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The article mentions 6,000 arbitration cases against DoorDash amounted to $9 million in fees from the American Arbitration Association. That's $1,500 a pop! If

The article mentions 6,000 arbitration cases against DoorDash amounted to $9 million in fees from the American Arbitration Association. That's $1,500 a pop! If you have a dispute with a company, and are bound by an arbitration clause, it seems like you have a $1,500 hammer to hit them with? (Assuming your agreement states that the company will front the fees). What happens if the arbitrator decides the case against you? Do you owe that fee? Does this vary from one contract to another?

jdmichal 7y ago
> Assuming your agreement states that the company will front the fees. I'm not entirely sure they can agree to not front the fees without also potentially voiding arbitration. While money does mean a lot in court, there's a very strong sentiment that it should not be a barrier to entry. There's at least one case that went to appears where, when the plaintiff ran out of money and arbitration was canceled, the case was permitted into court: https://cdn.ca9.uscourts.gov/datastore/opinions/2016/06/15/13-56624.pdf https://cdn.ca9.uscourts.gov/datastore/opinions/2016/06/15/1...
- gamblor956 7y ago
  The arbitration clause is for the company's protection, therefore the arbitration fees are their burden. If they breach the arbitration clause by not paying for arbitration in a timely manner, the plaintiff is entitled to go to court in the 9th and 10th Circuits.
  - comex 7y ago
    But what if the arbitration clause says the plaintiff will pay? I believe that's what the parent comment was talking about.
    - arbitraryacct 7y ago
      Not allowed
    - gamblor956 7y ago
      An arbitration clause can't force the plaintiff to pay because it's in the contract for the benefit of the defendant. There's no "consideration" provided to make the plaintiff give up the right to pursue legal action in a normal court of law.
      - comex 7y ago
        It's not necessary for each individual clause of a contract to have consideration for both sides, only for the contract as a whole to have it. The consideration is that you get to use the service in question.
caseysoftware 7y ago
This is one of the tradeoffs of forcing arbitration. If you take away my ability to file suit, you pick up more of the fees. When I did it last year, filing as a plaintiff was a flat $250. Getting pissed off people to come up with $250 may be a challenge but not impossible. * I'm not sure if you could pull a Thiel/Hulk Hogan thing to bankroll an arbitration swarm but if so, this could definitely get ugly for companies that misbehave.
- arbitraryacct 7y ago
  "this could definitely get ugly for companies that misbehave" It doesn't just have to be companies that misbehave. If you don't like your competitor, maybe you'll sponsor that $250 per user to allow their userbase to throw arbitrations at them. You can burn your competitor down at a ratio of at least 1:5 if you do something like this. If you take some fees for every case you win or that ends up settling, the ratio will be far better than 1:5 The arbitration system as it stands is a tool that allows anyone with enough money and intention to smite any company by pulling together unhappy users and paying arbitration fees for them.
  - C4stor 7y ago
    If only companies had a way to escape the arbitration system... oh wait, they self select this system even though there's nothing forcing them to ! Arbitration is a tool, but it's totally unfair to say it's used by anyone else than the company choosing it.
jerzyt 7y ago
Does that mean that someone is getting $1500 because their pizza arrived cold? I hope not.
- fapjacks 7y ago
  Wouldn't that be nice? If the only thing DoorDash did wrong was deliver cold pizza?
- Nextgrid 7y ago
  If the service’s promise is to deliver warm pizza and they fail without compensating the customer (as these delivery services often do, essentially saying “tough luck” with fake, canned apologies and hoping you don’t bother doing a chargeback) then I don’t see why the customer shouldn’t be getting $1500.
  - arbitraryacct 7y ago
    The $1500 doesn't go to the customers, it goes to the courts. It's effectively a fine that a customer can arbitrarily impose on a company.
    - Nextgrid 7y ago
      But the customer has to pay it back if the lose the lawsuit, correct? If so then it’s absolutely fair.
balls187 7y ago
> What happens if the arbitrator decides the case against you? Do you owe that fee? Does this vary from one contract to another? They can award fees, yes. Usually depends on a myriad of factors, much the same as the court uses when determining sanctions and fees.
gnicholas 7y ago
> That's $1,500 a pop! Some arbitrators make over $1,000 per hour.
thaumasiotes 7y ago
> (Assuming your agreement states that the company will front the fees). The agreement specifies the arbitrator you use. In this case, the fees are set by the arbitration company, not by any contract between the parties to the dispute. It's not a matter of "who picks up the fees"; there's one fee for the company and a different, much smaller fee for the complainant. (Of course you could have a contract specify that one or the other party was responsible for the other's arbitration costs, but that's not happening here and seems unlikely in other areas.)
arbitraryacct 7y ago
Yes, when you file an arbitration against a company, regardless of how legitimate your filing is or how likely it is to be thrown out of court, that company is out at least $1000. If you wanted, you could pull together 10,000 HN users to file arbitrations, and HN is going to be hit with a $10M hammer regardless of whether there is any legitimacy to the claims. I believe the amount varies state to state, but is generally over $1000

jdmichal 7y ago

> Assuming your agreement states that the company will front the fees. I'm not entirely sure they can agree to not front the fees without also potentially voiding arbitration. While money does mean a lot in court, there's a very strong sentiment that it should not be a barrier to entry. There's at least one case that went to appears where, when the plaintiff ran out of money and arbitration was canceled, the case was permitted into court: https://cdn.ca9.uscourts.gov/datastore/opinions/2016/06/15/13-56624.pdf https://cdn.ca9.uscourts.gov/datastore/opinions/2016/06/15/1...

gamblor956 7y ago
The arbitration clause is for the company's protection, therefore the arbitration fees are their burden. If they breach the arbitration clause by not paying for arbitration in a timely manner, the plaintiff is entitled to go to court in the 9th and 10th Circuits.
- comex 7y ago
  But what if the arbitration clause says the plaintiff will pay? I believe that's what the parent comment was talking about.
  - arbitraryacct 7y ago
    Not allowed
  - gamblor956 7y ago
    An arbitration clause can't force the plaintiff to pay because it's in the contract for the benefit of the defendant. There's no "consideration" provided to make the plaintiff give up the right to pursue legal action in a normal court of law.
    - comex 7y ago
      It's not necessary for each individual clause of a contract to have consideration for both sides, only for the contract as a whole to have it. The consideration is that you get to use the service in question.

caseysoftware 7y ago

This is one of the tradeoffs of forcing arbitration. If you take away my ability to file suit, you pick up more of the fees. When I did it last year, filing as a plaintiff was a flat $250. Getting pissed off people to come up with $250 may be a challenge but not impossible. * I'm not sure if you could pull a Thiel/Hulk Hogan thing to bankroll an arbitration swarm but if so, this could definitely get ugly for companies that misbehave.

arbitraryacct 7y ago
"this could definitely get ugly for companies that misbehave" It doesn't just have to be companies that misbehave. If you don't like your competitor, maybe you'll sponsor that $250 per user to allow their userbase to throw arbitrations at them. You can burn your competitor down at a ratio of at least 1:5 if you do something like this. If you take some fees for every case you win or that ends up settling, the ratio will be far better than 1:5 The arbitration system as it stands is a tool that allows anyone with enough money and intention to smite any company by pulling together unhappy users and paying arbitration fees for them.
- C4stor 7y ago
  If only companies had a way to escape the arbitration system... oh wait, they self select this system even though there's nothing forcing them to ! Arbitration is a tool, but it's totally unfair to say it's used by anyone else than the company choosing it.

jerzyt 7y ago

Does that mean that someone is getting $1500 because their pizza arrived cold? I hope not.

fapjacks 7y ago
Wouldn't that be nice? If the only thing DoorDash did wrong was deliver cold pizza?
Nextgrid 7y ago
If the service’s promise is to deliver warm pizza and they fail without compensating the customer (as these delivery services often do, essentially saying “tough luck” with fake, canned apologies and hoping you don’t bother doing a chargeback) then I don’t see why the customer shouldn’t be getting $1500.
- arbitraryacct 7y ago
  The $1500 doesn't go to the customers, it goes to the courts. It's effectively a fine that a customer can arbitrarily impose on a company.
  - Nextgrid 7y ago
    But the customer has to pay it back if the lose the lawsuit, correct? If so then it’s absolutely fair.

balls187 7y ago

> What happens if the arbitrator decides the case against you? Do you owe that fee? Does this vary from one contract to another? They can award fees, yes. Usually depends on a myriad of factors, much the same as the court uses when determining sanctions and fees.

gnicholas 7y ago

> That's $1,500 a pop! Some arbitrators make over $1,000 per hour.

thaumasiotes 7y ago

> (Assuming your agreement states that the company will front the fees). The agreement specifies the arbitrator you use. In this case, the fees are set by the arbitration company, not by any contract between the parties to the dispute. It's not a matter of "who picks up the fees"; there's one fee for the company and a different, much smaller fee for the complainant. (Of course you could have a contract specify that one or the other party was responsible for the other's arbitration costs, but that's not happening here and seems unlikely in other areas.)

arbitraryacct 7y ago

Yes, when you file an arbitration against a company, regardless of how legitimate your filing is or how likely it is to be thrown out of court, that company is out at least $1000. If you wanted, you could pull together 10,000 HN users to file arbitrations, and HN is going to be hit with a $10M hammer regardless of whether there is any legitimacy to the claims. I believe the amount varies state to state, but is generally over $1000