Will stayed Uber class action deter use of ADR?

By Kirsten McMahon, Associate Editor

Toronto mediator and arbitrator Bernard Morrow hopes a recent ruling staying a proposed $400-million class action in favour of arbitration in the Netherlands doesn’t have a chilling effect on the use of ADR processes.

“Private dispute resolution can be a wonderful thing for disputants,” he tells “Arbitration and mediation are processes that generally offer cheaper and faster outcomes. You can pick your mediator or arbitrator with specialized substantive knowledge and communication expertise, and craft an efficient customized process that meets the parties needs.”

The Ontario Superior Court decision in Heller v. Uber Technologies Inc. involves the global ride-sharing app and a plaintiff driver who delivers food from restaurants to consumers through UberEats. The plaintiff brought a proposed class action on behalf of other drivers alleging that they are employees of Uber and therefore entitled to the benefits of Ontario’s Employment Standards Act (ESA).

In staying the class action, the judge found that the International Commercial Arbitration Act applied to the parties’ commercial agreement. The ruling also states that the matter is a complex issue of mixed fact and law to be determined in the first instance by the arbitrator, rather than a statutory interpretation to be resolved by the court.

“The irony is that by forcing the drivers to go to the company's headquarters in the Netherlands to determine their ESA rights, some of the desired benefits of arbitration — access to justice as well as time and cost efficiency — may be negated," says Morrow, principal of the full-service dispute resolution firm Morrow Mediation.

"An arbitration process conducted in the Netherlands is potentially a long-term investment of time and money,” he adds. “As a practical matter, I wonder whether any of these drivers would even go to the trouble and cost of arbitrating in Holland.”

Morrow, who is not involved and comments generally, says there is a commercial arbitration agreement in place that needs to be respected.

“Clearly, when the ADR clause in this agreement was created the intention was to use mediation and arbitration to resolve disputes and that provision is now being tested,” he says. “While I agree that this is a complicated dispute involving issues of fact and law, we may be looking at an access to justice problem. Is there a denial of justice for these drivers if they’re required to go to Holland to arbitrate?”

He fears that people who do not fully appreciate the range of creative options available on the dispute resolution spectrum may n ow see the inclusion of ADR clauses in commercial contracts as a bad thing and an impediment to providing access to justice.

“But, that's missing the mark,” Morrow says. “ADR tools are incredibly valuable in facilitating access to justice and offering processes that are timely and responsive to the needs of disputants.”

A notice of appeal has been filed, so it will be interesting to see how the Ontario Court of Appeal rules, he says.

"We haven’t heard the last of this issue," Morrow adds.

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