Consumer Protection, Cell Phones and Arbitration

British Columbia has laws which are intended to protect consumers from unfair or misleading business practices.  The current version of those laws is called the Business Practices and Consumer Protection Act (“BPCPA”).

In a decision pronounced by the Supreme Court of Canada, Michelle Seidel brought a lawsuit against Telus alleging that “Telus falsely represented to her and other consumers how it calculates air time for billing purposes” on its cellular phones.  (See Seidel v. Telus Communications Inc., 2011 SCC 15)  Ms. Seidel sought to have her lawsuit certified as a class action.

In response to Ms. Seidel’s lawsuit, Telus sought to rely on a clause in the contract which its customers sign which states, amongst other things, that:

A claim, dispute or controversy ... arising out of or related to this agreement … or advertisements or promotions relating to this agreement or service … will be referred to … private and confidential mediation before a single mediator chosen by the parties and at their joint cost.  Should the parties after mediation in good faith fail to reach a settlement, the issue … shall then be determined by private, confidential and binding arbitration.  ….    you waive any right you may have to commence or participate in any class action against Telus Mobility ….

In reaching its decision in this case, the Supreme Court referred to section 3 of the BPCPA which provides that a “waiver … of the … protections under this Act "is void ….”  Relying upon section 3, the court decided that Telus could not force Ms. Seidel to use private mediation and arbitration.  In the Court’s view, the publicity inherent in proceedings which occur in open court was part of the package of benefits which the consumer protection legislation was designed to provide.  As a result, Ms. Seidel was allowed to pursue certification of her class action.

Article provided by Centennial Law Corp.