2 ms·
The thing is, insurance is almost always meant to spread around risk from random events, such as a car accident, unexpected disease, act of nature, or in the mo
by akiselev 11y ago
The thing is, insurance is almost always meant to spread around risk from random events, such as a car accident, unexpected disease, act of nature, or in the most extreme case, an engineering or manufacturing mistake that causes a rocket to blow up. Except in cases of fraud, these situations arise randomly or due to systemic problems that can be quantified within the context of the insured parties. With arbitration, especially when mandated by an employer, the process is easily used to make possible behavior that the legal system would otherwise never allow, by people who fully intend to do so, just like when someone buys insurance with the intent of burning their own house down for the cash payout. Unlike the insurance company, however, the employee has no remaining legal recourse outside of a predetermined (and possibly biased) arbitration process just because it is in the contract.
If an employer is explicitly trying to minimize their risk and costs by mandating arbitration how can you ever trust them to pick an unbiased arbiter? If an agent is trying to maximize their outcomes by forcing arbitration, why would they then chose any arbiter that isn't more likely to side with them?
You can argue that allowing arbitration is a trust signal, but at the same time it can send a signal that the employer is planning on, or at least thinks it a possibility, that they will violate some terms of the contract, whether those terms are explicit or implicit (i.e. due to legislation or court precedent). The problem is that the information assymetry between an employer and employee is so vast such that arbitration is a tool easily used to further exploit workers.
- nickff 11y ago>"The thing is, insurance is almost always meant to spread around risk from random events..." Health 'insurance' covers many predictable issues, such as eye glasses and continuing care issues, but I will grant you that insurance is generally best used to hedge against risk. A number of national US insurance providers offer policies which cover employee suits, so it must be a large, insurable market.[1] >"If an employer is explicitly trying to minimize their risk and costs by mandating arbitration how can you ever trust them to pick an unbiased arbiter? If an agent is trying to maximize their outcomes by forcing arbitration, why would they then chose any arbiter that isn't more likely to side with them?" There are many kinds of risk which one might try to minimize; one of these risks might be that of a long, drawn-out civil jury trial which can take a long time to be seen, and have a completely unpredictable outcome. Having an arbitrator decide against you for a reasonable sum might be preferable to devoting time and resources to a trial and investor relations disaster over many years (even if the verdict is in your favor). In addition, having a defined process from the outset may help the damaged party get their issue resolved quickly and easily; as a long civil suit can be ruinous to an individual (even if they win). In short, real people are not risk-tolerant robots. [1] https://www.nationwide.com/employment-practices-liability-insurance.jsp https://www.nationwide.com/employment-practices-liability-in...
- deleted 11y ago[deleted]