Is the truth not that such pro-arbitration statutes have been enacted
because there is a "market" for arbitrations and countries are in
competition for that business?

Kind regards

Ger

On 6/27/20, Paul Stanley QC <PStanley@essexcourt.net> wrote:
> I don't have a strong view on the decision itself, partly because I find the
> whole "unconscionability" debate difficult (the use of a portentous but
> essentially /meaningless/ jargon word is a sort of red flag ...) and partly
> because it looks to have been dancing around a thicket of statutory thorns,
> and that often demands some intellectual sleight of hand.
>
> But aren't there bigger issues?
>
> We get here at all because arbitration (which is an *industry*, with some
> powerful industry interest-groups, all the more dangerous because they wrap
> themselves disarmingly in the mantle of public interest) has made special
> claims over the past 50 years, and has been extraordinarily successful in
> getting them satisfied. The essential articles of faith are: (1) arbitration
> agreements should *almost always* be enforced by keeping the parties out of
> court; (2) things that /superficially look/ like arbitration agreements
> should *almost always* be enforced too ("competence competence", "kompetenz
> kompetenz"); (3) bits of a contract that contain an arbitration agreement
> should be enforced even if the contract as a whole wouldn't be
> ("separability"); (4) 1-3 apply regardless of how expensive, time-consuming,
> pointless, or downright unreliable the result of the arbitration process may
> be; (5) to a considerable degree, the entire process should remain shrouded
> in secrecy, so that we can never even *find out* just how expensive,
> time-consuming, pointless, or downright unreliable it might be. That
> mightily assists the vested interests in presenting a sometimes heavily
> photoshopped image.
>
> Those attitudes are more-or-less justifiable given an assumption that
> arbitration agreements are things that find themselves into
> business-to-business commercial contracts, though even there arbitration has
> some real drawbacks. But commercial actors can take advice, and they can
> decide if the gain exceeds the pain, which it certainly can. They spend
> their lives making bad deals, and in the long run we do best to make them
> live by and with them.
>
> To apply those principles to contracts which are likely to be entered into
> by ordinary people who have no reasonable way of understanding what they are
> agreeing to is absurd. To apply them in cases where the practical effect of
> the arbitration agreement is as good as a clause which said "Under no
> circumstances will you be able to obtain any remedy for breach of this
> agreement" is revolting.
>
> The bigger question, for me, is whether this case shows that the "older way"
> was right: the courts preserved the power to decide whether to enforce an
> arbitration agreement, i.e. where the parties agreement to "avoid the
> courts" was regarded as an interesting decision which might or might not be
> allowed). As late as 1996, when England reformed its arbitration law, it
> had been intended to preserve that power outside the sphere of
> "international commercial" cases (see Arbitration Act 1996, ss 85-86, never
> brought into force). It looks as if the position in Canada is similar, and
> that provinces have adopted "pro-arbitration" statutes that extend the New
> York Convention regime to non-Convention cases.
>
> Invalidating unfair arbitration agreements is a rather crude technique.
> Deciding whether or not to give effect to them /after/ a "dispute" arises
> allows more flexibility, which may be very useful. I think it's worth asking
> not just whether the court here usefully navigated the difficult terrain on
> which the statutory provisions placed it, but whether it should have had to
> navigate that terrain at all.
>
> --
> Paul Stanley QC
> D +44 20 7147 7340
> T + 44 20 7813 8000
>
>
> ________________________________________
> From: Frederick Wilmot-Smith <frederick.wilmot-smith@all-souls.ox.ac.uk>
> Sent: 27 June 2020 12:11
> To: Obligations
> Subject: Re: Supreme Court of Canada on Unconscionability in Contract
>
> 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.
>
> Brown J makes these points, and more. So it is depressing that he is on his
> own—and that the majority do not even bother to say why they disagree with
> his analysis.
>
> Not a good decision.
>
> On 26 Jun 2020, at 18:41, Stéphane Sérafin
> <Stephane.Serafin@uottawa.ca<mailto:Stephane.Serafin@uottawa.ca>> wrote:
>
> Yet Justice Brown at least attempts to outline what the distinction between
> public policy and unconscionability might be, by contrast with the majority
> which, on a cursory reading, appears to take us further down the road taken
> in Douez by subsuming public policy under equitable considerations. Frankly,
> this strikes me as a victory of sorts for proponents of (near-)absolute
> freedom of contract.
>
> From: Jack Enman-Beech <jenmanbeech@gmail.com<mailto:jenmanbeech@gmail.com>>
> Sent: June 26, 2020 1:17 PM
> Cc: Obligations <obligations@uwo.ca<mailto:obligations@uwo.ca>>
> Subject: Re: Supreme Court of Canada on Unconscionability in Contract
>
> Attention : courriel externe | external email
> As when a gang uses high pressure door-to-door sales tactics to push its
> protection racket—the resulting agreements are likely to be both inequitable
> and against public policy. The case was argued on unconscionability grounds
> probably for pragmatic reasons: unconscionability is relatively developed in
> Canadian law and commentary. Arguing for a public policy ensuring access to
> courts would have seemed riskier, particularly in the face of legislative
> support for arbitration. Academic support for such a public policy approach
> might have forestalled the extension of unconscionability. Justice Brown had
> almost no scholarship to cite in support of his public policy position,
> while the majority sees its unconscionability arguments reflected in work by
> most of the leading Canadian contract scholars.
>
> Jack Enman-Beech
> SJD Candidate, University of Toronto Faculty of Law
>
> On 26 Jun 2020, at 16:28, Robert Stevens
> <robert.stevens@law.ox.ac.uk<mailto: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<mailto:spitel@uwo.ca>>
> Sent: 26 June 2020 15:01
> To: Obligations <obligations@uwo.ca<mailto: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
>
>
>
>
>
> [Western Law]
>
> 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
>
>