to any one of the arbitration commission in Japan for arbitration” clause held void by Chinese Supreme Court (chinamalawyer.wordpress.com)
- Somethings Never Change but Crooked Logic Leads to New and Interesting Legal Structures: Judges, What Have You Done to the Doctrine Privity of Contract? (rationesdecidendi.com)
Antonin I. Pribetic
