*This blog post was written by Ruth Paul, articling student at de VRIES LITIGATION LLP*

With over 80% of Canadian households subscribing to at least one streaming service, internet-based streaming platforms are becoming the preferred way to consume video media. The variety of content and the on-demand nature of streaming platforms entice consumers to subscribe to these services. As with most subscription services, streaming platforms require subscribers to consent the terms and conditions of their user agreements. Subscribers often sign these lengthy agreements idly without any regard to their contents. Unbeknownst to many users, in exchange for a subscription, they may have forgone their right to pursue court actions against the streaming service, its owners and affiliates, and instead are required to adhere to arbitration agreements in jurisdictions outside their own. A recent Florida case demonstrates the potential implications of such agreements for subscribers.

In October 2023, Dr. Kanokporn Tangsuan, her husband (“Jeffrey”), and Jeffrey’s mother dined at a Disneyworld restaurant in Florida (“Disney”). On its website, the restaurant held itself out as an “allergen free” facility that prioritized protecting and accommodating patrons with food allergies. Dr. Tangsuan – who was highly allergic to nuts and dairy – and Jeffrey relied on this information when making their dinner plans. At the restaurant, Dr. Tangsuan informed the waiter of her allergy. After the waiter’s assurance that her meal was allergen free, Dr. Tangsuan ate her dinner with the belief that the meal met her dietary needs. An hour later, Dr. Tangsuan had trouble breathing and collapsed. That evening, she died from an anaphylactic reaction caused by elevated levels of dairy and nuts in her system.

After her death, Dr. Tangsuan’s estate (the “Estate”) brought a wrongful death action against Disney. The Estate claimed that Disney was negligent in preparing Dr. Tangsuan’s meal and in improperly training their employees with respect to food allergies. In their response, Disney did not deny that the meal served to Dr. Tangsuan triggered her anaphylaxis reaction. Nor did they deny their negligence in preparing the meal or training their staff. Instead, Disney filed a Motion to Compel Arbitration on the basis that the Estate was barred from commencing its action in court.

Disney argued that since Jeffrey signed up for a free trial of Disney+ in 2019 and purchased Epcot tickets through his Disney account, both he and his late wife agreed to the terms and conditions of the Disney+ Subscriber Agreement (the “Subscriber Agreement”). One such term was that an arbitrator – not the court – had the exclusive authority to resolve any disputes against Disney or its affiliates (the “Arbitration Clause”).

The Estate argued that Disney’s reliance on the Arbitration Clause had far-reaching and unconscionable implications. If Disney’s argument were accepted, then anyone who had ever signed up for Disney+ – even free trial users that did not extend their subscriptions – had agreed to forever waive their right to a jury trial in court against Disney or its affiliates by simply agreeing to the terms of the Subscription Agreement.

There are many situations where alternative dispute methods – such as arbitration – are preferable over litigation. Arbitration is often quicker and more informal than civil litigation. However, the efficiency of arbitration is partially due to the removal of certain formalities and procedures that would otherwise be required by the litigation process. For example, arbitrators are not required to adhere to the rules of evidence. Document production obligations in arbitration are also often much lower than the obligations imposed by the civil litigation process.

Forced arbitration clauses may cause issues in highly disputed or factually complex matters. In such matters, the discovery process and admissibility of evidence may have a greater impact on the final decision. In the Estate’s case, litigation would compel Disney to disclose all relevant documentation relating to food preparation standards and relating to employee training on serving patrons with food allergies. In arbitration, the Estate may not have access to this material since Disney would not be compelled to provide it.

Following a public outcry, Disney withdrew its motion to enforce the Arbitration Clause. Josh D’Amaro – the chairperson of Disney’s theme park division – stated that Disney believed that “this situation warrant[ed] a sensitive approach to expedite a resolution for the family who have experienced such a painful loss.”

While the Estate may yet have their day in court, or reach a settlement with Disney before trial, this does not mean that the Arbitration Clause is null and void. The Subscriber Agreement still includes the Arbitration Clause. With over 153 million Disney+ subscribers, Disney remains free to invoke the Arbitration Clause against any grievance arising from “contract, tort, warranty, statute, regulation, or other legal or equitable basis.”