Uber Tightens Rider and Driver Agreements to Curb Third-Party Litigation Funding

Uber Technologies Inc. has introduced new contractual requirements aimed at discouraging lawsuits backed by third-party litigation funders by requiring customers and drivers who sue the company to disclose details of any such funding arrangements.

The requirement, included in contracts for drivers and within the Uber app's legal terms for customers, could make it more difficult for consumers and workers to secure external financial backing for claims against the company, according to Maria Glover, Carmack Waterhouse Professor of Law at Georgetown University.

"No rational funder is going to inject themselves into a case where they have to disclose basically their due diligence and their work product," Glover said. Company executives, she added, "want to cut off the avenues to going after them." Uber did not respond to requests for comment.

The move highlights the extent of corporate opposition to the rapidly expanding litigation funding industry, in which investors finance lawsuits in exchange for a share of any financial recovery. Uber and several other companies have supported efforts in Congress and state legislatures to restrict or prohibit the practice, arguing that it encourages excessive litigation.

In a letter sent to lawmakers last year, Uber and more than 50 other companies and organisations said proposed US legislation to tax profits from litigation investments "will help curb abusive lawsuits and level the playing field for American companies". The proposed legislation, however, has stalled in Congress.

Bloomberg Law obtained a copy of Uber's agreement with its drivers through court documents. The corresponding requirement for riders is available to registered users in the legal terms and conditions section of the Uber app.

The contractual language for drivers and riders is identical. It requires anyone bringing legal proceedings against Uber to disclose the identity of any litigation funder providing financial support for the claim. Claimants must also provide Uber with copies of any litigation funding agreements, and the requirement extends to any appointed arbitrator.

The agreement further states that users and drivers bringing claims against Uber waive attorney-client privilege and confidentiality protections for documents shared between themselves, their legal representatives and the litigation funder.

The language "is just an attempt to slow down claims being filed and actually adjudicated," said Shannon Liss-Riordan, a partner at labour law firm Lichten & Liss-Riordan, who has represented Uber drivers in previous cases but does not use litigation funding. "They try to make it as hard as possible for anyone to go forward with their claims."

Uber is "sending a very strong message" through the new provisions, Glover said. "When you're talking about wage and hour workers and/or sexual assault, that's pretty egregious."

Litigation Challenges

Uber continues to face thousands of lawsuits from passengers alleging sexual assault. In February, the company lost its first federal bellwether trial and was ordered to pay an $8.5 million jury award after a 19-year-old woman claimed she was raped by her driver in Arizona.

In June, Uber's board members and senior executives were sued over allegations that they failed to devote sufficient resources to customer safety and fostered a culture of regulatory non-compliance.

The company has also actively pushed back against broader legal challenges. In California, it supported a campaign asking voters to cap contingency fees for lawyers in motor accident cases at 25 per cent and limit certain medical payouts. Uber later reached a compromise with the plaintiffs' bar, agreeing instead to support legislation capping medical damages in motor accident cases involving medical liens for victims' treatment. The law also prohibits kickback arrangements between personal injury lawyers and medical providers.

Uber also provides partial backing to Protecting American Consumers Together, a non-profit advocacy group whose stated mission is to promote a fair and transparent legal system and protect consumers from what it describes as the "exploitative practices" of the personal injury industry.

The organisation has supported state-level legislation on tort reform and litigation funding, including a Georgia law signed by Governor Brian Kemp last year. The legislation allows litigation funding agreements to be disclosed during court proceedings and prohibits funders from directing the litigation they finance.

In June, the UK High Court ruled in a case involving Uber that litigation funders cannot claim litigation privilege over communications prepared to assess the commercial viability of a claim. Uber successfully sought disclosure of correspondence between the claimant's solicitors at Mishcon de Reya and Harbour Litigation Funding, with the High Court granting the application.

 
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