Uniformity and Diversity in the Enforcement of Arbitration Clauses in Canada

Geneviève Saumier

doi:10.18800/themis.202001.005

Abstract

Arbitration is well established in Canada. All jurisdictions have implemented the 1958 New York Convention, the UNCITRAL Model Law on Arbitration and equivalent legislation for domestic arbitration. This generally supportive legal landscape for arbitration is often at odds with access to justice for consumers. As a result, several jurisdictions in Canada have adopted legislation to guarantee consumers’ access to local courts, including through class actions, notwithstanding the inclusion of arbitration clauses in their contracts. The constitutional division of powers in Canada entitles each province to adopt its own policy, leading to diversity across the country with regard to the enforceability of arbitration clauses in consumer contracts. In this paper, the author examines the tension between general support for arbitration and differentiated treatment of consumer arbitration in Canada. To that end, the author examines relevant legislation in several provinces (including Quebec and Ontario) as well as recent jurisprudence from the Supreme Court of Canada (Dell Computer (2007), Telus (2011) and Wellman (2019)). The 2020 decision from the Supreme Court of Canada in Uber may signal a new openness toward extending protection to other vulnerable contracting parties such as employees.

Highlights

In 1986, Canada ratified the New York Convention on the Enforcement of Foreign Arbitral Awards. This was accompanied by widespread legislative modernization of arbitration along the lines of the UNCITRAL Model Law on International Commercial Arbitration, adopted by United Nations Commission on International Trade Law on 21st June 1985, with effect on both international and domestic arbitration throughout the country
Whether under international or domestic arbitration legislation, none of the provincial statutes in Canada provides for exceptions with respect to claims brought as class actions
If the action had been brought in Quebec instead of in Ontario, the arbitration clause would likely have been declared unenforceable by direct reference to legislation without any need to show that the clause was unconscionable

Summary

INTRODUCTION

In 1986, Canada ratified the New York Convention on the Enforcement of Foreign Arbitral Awards This was accompanied by widespread legislative modernization of arbitration along the lines of the UNCITRAL Model Law on International Commercial Arbitration, adopted by United Nations Commission on International Trade Law on 21st June 1985, with effect on both international and domestic arbitration throughout the country. This legislative policy in favour of arbitration forced reluctant Canadian courts to reverse their previous rejection of parties’ ability to exclude the jurisdiction of state courts.. Heller, which may signal a shift in that court’s traditionally pro-arbitration view

THE LEGISLATIVE CONTEXT FOR ARBITRATION IN CANADA

THE INTERACTION BETWEEN ARBITRATION AND CLASS ACTIONS

The Particular Context of Consumer Claims

Section 8:

Beyond the Consumer Context

CONCLUSION