Law Times

Law Times • apriL 12, 2010 FOCUS PAGE 13 Ruling on arbitration clauses 'a brilliant win' BY ROBERT TODD Law Times viewing as a major victory for the Davids to use the Class Proceedings Act to take on the Goliaths. The province's top court re- T cently backed an earlier ruling in Griffin v. Dell Canada Inc. by Superior Court Justice Joan Lax, who certified the class ac- tion involving allegations of faulty notebook computers. Writing for the appeal court panel, Justice Robert Sharpe agreed with Lax's ruling that an arbitration clause didn't preclude a class action on the matter. Davis LLP partner and class actions lawyer Peter Jervis calls the ruling "a brilliant win" for class counsel Joel Rochon of Rochon Genova LLP and his team. But more than that, he says the decision is important for class actions jurisprudence. The court itself seemed to signal the significance of the case by assigning a five-judge panel to hear the matter, with Chief Justice Warren Winkler among it. Jervis says Griffin clarifies that in Ontario, with changes to the Consumer Protection Act, it appears that courts have "bent over" to allow consum- ers to use class proceedings to litigate product disputes despite objections from big companies. "Earlier on in class proceed- ings jurisprudence, where there was the availability of an alter- native mechanism for resolution — an arbitration mechanism or some other administrative mechanism — the courts were often drawn in by that," he says. Judges would often look at those alternative procedures and side with the notion of keeping the matter out of the courts, Jervis suggests. But Sharpe took a "practi- cal look at the realities" of ar- bitration clauses in Griffin, says Jervis. The judge noted that the company had the right to arbi- tration and should be able to rely on it. But at the same time, Sharpe said failed computer technology would likely be an extremely complex area to ar- gue and may require expert evi- dence. Dell was also unable to demonstrate to the court that it had ever used its arbitration mechanism, Jervis notes. "It may be argued that the CORRECTION A March 22 article, "BLG settles with First Nation," incorrectly reported that David Outerbridge of To- rys LLP represented Teme- Augama Anishnabai. In fact, Torys represented the Ontario First Nation Gen- eral Partnership, the gar- nishee in the proceedings. Untitled-1 1 he Ontario Court of Appeal has issued a decision that some are complexity and cost of the ar- bitration process selected by Dell will effectively neutralize the risk of multiple proceed- ings by eliminating arbitration as a viable means of pursuing a claim. This is no doubt true," wrote Sharpe. "However, al- lowing one party to erect eco- nomic and procedural barri- ers which trump substantive rights and deny the other par- ty access to justice is not what the jurisprudence has in mind when it speaks of promoting judicial economy and effi- ciency and avoiding multiple proceedings." Jervis calls the finding a sig- nificant victory for consumers in class proceedings. "The highest court in our province has not rested on technical, narrow arguments," he says. "They've taken a broad look at this and said, 'What's really going on? What's re- ally going to further access to justice?' In the real world, no decision backs the growing trend in Ontario in which the courts are taking a broad inter- pretation of the Class Proceed- ings Act. "I think it's a real triumph," says Jervis. Meanwhile, Lerners LLP 'In the real world, no consumer can ever take on one of these large computer manufacturers,' says Peter Jervis. consumer can ever take on one of these large computer manu- facturers and therefore they don't really have any rights if there's a defective product." Moreover, Jervis says the partner Ian Leach notes On- tario's top court appears to have taken a different approach to the issue than courts in other provinces. In 2009's MacKin- non v. National Money Mart Co., the British Columbia Court of Appeal found that the Supreme Court of Canada's 2007 decisions in Rogers Wire- less Inc. v. Muroff and Dell Computer Corp. v. Union des consommateurs had established that "a valid agreement to arbi- trate removes the dispute from the court's purview." At the same time as issuing that deci- sion, B.C.'s top court stayed a proposed class action in Seidel v. Telus Communications Inc. due to an arbitration clause. However, Sharpe rejected the argument that the top court's 2007 ruling in Dell ap- plied to the case at hand. He wrote that "by enacting the [legislation] and by outlawing mandatory arbitration clauses in consumer agreements, the Ontario legislature has exclud- ed the application of the rea- soning in Dell to agreements covered by the [act]." The Supreme Court is set to hear an appeal of Telus in May, and is expected to determine whether its previous ruling in Dell applies to all provinces or only Quebec, where the case originated. "The other provinces — Sas- katchewan, British Columbia — they've all now fallen in line with the position that I think the Supreme Court of Canada meant to speak to the nation at large," says Leach. Dell is seeking leave to ap- peal the Griffin case to the Su- preme Court. LT The McKellar Structured Settlement™ www.lawtimesnews.com 4/6/10 9:07:40 AM

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