The (Un)Enforceability of Class Action Waivers in Canada

Despite the prevalence of class action waivers in modern contracts, their enforceability is an under-investigated and controversial issue in Canadian law. The controversy arises from the battle of two important public interests: the interest in giving effect to contracts as agreed between the parties and the interest in organizing justice through class proceedings. This essay studies the position taken by Canadian courts in the limited jurisprudence around the issue, and it also explores the scope of the statutory and common law bases for the unenforceability of class action waivers. Based on the analysis, the essay argues that the procedural right to commence or participate in a class action is not sufficient to override the effect of a class action waiver. A waiver may be struck down only in appropriate circumstances where there is a statute, common law principle, or strong public policy that prevents its enforcement. Hence, the analysis highlights the primacy of the parties’ freedom of contract in Canadian law, as well as the importance of careful drafting and reading of contractual terms in modern contracts.