Uber Eats Settlement Agreement Rejected

Me Jimmy Ernst Jr. Lambert and Me François M.Giroux.  Source: LinkedIn and Lakehead University

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Me Jimmy Ernst Jr. Lambert and Me François M.Giroux. Source: LinkedIn and Lakehead University

The judge Pierre Gagnon of the Superior Court rejects the $200,000 agreement concluded between Uber Eats and the plaintiffs’ lawyer for two class actions.

The magistrate points to the “low pecuniary amount of the settlement” for a group made up of 1.9 million members. Also, the agreement could let Uber continue its business practices in question, being protected from future class actions, he continues. Finally, “there is an inappropriate imbalance in the distribution of the amount of the Settlement”, denounces the judge, pointing out the risk of concluding settlement agreements which “all in all, only really benefit the lawyer of the Group”.

The two class actions therefore return to the authorization request stage.

At the March 18 hearing, Uber Eats and counsel Jimmy Ernst Jr. Lambert had faced strong opposition when presenting a settlement agreement in Superior Court.

The class actions accuse Uber Eats of having carried out unacceptable business practices. The first plaintiff accuses Uber Eats of charging delivery fees without announcing them before checking out. The second plaintiff alleges that the platform added higher than expected service fees in its mobile and web application. On December 22, 2021, the Superior Court authorized the two actions.

Since then, Uber, represented by Me Francois M. Giroux of McCarthy Tétrault, reached an agreement with Me Jimmy Ernst Jr. Lambert, who represents the plaintiffs of the two class actions. Uber has pledged to pay $200,000, including $81,900 for the Class Action Relief Fund, $55,000 to charities and $63,500 for legal fees.

Members, opponents and lawyers

This proposed settlement startled several members of the groups represented by the class actions… including several lawyers.

Phil Lord, a law professor at Lakehead University, sent a brief to the clerk of the court. Me Erika Provencher, a lawyer at Siskinds specializing in class actions, had also written individually to express her opposition to the agreement, an unreasonable amount, according to her. Students from the Université de Montréal also submitted a dissertation, as part of an applied exercise, supported by their professor Catherine Piche, a specialist in evidence and civil proceedings, including class actions. The students denounced a discount agreement. Several other members would have written to criticize this agreement.

And all these lawyers who are also customers of Uber Eats were present at the Superior Court hearing on Friday, March 18, to voice their challenge to the agreement concluded between Uber and the lawyer for the two plaintiffs.

Me Lord thus explained to Judge Pierre Gagnon why the agreement should not be validated, according to his research. First, “we didn’t know how many people were affected,” notes the law professor. “The judge can therefore hardly determine whether the amount is reasonable or not. However, during the hearing, the judge asked how many notices Uber had sent about the possible settlement of these class actions, and Phil Lord then said he learned that just under two million notices had been sent. sent. “There could therefore be nearly two million people concerned,” points out Me Lord.

Second argument: “the amount is frankly ridiculous”, insists Phil Lord. “We cannot accept an amount as minimal as $55,000, paid to charities, especially since the members get nothing. »

Uber had even planned to pay out this amount in the form of shopping credits. Charities would have had to spend with Uber Eats to take advantage of these $55,000 rebates. Phil Lord agrees that we can consider the payment to charitable organizations when the defendant is not able to determine the members of the class action. “But Uber knows who its customers are,” objects the law professor.

Finally, at the hearing, Uber waived this payment in the form of shopping credits, preferring a payment in cash.

too much creativity

For Phil Lord, the members do not earn any compensation with this agreement. And he is concerned to see more and more settlements of class actions ending up like this, by putting forward a value of settlement which we do not know if it corresponds to the prejudice of the members, and which does not go in their pockets. “The defendants have an interest in settling in this way, by paying an amount in discount coupons. The plaintiffs’ lawyer generally has no interest in going further,” points out Mr. Lord, who denounces the “too great creativity” of large companies. “The same judge has already accepted the same method of settlement. This needs to be framed. This is why I intervened, ”insists the law professor.

In this specific case, Phil Lord said he was flabbergasted: “It couldn’t be worse: the members have nothing! (…) And if the settlement is accepted, they lose their right to sue. »

Uber’s attorneys said the company’s practices have changed since the class action lawsuits were filed. The multinational, however, has not admitted to having committed any fault.

What motivated plaintiffs’ counsel to agree to the settlement? At the hearing, Mr. Jimmy Ernst Jr. Lambert indicated that no case law exists for such a case, and that the chances of success are limited. For him, it was in the interest of the members to accept this agreement.

Landmark case law

Now that Judge Gagnon has rejected the agreement, Me Jimmy Ernst Jr. Lambert says he has taken note of the decision. “I understand that there are members who want us to declare the state of the law. There is no similar precedent,” he explained in an interview.

For Class Counsel, future case law will have a great impact. For Me Lambert, the question is whether delivery costs should be included from the start of the online ordering process, because it is a component of the price, or whether it is an option constituting another product than the goods ordered.

One in three websites does not include delivery costs in the starting price, he observes, predicting a multiplication of collective actions if the members of the groups obtain satisfaction. “It’s a file that risks ending up before the Court of Appeal,” he foresees.

As for Judge Gagnon’s remark on the need to avoid agreements that only benefit the group’s lawyer, Mr. Lambert observes that, precisely, given the lack of precedent, he spent an enormous amount of time on the record in research and analysis of possible decisions. “When there is a precedent, we know where we are going,” he points out.

The lawyer is now preparing to defend the request for authorization of class actions, and to work to declare the state of the law in this case. “Members want the legal response to the file; we will go to plead, ”he said.

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