I’ve only read the opinions once, but even on my superficial grasp of the issues, Brown J’s analysis seems plainly superior to the majority’s. 

The majority’s framework is inapt to analyse the problems of contracts of adhesion. Consider this: a contract is ‘unconscionable’, we are told, if there is "an inequality of bargaining power, stemming from some weakness or vulnerability affecting the claimant and . . . an improvident transaction”. (The majority has, in one fell swoop, abolished any knowledge requirement.) But Heller’s contract wasn’t obviously improvident on the date it was agreed (majority at 74). Uber’s model seems to be to make legal enforcement essentially impossible and then to act as judge and jury in their own disputes with their clients and drivers. This has advantages for clients and drivers: Uber saves the costs of vexatious disputes and can allocate some of the resultant benefits to resolving some facially justified complaints without any issue, and to keeping the good employees on side. (The record, I think, was that Heller had complained c.200 times, and those complaints had been resolved. Maybe some of those ‘remedies’ weren’t strictly warranted as a matter of law: Uber has to keep its drivers sufficiently sweet to stick around.) So: if, ex ante, you’re likely to be a net beneficiary of this contractual structure, you may not be improvident in agreeing to it. 

The majority analysis on improvidence, if you can call it that, is at 94. It’s not clear they’ve even seen the problem. And they follow it up at 95 with a  clanger it’s painful to see in print, let alone as the product of a Supreme Court decision: "The arbitration clause, in effect, modifies every other substantive right in the contract”. Substantive rights are not modified by their unenforceability; their unenforceability is a problem precisely because the rights are still there. 

All this means that the majority’s choice of framework is something of a wolf in sheep’s clothing: Uber (and their ilk) will argue that the clauses are not improvident; and, if the courts are honest, some such arguments will succeed. But this is a dumb road to take Canadian law down: the agreement should not be enforced even if the driver was ex ante rational. Which, I take it, is part of Brown J’s point. 

Another problem. The arbitration contract’s terms are only contingently bad—i.e. when the driver’s grievance is not resolved consensually. Compare that to ‘classic' unconscionability (cf. majority at 4), where a drunk heir agrees to pay 74,982% interest on a loan so they can buy more liquor: the interest rate is bad sans phrase; there’s no contingency to it. This shows that the injustice here just isn’t the same as substantive injustice in the matrix contract. 

Relatedly, the court’s concern is different in these two cases. One problem with the 74,982% clause is that the court and the state should not implicate themselves in such outrageous agreements—which they do if they enforce the agreements. The problem with outrageous arbitration contracts is the opposite: the courts and the state should not wash their hands of contractual enforcement. So: something has gone wrong if you’re using the same analytic tools for both cases. 

And another problem. If the majority’s framework were correct, Uber was right to run the case on competenz-competenz grounds. But it’s ridiculous to think that an ICC arbitral tribunal should determine Canadian public policy on access to justice (all the more so when the clause is designed to ensure that the tribunal will never even get to the question). If, then, Brown J is right (as he is) that the core issue is Canadian public policy, all Uber’s argument on this essentially misses the point. 

On 26 Jun 2020, at 16:28, Robert Stevens <robert.stevens@law.ox.ac.uk> wrote:

Seems very odd indeed to me to think this is about "unconscionability". The case isn't properly about the parties' rights and obligations inter se. The "arbitration agreement" (sic) doesn't purport to alter those. It should be about whether an agreement between the parties can oust the court system's ability to hear a claim. It is an attempt by agreement to exclude civil recourse for wrongdoing. That doesn't require the court to embark on the sexy and exciting question of inequality of bargaining power. It is a public policy matter. It isn't about the proper limits on the powers of the parties to bind themselves by agreement (ie "freedom of contract"). It shouldn't matter if the driver were a bit richer, the form a bit more individually negotiated, or its terms a bit less egregious.

Brown J looks right to me. The approach of the majority both a mistake, and the source of future litigation.

---

From: Stephen Pitel <spitel@uwo.ca>
Sent: 26 June 2020 15:01
To: Obligations <obligations@uwo.ca>
Subject: ODG: Supreme Court of Canada on Unconscionability in Contract

 

The Supreme Court of Canada has released its much-awaited decision in Uber Technologies Inc. v Heller:

 

https://decisions.scc-csc.ca/scc-csc/scc-csc/en/item/18406/index.do

 

I have not read it yet, but it seems to cite a great deal of academic authority around unconscionability.

 

Stephen

 

 

Professor Stephen G.A. Pitel
Faculty of Law, Western University
(519) 661-2111 ext 88433
Vice-President, Canadian Association for Legal Ethics/Association canadienne pour l’ethique juridique

Past President, University of Western Ontario Faculty Association