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Today's Supreme Court decision in Dell Computer Corp. v. Union des consommateurs is a major blow to consumers who engage in e-commerce in Canada.
At stake was consumers' right to access the justice system through class actions rather than mandatory arbitration to resolve disputes. Dell imposed arbitration as a "take it or leave it" term in the contractual fine print linked from the bottom of its website, and though nobody ever reads those, the Supreme Court held the term was enforceable.
In an interview on CBC television this morning (quoted online) I said that arbitration can be a useful dispute resolution tool, but only if it is truly consensual. Class actions are generally the best way to modify business behaviour, so it is sad that the right to bring them has been cut off in many cases.
Broadly, I think there will be 2 sorts of fallout from this decision. First, businesses will put these "class action stopper" clauses in contracts of adhesion more frequently. The practice won't be limited to e-commerce, and will become boilerplate in all kinds of consumer contracts. Second, that will likely lead provincial policy-makers to take action. BC, Ontario and Québec have already done so, and it only remains to be seen which will be the last province to wake up to this issue.
Despite the disappointing result of this case, mention must be made of the fantastic work by CIPPIC and my colleague Mistrale Goudreau on the SCC intervention, and in tackling this problem generally. I'm sure this work will pay off when each province puts adequate consumer protection in place.
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