5 ms·
I'm going to ask what might be a dumb question, because I don't know any better. But is there any statistical evidence that arbitration results in worse outcome
by morley 9y ago
I'm going to ask what might be a dumb question, because I don't know any better. But is there any statistical evidence that arbitration results in worse outcomes for the consumer, or is all the hate theoretical for now? People on HN and otherwise speak about arbitration like it's an auto-loss for the consumer, but it's not like our court systems are guaranteed to be much fairer.
EDIT:
It looks like the bottom of the article explains that the US Consumer Bureau studied arbitration and found it anti-consumer:
As arbitration clauses appeared in tens of millions of contracts, the consumer agency was specifically mandated to study arbitration under the Dodd-Frank financial law in 2010. That effort culminated in a 728-page report, released in March 2015, that challenged longstanding assumptions about arbitration.
The agency found that once blocked from suing, few people went to arbitration at all. And the results for those who did were dismal. During the two-year period studied, only 78 arbitration claims resulted in judgments in favor of consumers, who got $400,000 in total relief.
- Larrikin 9y agoThe normal system is that these civil disputes are done in a court of law. Justify the change.
- rhizome 9y agoThe siren call of tort-reform by any other name...
- pmyteh 9y agoPer the article: "During the two-year period studied, only 78 arbitration claims resulted in judgments in favor of consumers, who got $400,000 in total relief." It's not clear what the denominator on that sum is, though it is also stated that the rate of customers taking up arbitration was very low
- ensignavenger 9y agoDid the study compare those outcomes to outcomes when taken to trial?
- emodendroket 9y agoYou've found the data, but it's not surprising at all given the circumstances -- the arbiters are chosen by the company, so they know where their bread is buttered. What's more, class-action suits are just impossible under forced arbitration and who's going to go through a long process that will cost thousands because they got ripped off for a hundred bucks?
- lostdog 9y agoArbitration is also secret, so it's very difficult to gather data about its results.