Apr 8, 2019
The Supreme Court of Canada has ruled that business subscribers to Telus mobile phone services are not protected by Ontario’s consumer protection law and may not participate in consumer class action law suits against the communications giant.
In a conversation with David Paddon of The Canadian Press, Craig Lockwood, a partner in Osler’s Litigation group (and is not involved in the case), said the Supreme Court had been asked to determine whether the decision to allow businesses customers to participate in consumer class actions should be left to judges’ discretion.
For more than a decade, the Ontario Court of Appeal’s interpretation of the Arbitration Act permitted “otherwise arbitrable matters to be joined with class actions in the public interests of avoiding duplicative proceedings, increased costs, and the risk of inconsistent results.” They believed it was unreasonable to separate consumers and businesses into two groups despite the existence of an arbitration clause in business customers’ contracts – an interpretation that put contracts with mandatory arbitration provisions at risk of having their effectiveness reduced.
The Supreme Court ruled that “Section 7(5) of the Arbitration Act, 1991 does not permit the court to ignore a valid and binding arbitration agreement.” Instead, business customers must abide by the terms of their contracts and settle disputes through commercial arbitration, a view three of the seven ruling judges disagreed with.
Craig said the Telus case is one of many addressing the “inherent tension” between the class action regime and arbitration provisions included in contracts.
For more information, read author David Paddon’s article “Supreme Court: consumer protection law doesn't permit businesses to sue Telus” in the Financial Post on April 4, 2019.