Business: Policy Area
The Conflict between Consumer Class Actions and Contractual Arbitration Clauses (ABSTRACT)
published: 2006 | Research publication | Refereed Journals - Policy
McGill, S. (2006). "The Conflict between Consumer Class Actions and Contractual Arbitration Clauses". Canadian Business Law Journal, 43 (3), 359 - 379.
ABSTRACT: Consumers are in a vulnerable position so far as mandatory arbitration clauses are concerned. Usually, the arbitration clause forms part of a standard form contract that has not been the subject of negotiation between parties. Enforcing a consumer arbitration clause may have the practical result of denying a consumer any meaningful relief and insulating business from consumer actions. Not surprisingly, pre-dispute arbitration clauses are being used by the business community as a tactic to blunt the impact of consumer class actions. A national approach that reconciles competing legislative policies is needed so that jurisdictional variations and judicial biases will not create uneven access to class proceedings. A review of Canadian cases dealing with the enforcement of consumer arbitration clauses in the face of class proceedings shows a variety of inconsistent outcomes arising from different reasoning. Most cases have sidestepped the public policy debate by applying principles of contractual interpretation to deny the applicability of specific clauses or by invoking doctrines of unconscionably and consumer protection to void the clauses.
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revised Sep 22/06