On Sept. 16, 2019, aspiring interveners in the Uber v. Heller 2019 ONCA 1 appeal in the Supreme Court of Canada (the Uber case) filed their motions for leave to intervene. The submissions filed by several arbitration organizations make for rather depressing reading. With one or two notable exceptions, what they support is the notion that even when there is a direct conflict between arbitration and access to justice, arbitration must win.
Although each brief advances different arguments, the common result of most is that there is no way to protect vulnerable workers in Ontario from arbitration agreements that would hinder and, for all practical purposes, block their access to laws that fundamentally differentiate our society from other, exploitive economies. This is even more so, it seems, if the employer is a foreign employer because the arbitration agreement then becomes “international.” The implication is that to do otherwise would cause the international business world and arbitration community to lose respect for Canada as a centre for international arbitration.
All of these are highly debatable propositions advanced in support of an unworthy cause.
It should be noted at the outset that that the issue should have nothing to do with David Heller in particular. As the Supreme Court of Canada held in Seidel v. Telus 2011 SCC 15 and as the Court of Appeal held in the Uber case, the qualifying status of a claimant under legislation such as the Employment Standards Act (ESA) is presumed at the outset. This must be right. In ordinary commercial arbitration, referring all issues first to the arbitrator makes good sense. But for claims such as those under the ESA, to require status to first be determined by an arbitrator would strangle virtually all such claims at birth. The mere engagement of the arbitration process will be prohibitively expensive and the risk too great for all but a few claimants.
Nor does the issue have anything to do with the particular elements of the arbitration clause such as choice of arbitral institution or place of arbitration, as inappropriate as they may be in Uber. The requirement that each claimant must act alone in taking on Uber in a private arbitration creates, for all practical purposes, an insurmountable barricade to the enforcement of the rights (particularly common rights) of claimants under the ESA. Clearly, that is the main benefit of the clause to Uber.
Nor should the issue have anything to do with the arbitration clause in the Uber case being international. Either an employer of Ontario residents can effectively contract out of the ESA (directly, or indirectly by using a colourable arbitration agreement) or it cannot. As in Seidel, an agreement to arbitrate claims under a statute may be found to be invalid because it is in conflict with that statute’s purpose. That is a threshold question of law when it is raised for determination by the courts of Ontario in both international and non-international arbitration agreements.
According to several arbitration organizations that seek to assist the court on the appeal, the result of allowing arbitration clauses to defeat legislation establishing basic rights cannot be avoided because of an international consensus to that effect.
However, the only other jurisdiction which has extensive case law that addresses mandatory arbitration agreements when there is a class action or class arbitration option available is the U.S. In virtually all other jurisdictions, individual arbitrations are unlikely to result in proceedings significantly more onerous than individual court actions. So, the issue is quite different. Even so, courts around the world have in fact held mandatory arbitration clauses such as those in the Uber case to be unconscionable.
In the U.S., the dominant frame of reference for the courts on this issue has been neither international arbitration norms nor social justice. The issue has been the constitutional doctrine of pre-emption and its application to the Federal Arbitration Act.
Members of arbitral organizations are not just practitioners of arbitration. We are also privileged citizens who have an important role to play in making arbitration an effective part of the justice system. We should not collectively present ourselves as naïve cheerleaders for any one category of arbitration users, particularly a category that is primarily interested in suppressing claims rather than in effectively resolving them.
Acknowledging the limits beyond which arbitration must defer to legislation aimed at protecting vulnerable members of our community, and providing greater access to justice, is key to maintaining the legitimacy of arbitration and public support for it.
Arbitration is in many ways the Superman of dispute resolution processes. It is able to leap over international borders and protect rights that would otherwise be lost to inefficient and ineffective court processes. However, mandatory arbitration, in cases such as Uber, resembles Superman’s Bizarro twin. It has the same superpowers but uses them to malign effect.
The arbitration community should demonstrate that it understands the difference between normal arbitration and mandatory arbitration and should assist the court by showing how to make and implement the distinction without harming the principles applicable to normal arbitration. The motion to intervene by ADR Chambers is exemplary in having done this.
However, many arbitration organizations that sought leave to intervene in Uber have failed the test.
William Horton is an arbitrator of Canadian and international business disputes. He is based in Toronto, http://www.wgharb.com