Legal Blog

Unconscionable

Heller v. Uber Technologies Inc. 2019 Ont CA

A driver’s agreement stated that any dispute had to be resolved under the laws of, and arbitrated in, The Netherlands under the International Chamber of Commerce Mediation Rules and ICC Arbitration Rules. Compliance with this provision would result in a deposit of at least $14,500 US in addition to all other fees involved with mediation and arbitration. A driver was the representative of a class action claiming that drivers were employees and that Uber had breached the Employment Standards Act. The court refused to stay the action in accordance with the Arbitrations Act because (i) if the driver’s allegations were correct, the arbitration clause would be invalid as contravening the Act; and (ii) in any event, the provision was unconscionable. As to unconscionability, the driver proved a grossly unfair and improvident transaction, lack of independent legal advice or other suitable advice, an overwhelming imbalance in bargaining power, and Uber taking advantage of the driver’s vulnerability. The court discussed the possibility that the test for unconscionability would only necessitate proof of 2 elements: inequality of bargaining power and unfairness. However, the court did not deal with this alternative because the four criteria were met. The Supreme Court of Canada has granted leave to appeal.

Written by Jonathan Speigel, the founding partner of Speigel Nichols Fox LLP, leads the litigation and construction practices.