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ARTICLE · 05 FEBRUARY 2015

Class Actions Not A Guarantee For Franchisees

Osler, Hoskin & Harcourt LLP
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Ontario’s Arthur Wishart Act (Franchise Disclosure), 2000 does not guarantee franchisees the right to commence a class action.

CanadaLitigation, Mediation & Arbitration
Osler, Hoskin & Harcourt LLP
Osler, Hoskin & Harcourt LLP
W. David Rankin
W. David Rankin
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Ontario's Arthur Wishart Act (Franchise Disclosure), 2000 does not guarantee franchisees the right to commence a class action. The Ontario Superior Court recently stayed a proposed franchise class action in favour of requiring arbitration under the franchise agreement. In doing so, the Court rejected the franchisees' argument that the legislature intended to override their arbitration agreement to allow them to start a class action.

The Decision

In 1146845 Ontario Inc. v. Pillar to Post Inc., Justice Perell addressed whether the Ontario legislature intended the Arthur Wishart Act to guarantee franchisees the right to commence a class action even though their franchise agreements required arbitration. Justice Perell found no intention in the Act to pre-empt the arbitration agreement. He accordingly stayed the class action.

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