NEWS FROM THE FIELD
CCA displeased by
Supreme Court of Canada
decision to dismiss appeal
on use of reprisal clauses
in British Columbia
The Canadian Construction Association
(CCA) is displeased to learn that the Supreme
Court of Canada dismissed an appeal brought
forward by contractor J. Cote & Son Excavating.
The December decision effectively upheld the
use of “reprisal clauses” in tender documents. The
clause used by the City of Burnaby against J. Cote
& Son Excavating stated that the city would not
accept tenders from any party that is, or has been
within the last two years, involved in legal proceedings
initiated against Burnaby arising out of
a contract for works or services.
“The clause effectively forces consultants or
contractors who may have a dispute with the city
to choose between pursuing their legal rights
and bidding on city contracts for the next two
years,” said Mary Van Buren, CCA president.
This ruling has serious implications for contractors;
it condones placing contractors on a
two-year blacklist that bans them from bidding
on city projects.
“The inclusion of these types of clauses in
contracts essentially allows contractors to be
financially punished for exercising their legal
rights,” explains Van Buren. “The result is
contractors are deterred from accessing the
courts to enforce their legal rights because they
fear being banned from future participation
in projects.”
The decision by the Supreme Court of
Canada effectively means that there is no constitutional
barrier to municipalities using reprisal
clauses. CCA will continue to closely
monitor any developments as the association
believes this case ruling could have major implications
for the construction industry in all
of Canada.
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