Canada's highest court ruled Friday that British Columbia consumers can pursue class action lawsuits even after signing contracts that appear to waive that right.
In a 5-4 ruling, the Supreme Court of Canada ruled that B.C.'s consumer protection law allows customers to get past clauses in service contracts that say disputes must be resolved by private arbitration.
The case began with Michelle Seidel, who tried to launch a class-action lawsuit in 2005 against telecommunications company Telus over how it charges for airtime.
Seidel had signed a standard service contract that seemed to prevent her from pursuing a class action, but a lower court agreed her class action could be certified.
In 2009, the B.C. Court of Appeal overturned that decision after a challenge by Telus Communications Inc.
Art Grant, the Vancouver-based lawyer who represented Seidel in the appeal to the Supreme Court of Canada, said she now plans to get her class action certified.
In her filing to the court, Seidel alleged Telus was engaging in a "deceptive business practice" — in violation of the province's Business Practices and Consumer Protection Act — by overcharging consumers for airtime, Grant said.
Seidel was being charged not only for speaking time, but also for the time spent waiting for a call to connect after she pressed send on her cellphone and for airtime used when a call was coming in, Grant said.
"Airtime had a very different meaning than what the average consumer would understand it to mean," he said.
Seidel wants to recover the money she says Telus owes her, Grant said.
"The Supreme Court of Canada has agreed in part with our case and said to the extent we have relied on the Business Practices and Consumer Protection Act, and specifically section 172 as the basis for Ms. Seidel's claim, we can proceed with the class action."
Friday's Supreme Court decision has immediate implications only for Telus customers who were charged for airtime between 2000 and 2005, but it does strengthen the application of one piece of B.C. consumer law.
"For people who have claims that are based on deceptive business practices that are contrary to the Business Practices and Consumer Protection Act, they can pursue those claims in British Columbia in the form of class actions," Grant said.
Other cases would still have to be resolved individually by consumers if they've signed such arbitration contracts. Arbitration is private, confidential and must be conducted on the basis of individual claims, Grant said.
The minority court decision noted that the B.C. government has the power to pass legislation, as Ontario, Quebec and Alberta have done, that prohibits arbitration clauses that limit class-action lawsuits.