The Canadian Construction Association (CCA) is “displeased” that the Supreme Court of Canada has dismissed an appeal by a Canadian contractor following a B.C. Supreme Court decision that upheld Burnaby, B.C.’s “reprisal clause” in tender documents.
It excludes bids from contractors that have been in legal proceedings against the city within the previous two years.
“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.
There is concern over potential serious implications for contractors in the future over the use of 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.”
By upholding the reprisal clause, this means that there is no constitutional barrier to municipalities using reprisal clauses.