Heller v Uber: The Supreme Court finds arbitration clause unconscionable and establishes new test for determining when to stay litigation in favour of arbitration

On June 26, 2020, the Supreme Court of Canada (SCC) released its highly anticipated decision in Heller v Uber, 2020 SCC 16 [Heller]. Uber had applied for a stay of this proposed class action in favour of arbitration. The court of first instance had granted the stay, which the Ontario Court of Appeal set aside. The SCC upheld the Court of Appeal’s decision, concluding that the arbitration clause was invalid as it was unconscionable: (i) Mr. Heller was powerless to negotiate the terms of the contract; (ii) there was a gulf in sophistication between Mr. Heller, a food deliveryman, and Uber, a large multinational corporation; (iii) the arbitration agreement contained no information about the costs of mediation and arbitration in the Netherlands; (iv) those costs, US$14,500, that Mr. Heller needed to pay up front, constituted a hurdle to relief in that they represented close to Mr. Heller’s annual income; and (v) arbitration here was thus only “illusory.” Justice Côté, in dissent, would have granted the stay on condition that Uber pay the necessary arbitration fee.

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Michael D. Schafler

About Michael D. Schafler

Mike is a commercial litigator with almost 25 years’ experience handling significant disputes, including class actions. He has also acted as counsel on many large international and domestic arbitrations and, in 2017, obtained the Q. Arb. designation. Mike has particular expertise in auditor's liability and financial services litigation, professional negligence, real estate litigation, shareholder disputes, securities litigation, including proxy contests and contested M&A deals, and regulatory and appellate energy cases. Mike is currently a member of the Canada Region National Board, to which he was elected after serving as co-lead of the Dentons Canada Litigation and Dispute Resolution (LDR) group, and manager of the Toronto LDR group. Mike has also acted as practice leader for the global Litigation and Dispute Resolution group.

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Marina Sampson

About Marina Sampson

Marina is a commercial litigator and a partner in the firm’s Litigation and Alternative Dispute Resolution practice group. Marina is an experienced class action lawyer. She is also a member of the firm’s Environmental, Renewable Energy and Energy Law Practice Group. She is the National Co-Lead of the firm’s Products Liability Group.

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Chloe Snider

About Chloe Snider

Chloe Snider is a partner in Dentons’ Litigation and Dispute Resolution and Transformative Technologies groups. Her practice focuses on litigating complex commercial disputes and assisting clients manage risk. She is a strategic and critical legal thinker who works efficiently to develop practical solutions for her clients.

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Meredith Bacal

About Meredith Bacal

Meredith Bacal is a senior associate in the Firm’s Intellectual Property, and Litigation and Dispute Resolution groups. In her litigation practice, Meredith represents a diverse client base on matters related to media, entertainment, technology and defamation.

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