4 ms·

Arbitration clauses are usually in everyone's favor because it dramatically reduces the cost of dispute resolution. The only downside is they prevent class act

Arbitration clauses are usually in everyone's favor because it dramatically reduces the cost of dispute resolution. The only downside is they prevent class action suites. In a b2b contract that usually isn't a consideration and so arbitration is a benefit - it would be foolish to try and remove it.

lovich 8y ago
Arbitration clauses are explicitly not in everyone's favor and that is the sort of incorrect information companies like to spread around. Frequently the company is the one picking the arbitrator, which I hope has obvious problems with them being unbiased. Even in cases where the arbitrator is a "neutral" party that both sides have to agree to, the companies are the ones bringing in the lion's share of work to the arbitrators and they are not going to agree to an arbitrator who rules against them in any significant quantities
- hcurtiss 8y ago
  This presumes the company is frequently in arbitration. That is not frequently the case. With few exceptions, most companies want to (and do) avoid these kinds of disputes. My critique of arbitration is that, under AAA rules, it's not actually much cheaper than just going to court. The only real advantage is that it cuts off appeals, but that cuts both ways. These days I find clients are relatively ambivalent about whether to include arbitration in B2B contracts.
  - lovich 8y ago
    The company is going to be frequently in arbitration compared to the employees because they have an agreement with every employee and the employees only have an agreement with the company. Even in your statement here, there's evidence that the arbitration agreements are only in place because the companies can force it. B2B contracts usually have _actual_ negotiation involved instead of a take it or leave type of deal. Now that they can't force the agreements they are ambivalent about whether they are included. If the arbitration agreements don't survive in contacts when both parties are on roughly equal footing and only show up when one party is much weaker, doesn't that imply that they are abusive?
jjoonathan 8y ago
In a b2b context where actual negotiation happened, sure. In every other context... > it dramatically reduces the cost of dispute resolution ... by being rigged in favor of the party setting it up.
dd36 8y ago
You know what the lowest cost of resolving a dispute is: zero. When someone files a class action that causes a business to stop some illegal behavior, I get protected and it costs me nothing. I may even receive a small check. Nobody benefits from a zero accountability environment long-term.

lovich 8y ago

Arbitration clauses are explicitly not in everyone's favor and that is the sort of incorrect information companies like to spread around. Frequently the company is the one picking the arbitrator, which I hope has obvious problems with them being unbiased. Even in cases where the arbitrator is a "neutral" party that both sides have to agree to, the companies are the ones bringing in the lion's share of work to the arbitrators and they are not going to agree to an arbitrator who rules against them in any significant quantities

hcurtiss 8y ago
This presumes the company is frequently in arbitration. That is not frequently the case. With few exceptions, most companies want to (and do) avoid these kinds of disputes. My critique of arbitration is that, under AAA rules, it's not actually much cheaper than just going to court. The only real advantage is that it cuts off appeals, but that cuts both ways. These days I find clients are relatively ambivalent about whether to include arbitration in B2B contracts.
- lovich 8y ago
  The company is going to be frequently in arbitration compared to the employees because they have an agreement with every employee and the employees only have an agreement with the company. Even in your statement here, there's evidence that the arbitration agreements are only in place because the companies can force it. B2B contracts usually have _actual_ negotiation involved instead of a take it or leave type of deal. Now that they can't force the agreements they are ambivalent about whether they are included. If the arbitration agreements don't survive in contacts when both parties are on roughly equal footing and only show up when one party is much weaker, doesn't that imply that they are abusive?

jjoonathan 8y ago

In a b2b context where actual negotiation happened, sure. In every other context... > it dramatically reduces the cost of dispute resolution ... by being rigged in favor of the party setting it up.

dd36 8y ago

You know what the lowest cost of resolving a dispute is: zero. When someone files a class action that causes a business to stop some illegal behavior, I get protected and it costs me nothing. I may even receive a small check. Nobody benefits from a zero accountability environment long-term.