Commercial Litigation and Dispute Resolution Blog

The legal landscape for consumer businesses operating in British Columbia is poised for significant changes.

 On March 13, 2025, the B.C. legislature passed the third reading of Bill 4, the Business Practices and Consumer Protection Amendment Act, 2025, a proposed amendment to the Business Practices and Consumer Protection Act, SBC 2004, c 2 (the “BPCPA”).

Once passed into law, Bill 4 will introduce critical changes that directly affect consumer contracts,^[1] with notable implications for arbitration clauses and the retroactive application of the law.

The BC Government has stated that these amendment are intended to promote contract fairness and transparency and to strengthen consumer rights.^[2]

The End of Mandatory Arbitration Clauses in Consumer Contracts

One of the most significant proposed changes introduced by Bill 4 is the ban on mandatory arbitration clauses and class action waivers in consumer contracts.

Historically, the inclusion of mandatory arbitration clauses and class action waivers in consumer contracts has sparked significant legal debate. Courts have often been tasked with balancing the enforceability of these clauses, access to justice and promoting judicial economy.

In Seidel v. Telus Communications Inc. (2011), the Supreme Court of Canada upheld a mandatory arbitration clause in a standard form cell phone contract. In contrast, the Supreme Court of Canada in Uber Technologies Inc. v. Heller (2020) deemed an arbitration clause unconscionable citing, among other things, the disparity in bargaining power and logistical and financial burdens it placed on the plaintiff in that case.

Under Bill 4, any dispute resolution clause in a consumer contract that mandates arbitration—or any other form of alternative dispute resolution—will be rendered void.^[3] The prohibition does not prevent the parties to a consumer contract from agreeing to submit the dispute to arbitration or another dispute resolution process after a dispute arises.

A Closer Look at Retroactive Application

A critical aspect of Bill 4 is its potential retroactive application to consumer dispute resolution provisions.^[4]

Under the proposed changes, the prohibition of arbitration clauses and class action waivers may apply not only to contracts entered into after Bill 4 is passed but also to those that have already been signed.

If this retroactive aspect of Bill 4 becomes law, businesses may face a greater risk of class actions being brought in B.C.

Beyond Consumer Contracts: Low-Value Claims

Bill 4 also introduces provisions that affect non-consumer contracts.

Specifically, Bill 4 proposes that dispute resolution and class action waiver clauses in non-consumer contracts will be deemed inoperative for low value claims.^[5]

The exact threshold for a “low value claim” has yet to be defined, this provision extends the retroactive application of the law to a broader range of agreements beyond just consumer transactions.

Even if these agreements are with commercial entities, the arbitration clause could be rendered unenforceable where the claim falls below the prescribed low value threshold,

Additional Proposed Changes

Bill 4 introduces several other important amendments aimed at enhancing consumer protection. These include:

• restrictions on terms that prevent consumers from posting reviews of goods or services;^[6]

• up front disclosure requirements in consumer contracts, particularly for online orders, such as providing detailed information on pricing, cancellation policies, and renewal terms;^[7]

• notification requirements for automatic subscription renewals and restrict significant contract changes without the customer's consent;^[8]

• prohibition on direct sales of high-cost household products, such as air conditioners and furnaces, and offering credit as part of a direct sale;^[9]

• amendments to allow consumers to pursue claims under the BPCPA through the Civil Resolution Tribunal .^[10]

What Does This Mean for Businesses?

For companies that currently use mandatory arbitration clauses and class action waivers in their consumer contracts, Bill 4 represents a profound shift in how disputes will be resolved moving forward.

Any existing arbitration clauses or class action waivers will likely become void or inoperative, leaving businesses exposed to a new wave of litigation. Businesses must also account for the retroactive nature of the bill. Contracts that were signed before the legislation is enacted will also be affected.

Companies can no longer assume that pre-existing contracts with arbitration clauses will be protected by the law as it currently stands.

The removal of class action waivers and mandatory arbitration clauses could make B.C. a more attractive jurisdiction for class action litigation, especially for consumers who have previously been unable to join a class action. This could lead to higher litigation volumes and greater legal complexity for businesses operating in the province.

Next Steps for Businesses in B.C.

As Bill 4 progresses through the legislative process, companies can take the following steps to prepare:

1. Audit Existing Consumer Contracts: Review all contracts for mandatory arbitration clauses and class action waivers, including those that could be impacted by a retroactive application of the amendments.
2. Consult Legal Advisors: Work with legal counsel to understand the full scope of the changes and how they might impact your business operations, especially in relation to dispute resolution and class actions.
3. Stay Informed: As Bill 4 continues through the legislative process, monitor updates to understand any further revisions or amendments.

Please contact Craig A.B. Ferris, K.C. or Scott Lucyk to discuss the impact of these changes on your business.

^{[1] Bill 4 defines the term “consumer contract” to mean a “contract relating to a consumer transaction”. The terms draws on the existing definition of “consumer transaction” in section 1 of the BPCPA, defined as “(a) a supply of goods or services or real property by a supplier to a consumer for purposes that are primarily personal, family, or household, or, (b) a solicitation, offer, advertisement or promotion by a supplier with respect to a transaction in (a).”}

^{[2] Attorney General of British Columbia, “Stronger consumer protections coming for people in B.C.”, February 25, 2025 (https://news.gov.bc.ca/releases/2025AG0013-000139).}

^{[3] The prohibition, included in section 14.3, does not prevent the parties to a consumer contract from agreeing to submit the dispute to arbitration or another dispute resolution process after a dispute arises.}

^{[4] Under section 203.001, Division 4 of Part 2, which includes the prohibition of arbitration clauses, applies to contracts entered into before, on or after the coming into force of Bill 4.}

^{[5] A “low value claim” is a claim in relation to a matter arising out of the contract for an amount less than the prescribed amount. The amount is not yet determined and will be included in the Regulations at a later date.}

^{[6] Section 14.2 renders any such term void.}

^{[7] A full list of the disclosure requirements is included in sections 18.2 and 18.3.}

^{[8] Under section 25.1, a provision that provides for automatic renewal of the contract for a term of 60 days or less is void unless the consumer can cancel the renewal at any time, without charge or other penalty. If the automatic renewal term is more than 60 days, the provision is void unless a consumer can cancel the renewal at any time before the renewal date without penalty, the supplier provides notice of the renewal date and, if the consumer cancels after the renewal date, the supplier refunds the consumer the portion determined in the prescribed manner.}

^{[9] A full list of high-cost items is provided in section 20.1.}

^{[10] Bill 4 amends section 171 of the BPCPA to allow a person who has suffered damage or loss due to a contravention of the Act or the regulations, to bring an action in the Supreme Court or Provincial Court or may make a request under section 4 of the Civil Resolution Tribunal Act asking the tribunal to resolve a claim.}