Arbitration Agreements and Class Proceedings

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The case known colloquially as the “Payday Loan Class Action,” and more particularly described as MacKinnon v. National Money Mart Company and others, has to date generated a number of very interesting legal issues. One of these concerns the interplay between agreements to arbitrate and class proceedings.

Kurt MacKinnon, the sole named plaintiff in MacKinnon v. Money Mart, was party to over 20 arbitration agreements with National Money Mart Company (“Money Mart”). The question whether Mr. MacKinnon’s action, so far as it concerned Money Mart, should be stayed came before the B.C. courts as a matter of first impression. Money Mart’s application for a stay was refused at first instance by Madam Justice Brown (see MacKinnon v. National Money Mart Company (2004), 26 B.C.L.R. (4th) 172 (S.C.), 2004 BCSC 136). Money Mart’s appeal was allowed (see MacKinnon v. National Money Mart Company, 2004 BCCA 473), and the matter was remitted back to Brown J. for reconsideration on the application for certification. This application was argued in September and October, 2004, and, as of early February, 2005, judgment is reserved.

Can a defendant “immunize” itself from a class proceeding using an arbitration agreement? At present, there is no clear answer in B.C., as the parties await Madam Justice Brown’s decision on certification.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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