Is Uber acting unconscionably in Australia?
<p>Section 6 of Uber's <a href="https://www.uber.com/legal/terms/au/" rel="nofollow noreferrer">Terms and Conditions</a> for Australian customers requires that all disputes go to arbitration before the International Chamber of Commerce in the Netherlands and that the contract shall be construed under the laws of the Netherlands.</p>

<p>It seems to me that this has the effect of shielding Uber from most claims for damages, such as property which is damaged while on a ride, since:</p>

<ol>
<li>It prevents a claim from being lodged in the appropriate small claims court; and</li>
<li>The cost for hearing before the ICC is approximately $5,000; and</li>
<li>Dutch law is significantly different to Australian law; and</li>
<li>Uber refuses to discuss or entertain claims for damages and in my opinion is not acting in good faith; and</li>
<li>The relative bargaining strength of Uber to set the terms and conditions if you wish to use their services.</li>
</ol>

<p>Is Uber acting unconscionably as defined in the Competition and Consumer Act in requiring claimants to first go through the prohibitively expensive ICC procedure? If so, is there any applicable case law or precedent?</p>

<p>Is Uber potentially violating any other consumer protection or Australian or ACT law?</p>

<p>Under <a href="http://consumerlaw.gov.au/the-australian-consumer-law/legislation/" rel="nofollow noreferrer">Australian Consumer Law</a> (ACL) the test is not <a href="https://en.wikipedia.org/wiki/Unconscionability" rel="nofollow noreferrer">unconscionably</a>; for standard form consumer contracts its unfairness:</p>
<blockquote>
<p>A court may declare a term ‘unfair’ if:</p>
<ul>
<li><p>it would cause a significant imbalance in the parties’ rights and obligations arising under the contract;</p>
</li>
<li><p>it is not reasonably necessary to protect the legitimate interests of the party that would be advantaged by the term; and</p>
</li>
<li><p>it would cause detriment to a party if it was relied on.</p>
</li>
</ul>
</blockquote>
<p>However, an important caveat is that a term that is specifically allowed by Australian law is <strong>not</strong> unfair.</p>
<p>To clarify slightly, the dispute resolution clause in Section 6 requires mediation <em>before</em> binding arbitration, both under the respective ICC rules and both with their seat in Amsterdam under Dutch law.</p>
<p>A few things to say to start with:</p>
<ul>
<li>Choice of law clauses are supported by Australian law. However, the Australian Consumer Law <strong>cannot</strong> be excluded by contract so the proceedings would be under the ACL first and Dutch law where the ACL did not apply.</li>
<li>Mediation and arbitration are both supported (and encouraged) by Australian law, including agreeing on the seat, so those terms are not <em>prima facie</em> unfair.</li>
<li>Limitations of Liability clauses (such as that under Clause 5) are also supported by Australian law so that is not <em>prima facie</em> unfair.</li>
</ul>
<p>However, there are a number of issues with the Uber ToS that <em>may</em> meet the threshold of 'unfair' and/or may breach the 'misleading and deceptive conduct' provisions in the ACL. In no particular order:</p>
<ul>
<li><p>The costs under the <a href="https://cdn.iccwbo.org/content/uploads/sites/3/2017/01/ICC-2017-Arbitration-and-2014-Mediation-Rules-english-version.pdf.pdf" rel="nofollow noreferrer">ICC</a> rules of USD 5,000 are considerably more than the costs of using and Australian service like the AUD 1,000 charged by the <a href="https://www.resolution.institute/documents/item/1844" rel="nofollow noreferrer">Resolution Institute</a>. Similarly, the seat being in Amsterdam is likely to &quot;cause detriment&quot; to Australian consumers. I am not <a href="http://www.marquelawyers.com.au/assets/marque-update_ubers-arbitration-clause-is-taking-people-for-a-ride.pdf" rel="nofollow noreferrer">alone</a> in this view but it has not yet been tested AFAIK.</p>
</li>
<li><p>s60 of the ACL impose a warranty that services will be rendered with due skill and care: damage that arises from this failing to happen cannot be excluded or limited by contract.</p>
</li>
<li><p>Similarly claims for misleading and deceptive conduct cannot be excluded following the decision in <a href="https://corrs.com.au/insights/supreme-court-shuts-the-door-on-excluding-liability-for-misleading-or-deceptive-conduct-claims" rel="nofollow noreferrer">Brighton Australia Pty Ltd v Multiplex Constructions Pty Ltd [2018] VSC 246</a>.</p>
</li>
<li><p>The claim that Dutch law applies &quot;exclusively&quot; is patently wrong and therefore 'misleading and deceptive'. Even if Uber believes it (and I doubt their legal team does) misleading and deceptive conduct under ACL does not have a defence of genuine belief.</p>
</li>
<li><p>the DISCLAIMER says &quot;UBER DISCLAIMS ALL REPRESENTATIONS AND WARRANTIES, EXPRESS, IMPLIED OR STATUTORY, NOT EXPRESSLY SET OUT IN THESE TERMS&quot; - they can't do this. Even though they say at the end &quot;... TO THE MAXIMUM EXTENT PERMITTED UNDER APPLICABLE LAW&quot; this is unlikely to be sufficient to claim that the initial statement was not misleading.</p>
</li>
</ul>
<p>It hasn't yet been tested but if I wanted to bring a claim against Uber I would just go down the the Local Court and file a Statement of Claim - I would feel pretty confident that the magistrate would rule against them and that Uber would be unlikely to appeal.</p>

consumer-protection australia