Class Action Waiver Unenforceable Due To Unconscionability And Public Policy

Contractual terms that prevent a party from participating in a class action may be unenforceable for unconscionability and public policy when they preclude access to justice, the British Columbia Court of Appeal recently held in Pearce v. 4 Pillars Consulting Group Inc., 2021 BCCA 198 [Pearce].

Background

The defendants in Pearce were advisors to individuals who were nearing a state of insolvency and were seeking to restructure their debt. Several former customers alleged the defendants were operating illegally and sought a return of fees paid and damages.

The former customers sought to have their claims certified as a class action proceeding. Some of these customers had entered into a standard form contract with the defendants that contained a class action waiver clause. The clause purported to prevent the customers from bringing class action proceedings. The defendants opposed class certification, and sought a stay of proceedings against some customers based