Supreme Court Of Canada's Uber Ruling Provides A Roadmap To Navigate Between Arbitration And Class Actions

In Uber Technologies Inc. v. Heller,¹ the Supreme Court of Canada invalidated a widely used arbitration clause and thereby gave Uber drivers the green light to proceed with a proposed class action.  The decision is a cautionary tale for businesses that may assume their arbitration clauses in standard form contracts serve as a roadblock to class action litigation. Businesses that rely on arbitration clauses in standard form agreements should carefully review the wording of these clauses to increase the likelihood that they will survive future challenges by class action plaintiffs.

At the same time, the Supreme Court's careful reasons generally uphold a vital principle of commercial arbitration - the presumption that challenges to an arbitrator's jurisdiction are for the arbitrator to decide in first instance.  The Ontario Court of Appeal had severely restricted this principle - known as "competence-competence" - in its desire to remedy a perceived injustice to the