Montreal consumer Olivier Dumoulin started a class-action lawsuit against Dell, arguing that the company wouldn't honour Axim sales made on its Canadian website, before the erroneous prices of $89 and $118 were rectified. The real prices were $379 and $549 respectively.
At issue for the Supreme Court is a caveat used by Dell and a growing number of retailers on the sale of everything from computers to cellphones.
It's a clause that obliges dissatisfied customers to challenge companies through arbitration - and not class-action lawsuits.
"This clause for us is abusive. Its goal is to block class-action lawsuits," said Charles Tanguay, a spokesperson for Quebec's Union des consommateurs, which is spearheading the case with Dumoulin. "What we're defending here is a principle. When a price is advertised, it must be sold at that price."
In 2004, the Quebec Superior Court granted the union and Dumoulin class-action certification.
Each member of the class is asking for Dell to supply the Axim at the transaction price, plus compensatory damages of $100 and punitive damages of $1,000, court papers show.
A lawyer for Dell couldn't be reached for comment yesterday.
Dell's appeal of the Superior Court's decision has broad implications for most Canadian provinces. While such arbitration clauses are no longer permitted in Quebec - their use is also forbidden in Ontario - Friday's decision would set the standard for retailers in other provinces, legal experts say.
"There's a big trend of retailers favouring arbitration clauses," said Frederic Bachand, a McGill University law professor.
Bachand was part of a team of lawyers representing a neutral intervenor in the Dell case.
While the trend is more limited in Canada, Bachand estimates that these clauses are used in more than half of U.S. consumer contracts - or purchases of goods and services.
Arbitration is advantageous for big business because it's done privately - sparing companies potentially negative publicity - and usually less costly, he said.
Some arbitration clauses also force customers to challenge a company as individuals, which could dissuade customers from taking action because of fees.
"What the big-business side is trying to do is to force the consumer to go to individual arbitration," he said. "We've seen some cases that are obviously abusive, where companies are trying to shift the cost (of arbitration) to the consumer."
Dell wasn't trying to gouge customers on fees, Bachand said.
Along with the Dell case, the Supreme Court is also expected to decide on a similar lawsuit involving Rogers Wireless.
A Quebec customer trying to launch a class-action lawsuit against Rogers for high mobile fees was also told he had to go to arbitration instead of court.
