Court Rejects Dell’s Bid for Mandatory Arbitrations – January 25, 2010
A five judge panel of the Court of Appeal for Ontario has unanimously dismissed two appeals brought by Dell Canada Inc. seeking to enforce a mandatory consumer arbitration clause and to prevent a class action lawsuit from proceeding. The decision was released on January 20, 2010. The Toronto law firm of ROCHON | GENOVA LLP represents approximately 119,000 class members.
Customers of Dell Canada who purchased Dell’s 1100, 1150, 5100, 5150 and 5160 Inspiron laptop computers between March 2003 and May 2005 initiated a class proceeding against Dell in 2007 alleging that the laptops were defective. Dell sought to stay the class action in favour of multiple mandatory arbitrations in motions before the Ontario Superior Court. In two decisions released in 2009, Justice Joan L. Lax of the Ontario Superior Court dismissed Dell’s motions and allowed the class action to proceed. Dell appealed the stay decisions.
In dismissing the appeals, Justice Robert J. Sharpe, on behalf of the Court of Appeal, concluded that:
“Clauses that require arbitration and preclude aggregation of claims have the effect of removing consumer claims from the reach of class actions. The seller’s stated preference for arbitration is often nothing more than a guise to avoid liability for widespread low-value wrongs that cannot be litigated individually but when aggregated form the subject of a viable class proceeding.”
“This decision represents an important step forward for Dell customers and other consumers who would have been otherwise subject to a unilaterally imposed and unfair arbitration process” said Joel P. Rochon, one of the lawyers representing the class.