February 23, 2021 Articles

Enforcing Standard-Form Arbitration Agreements in Class Actions: Lessons from the Uber Saga in Canada

The decision clarifies that arbitration agreements should give effect to contracting parties’ genuine intention to refer disputes to a realistically attainable arbitration process and may be scrutinized by the courts.

By Gannon Beaulne, Maya Bretgoltz, and Ranjan Agarwal

In June 2020, the Supreme Court of Canada released its decision in Uber Technologies Inc. v. Heller, 2020 SCC 16, a proposed class action alleging violations of Ontario’s employment standards legislation. The decision arose from a preliminary request by Uber to stay the proposed class action in favor of arbitration under an arbitration clause in a standard-form agreement governing drivers. The plaintiff argued that the arbitration clause was unfair and should not be given effect because it required drivers to start arbitration proceedings in Amsterdam, which involves incurring US$14,500 in filing fees. Uber argued that any issue concerning the arbitration agreement’s validity should be referred to arbitration under the general rule of systematic referral of challenges to jurisdiction, as laid down by the Supreme Court in Dell Computer Corp. v. Union des consommateurs, 2007 SCC 34, another proposed class action.

Uber’s stay request underscores a tension between two precepts of private law when they interact in the context of class actions and arbitration: on the one hand, party autonomy and freedom of contract—including that the arbitrator, not the courts, should typically decide questions of arbitral jurisdiction—and, on the other hand, access to justice.

Premium Content For:
  • Litigation Section
Join - Now