Dell Computer Corp. v. Union des Consommateurs et al

Dell Computer Corp. v. Union des Consommateurs et al

On June 9, 2006, CIPPIC, together with the Public Interest Advocacy Centre (PIAC), filed an application for leave to intervene in the Supreme Court of Canada appeal of a Quebec Court of Appeal decision by Dell Computer Corporation. Dell was appealing a determination that the mandatory arbitration clause in its standard terms and conditions of sale was unenforceable against consumers because it was not properly brought to their attention. Dell merely included a hyperlink to the terms and conditions of sale on its website, and did not take any steps to ensure that customers making online purchases actually agreed to the contract, let alone the mandatory arbitration clause. The case arose when Union des consommateurs applied for certification of a class action against Dell, and Dell responded by arguing that the matter must go to arbitration due to the mandatory arbitration clause in its standard terms and conditions of sale.

CIPPIC and PIAC were granted leave to intervene and filed their factum on September 15, 2006. We made two main arguments:

1. That the class action is a procedure of public order under Quebec law, which procedural right consumers cannot validly waive by way of and arbitration clause in a standard form contract for sale or service; and
2. That the simple presence of a hyperlink on a web page is not sufficient to comply with consumer notification requirements under Quebec law.

The London Court of International Arbitration, the ADR Institute of Canada and the ADR Chambers Inc. were also granted status to intervene, and filed their factums on Sept. 15, 2006. Each intervener had fifteen minutes to make oral submissions at the Supreme Court hearing on December 13, 2006.

The Court rendered its decision on July 13, 2007, granting Dell's appeal. In determining that Dell's mandatory arbitration clause was enforceable despite the fact that it was not specifically agreed to by consumers, the court rejected arguments made by CIPPIC and others that retailers should not be allowed to deny consumers the right to sue through terms of sale imposed on consumers. The court further held that mere hyperlinking to such terms via the retailer's website, without bringing them to the attention of consumers, is sufficient to make them binding on consumers. Consumer groups swiftly denounced the decision, calling on legislatures to fill in the breach. In fact, the Quebec government passed legislation during the court's deliberations making mandatory arbitration clauses unenforceable in that province.  In doing so, it followed the lead of Ontario and other governments. CIPPIC News Release PIAC News Release

Factums and other documents related to this case can be found at the document archives.