Court File and Parties

Court File No.: CV-21-659095-00CP Date: 2023-08-11 Superior Court of Justice - Ontario

Re: William Daniel Lewis And: Uber Canada Inc., Uber Technologies Inc., Uber B.V., Uber Portier Canada Inc. and Uber Portier B.V.

Before: J.T. Akbarali J.

Counsel:

• L. Craig Brown, Darcy R. Merkur, Robert Ben, Stephen Birman and Lucy G. Jackson, for the plaintiff
• Dana M. Peebles, for the defendants

Heard: In writing

Proceeding under the Class Proceedings Act, 1992

Endorsement

Overview

[1] The plaintiff in this putative class action seeks approval of a third-party funding agreement, entered into on June 22, 2023.

[2] The plaintiff’s allegations against the defendants in this litigation are, briefly, that to entice customers to use the Uber Eats App, the defendants offer promotional discounts off the price of a customer’s food order. The discount offers comprise percentage discount, fixed dollar discounts, “buy one get one free” discounts, and free delivery offers.

[3] The plaintiff alleges that, despite the discounts, the defendants charged sales tax on the full, pre-discounted, price of customers’ orders when the customers redeemed a promotional discount. The plaintiff claims that this practice overcharged him, and the proposed class members, contrary to the express terms of his agreement with the defendants, and contrary to legislation. The plaintiff alleges that the defendants have breached the contract with class members, and breached provincial consumer protection statutes and the federal Competition Act, R.S.C. 1985, c. C-34. The plaintiff seeks damages corresponding to the amounts allegedly overcharged, as well as punitive damages, from the defendants.

[4] The third-party funding agreement provides that the funder will indemnify the plaintiff for adverse costs award in this action, up to a proscribed maximum amount. In exchange, the funder will receive a premium to a maximum of 10% of the litigation proceeds awarded to the class, up to a specific maximum amount.

[5] The amount of the premium paid, the prescribed maximum amount of indemnification, and the maximum premium payable to the funder have all been redacted in the motion record publicly filed. I have received a copy of the unredacted agreement. I am satisfied that the redactions are permissible, under the terms of s. 33.1(5) of the Class Proceedings Act, 1992, S.O. 1992, c. 6 (“CPA”), reproduced below, because disclosure of the redacted information may confer a tactical advantage on the defendants.

[6] I note that the funding agreement provides an indemnity to the plaintiff that is not otherwise available. The plaintiff’s retainer agreement with class counsel offers only an interim indemnity pending an application for financing to the Class Proceedings Fund. The plaintiff’s evidence is that he was unsuccessful in obtaining financing from the Class Proceedings Fund.

[7] As with many class actions, the value of the plaintiff’s loss is small compared to the risk of an adverse costs award in the litigation. Accordingly, a third-party funding agreement providing indemnity for adverse costs awards is a practical necessity for the plaintiff to continue to pursue the litigation, and seek access to justice for the class.

[8] Recent amendments to the CPA have codified the common law requirement that plaintiffs must obtain court approval of third-party funding agreements, and set out the requirements for approval. Section 33.1 of the CPA states:

Third-party funding agreements

33.1 (1) In this section,

“third-party funding agreement” means an agreement in which a funder who is not a party to a proceeding under this Act agrees to indemnify the representative plaintiff or provide money to pursue the proceeding under this Act, in return for a share of any monetary award or settlement funds or for any other consideration.

Contingent on court approval

(2) A third-party funding agreement is subject to the approval of the court, obtained on a motion of the representative plaintiff made as soon as practicable after the agreement is entered into, with notice to the defendant.

No force or effect unless approved

(3) A third-party funding agreement that is not approved by the court is of no force or effect.

Agreement to be provided to defendant and filed

(4) For the purposes of the motion, the representative plaintiff shall serve on the defendant, or provide in any other way the court orders, a copy of the third-party funding agreement, and shall file the copy with the court.

Permissible redaction

(5) The representative plaintiff may, subject to the regulations, redact from the copy of the third-party funding agreement provided and filed under subsection (4) information that may reasonably be considered to confer a tactical advantage on the defendant, but no other information shall be redacted from the copy.

Agreement to be provided to judge

(6) The representative plaintiff shall provide to the judge who will be presiding at the hearing of the motion a copy of the complete and unredacted third-party funding agreement, which shall not form part of the court file.

Requirement to disclose

(7) The court may order the representative plaintiff to disclose to a defendant any information in the third-party funding agreement that has been redacted in accordance with subsection (5).

Submissions

(8) The defendant is entitled to make submissions at the hearing of the motion.

Factors

(9) The court shall not approve a third-party funding agreement unless,

(a) the court is satisfied that,

(i) the agreement, including indemnity for costs and amounts payable to the funder under the agreement, is fair and reasonable,

(ii) the agreement will not diminish the rights of the representative plaintiff to instruct the solicitor or control the litigation or otherwise impair the solicitor-client relationship,

(iii) the funder is financially able to satisfy an adverse costs award in the proceeding, to the extent of the indemnity provided under the agreement, and

(iv) any prescribed requirements and other relevant requirements are met; and

(b) it is a term of the agreement that the funder shall be subject to,

(i) the same confidentiality requirements in respect of confidential or privileged information in the proceeding to which the representative plaintiff would be subject, and

(ii) the deemed undertaking rules set out under the rules of court, as if the funder were a party to the proceeding.

Same, independent legal advice

(10) In determining whether a third-party funding agreement meets the requirements of clause (9) (a), the court shall consider whether the representative plaintiff received independent legal advice with respect to the agreement.

Indemnity for costs

(11) If costs are ordered to be paid by the representative plaintiff, the defendant has the right to recover the costs directly from the funder, to the extent of the indemnity provided under an approved third-party funding agreement.

Security for costs

(12) The defendant is entitled, on motion, to obtain from the funder security for costs to the extent of the indemnity provided under an approved third-party funding agreement, if,

(a) the funder is ordinarily resident outside Ontario;

(b) the defendant has an order against the funder for costs in the same or another proceeding that remain unpaid in whole or in part; or

(c) there is good reason to believe that the funder has insufficient assets in Ontario to pay the costs.

Directions

(13) The court may give any necessary directions respecting a dispute or question that arises in relation to a third-party funding agreement.

Changes to agreements

(14) This section applies, with necessary modifications, with respect to any changes to an approved third-party funding agreement that are agreed to by the parties to it.

Notice of termination

(15) The representative plaintiff shall give notice to the court and to the defendant if,

(a) an approved third-party funding agreement is terminated; or

(b) the funder becomes insolvent.

Non-application

(16) This section does not apply with respect to funding provided out of the Class Proceedings Fund established under the Law Society Act.

[9] I am satisfied that the funding agreement satisfies the requirements set out in the CPA. The agreement is fair and reasonable. It seeks a reasonable reward for providing necessary indemnity. It provides that the representative plaintiff and class counsel will control the litigation and make decisions in relation to it. There is evidence in the record from the funder that satisfies me that the funder is able to satisfy an adverse costs award in the proceeding to the extent of the indemnity provided under the agreement.

[10] Moreover, the technical requirements of s. 33.1, requiring that the funder shall be subject to the same confidentiality requirements as the representative plaintiff, and to the deemed undertaking rule, are met. The representative plaintiff has received the necessary independent legal advice, the appropriate disclosures have been made, and the affected parties have been given notice and an opportunity to be heard.

[11] I am advised that the defendants do not oppose the motion for approval of the funding agreement.

[12] In these circumstances, I grant the motion and approve the third-party litigation funding agreement.

[13] Counsel have provided a draft order. I am advised that the defendant approve the form and content of the draft order except the first paragraph, which the defendants were content to leave to my discretion. I have deleted the first paragraph from the order. The first paragraph would have had me order (I suppose in the nature of a declaration) that the agreement is fair and reasonable and will not diminish the rights of the plaintiff to control the litigation or impair the solicitor-client relationship.

[14] In my view, it is neither appropriate nor necessary to encapsulate in the order what are, in fact, findings in my reasons. I have thus deleted the paragraph from the order. Order to go in accordance with the draft I have amended and signed.

J.T. Akbarali J. Date: August 11, 2023