Outcome of ITAC Intervention at the Supreme Court of Canada

Last November ITAC intervened at the Supreme Court of Canada on behalf of Facebook in Douez v. Facebook. The appeal considered the validity of forum selection clauses in consumer user agreements. The Facebook user agreement sets out that any legal disputes must be pursued in California courts. Douez is leading a class action arguing Facebook breached BC privacy law, and that the case should be heard in BC.

ITAC’s intervention at the SCC focused on the importance of forum selection clauses in providing legal certainty in the digital economy, especially for small enterprises that can quickly grow to global scale.

Unfortunately, in a narrow 4-3 decision the Court ruled on behalf of Douez. The Court found that while forum selection clauses should generally be upheld in commercial contracts, consumer contracts require evaluation on a case-by-case basis. In this case, because of the perceived power imbalance between Facebook and Douez, the clause will not be upheld.

ITAC is still reviewing the decision and potential broader implications for our industry.

In the ruling it is clear that ITAC’s position was  important to the Court – the dissenting opinion explicitly mentions the ITAC’s submissions and ITAC was the only intervener mentioned by name.

ITAC would like to extend a huge thank you to Ian Matthews, Matt Gottlieb and Paul Michell of Lax O’Sullivan Lisus Gottlieb LLP for their outstanding representation of ITAC in this matter.

If you have any questions, please contact David Messer at dmesser@itac.ca.