5 ms·

> So let’s say your claim is $2,000. Under those laws, maybe you can “treble” (triple) your damages if you win. So now your best day is $6,000. And the company

> So let’s say your claim is $2,000. Under those laws, maybe you can “treble” (triple) your damages if you win. So now your best day is $6,000. And the company knows it. This is one of the most eye opening things I've read on here. I didn't know that about arbitration. When you threaten/enter into arbitration, it should be part of the law that the company must respond with the maximum amount of damage they're liable for. Anything else is information asymmetry towards the company and they know that too.

thathndude 4y ago
I like this suggestion. There is a substantial lack of attorneys in this area. If we are going to force consumers into these systems, they need to be designed more fairly.
- maccard 4y ago
  Think of it like a mortgage - I got a 90 page legal document when I purchased my home (and I received multiple physical copies of it....) but on the first page of it was "here's how much you're borrowing, here's how much you will repay over the lifetime, and here's the fees if you pay it back early", and I had to sign that page individually with the rest of the agreement. It felt a bit silly, but it _forces_ the service provider to give you this information in an honest format, and not bury it in the small print 5 levels of indirection deep.
  - thathndude 4y ago
    And the only reason you get that information is because of federal consumer protection laws. If nothing else, an experienced consumer protection attorney brings that to the table—knowledge of these various laws (and how you can sue under them) that you might not even know exists.
    - toolz 4y ago
      I think that point is about as fair as saying the only reason it got so complicated in the first place is because of federal consumer protection laws that enable banks/lenders to get away with such complex agreements to begin with. Otherwise you'd have competition that exists solely to correct the complexity of our current financial system.
      - thawaya3113 4y ago
        No it isn’t. Because we had centuries of no consumer protection. And there were no competitive pressures to simplify agreements. Consumer protection laws that forced companies to simplify agreements were a response to the massive increase in complexity without such laws being on the books. But there’s an even easier, non historical, way to see how “competition” does nothing to solve the problem of complexity in agreements. The agreements to rent an apartment, or to buy a house, both of which are among the most complicated agreements the majority of people will sign, are far more straightforward in most states than buying a $2 song off iTunes or signing up for a 1 month membership off Spotify. There is a lot of evidence that consumer protection laws have had massive effects in making the agreements more standardized and transparent and reducing shady and fraudulent behavior.
        thathndude 4y ago
        It's worth noting that a lot of consumer protection laws are 50 years (or less) old. Many were born from the great recession less than 15 years ago. To your point, this is all pretty fresh stuff, and I think there will be more regulations in other areas. The regulations started with housing/mortgage agreements because they are such large transactions. But the same principles will hopefully trickle down.
        throwaway0a5e 4y ago
        >Because we had centuries of no consumer protection. And there were no competitive pressures to simplify agreements. And we also had centuries of really simple (by 2022 standards) contract terms. Even if you just include the time after mass-literacy contracts didn't start adding tons of length until fairly recently. I'm not sure when exactly the proliferation of additional clauses in otherwise pretty simple contracts started but I read a homeowner's insurance policy from the 1930s and it fit on one page. Edit: Why is this opinion so unwelcome here?
pjc50 4y ago
Problem: this number may well be unlimited. There are two types of damages, actual and punitive, and for actual damages you set the value of the claim by .. adding up all the damage caused. This is how you can get really big numbers like $145bn. https://www.ncbi.nlm.nih.gov/pmc/articles/PMC1118202/ https://www.ncbi.nlm.nih.gov/pmc/articles/PMC1118202/ (That size of damages terrified various other companies with liability problems, who quickly got the law changed to minimize the range of things they could potentially be held liable for as a result of their products: https://en.wikipedia.org/wiki/Protection_of_Lawful_Commerce_in_Arms_Act https://en.wikipedia.org/wiki/Protection_of_Lawful_Commerce_... )
- ProjectArcturis 4y ago
  Arbitration rarely results in punitive damages or enormous payouts. That is the exact reason why companies put arbitration into their contracts.
  - mjmahone17 4y ago
    The flip side is it prevents aggregating all damages into a single class claim. If everyone who had a claim actually arbitrated every time, it would be much more expensive for companies to handle than settling an entire class of claims all at once. The problem is companies know most people will not make a claim if it takes them any significant effort, and if the reward amount won’t be very large.
    - paulgb 4y ago
      It becomes especially awkward when those companies have their bluff called, get an onslaught of arbitration claims, and then try to backpedal into a class action. “We were just using an anti-class action language because we thought that would scare away litigation but now we want it” is not a super compelling story to have to tell a fair judge. This happened to Intuit. Couldn't have happened to a nicer group of people /s. https://www.reuters.com/article/legal-us-otc-intuit/l-a-santa-clara-oppose-proposed-40-million-turbo-tax-class-deal-idUSKBN28C3BH https://www.reuters.com/article/legal-us-otc-intuit/l-a-sant...

thathndude 4y ago

I like this suggestion. There is a substantial lack of attorneys in this area. If we are going to force consumers into these systems, they need to be designed more fairly.

maccard 4y ago
Think of it like a mortgage - I got a 90 page legal document when I purchased my home (and I received multiple physical copies of it....) but on the first page of it was "here's how much you're borrowing, here's how much you will repay over the lifetime, and here's the fees if you pay it back early", and I had to sign that page individually with the rest of the agreement. It felt a bit silly, but it _forces_ the service provider to give you this information in an honest format, and not bury it in the small print 5 levels of indirection deep.
- thathndude 4y ago
  And the only reason you get that information is because of federal consumer protection laws. If nothing else, an experienced consumer protection attorney brings that to the table—knowledge of these various laws (and how you can sue under them) that you might not even know exists.
  - toolz 4y ago
    I think that point is about as fair as saying the only reason it got so complicated in the first place is because of federal consumer protection laws that enable banks/lenders to get away with such complex agreements to begin with. Otherwise you'd have competition that exists solely to correct the complexity of our current financial system.
    - thawaya3113 4y ago
      No it isn’t. Because we had centuries of no consumer protection. And there were no competitive pressures to simplify agreements. Consumer protection laws that forced companies to simplify agreements were a response to the massive increase in complexity without such laws being on the books. But there’s an even easier, non historical, way to see how “competition” does nothing to solve the problem of complexity in agreements. The agreements to rent an apartment, or to buy a house, both of which are among the most complicated agreements the majority of people will sign, are far more straightforward in most states than buying a $2 song off iTunes or signing up for a 1 month membership off Spotify. There is a lot of evidence that consumer protection laws have had massive effects in making the agreements more standardized and transparent and reducing shady and fraudulent behavior.
      - thathndude 4y ago
        It's worth noting that a lot of consumer protection laws are 50 years (or less) old. Many were born from the great recession less than 15 years ago. To your point, this is all pretty fresh stuff, and I think there will be more regulations in other areas. The regulations started with housing/mortgage agreements because they are such large transactions. But the same principles will hopefully trickle down.
      - throwaway0a5e 4y ago
        >Because we had centuries of no consumer protection. And there were no competitive pressures to simplify agreements. And we also had centuries of really simple (by 2022 standards) contract terms. Even if you just include the time after mass-literacy contracts didn't start adding tons of length until fairly recently. I'm not sure when exactly the proliferation of additional clauses in otherwise pretty simple contracts started but I read a homeowner's insurance policy from the 1930s and it fit on one page. Edit: Why is this opinion so unwelcome here?

pjc50 4y ago

Problem: this number may well be unlimited. There are two types of damages, actual and punitive, and for actual damages you set the value of the claim by .. adding up all the damage caused. This is how you can get really big numbers like $145bn. https://www.ncbi.nlm.nih.gov/pmc/articles/PMC1118202/ https://www.ncbi.nlm.nih.gov/pmc/articles/PMC1118202/ (That size of damages terrified various other companies with liability problems, who quickly got the law changed to minimize the range of things they could potentially be held liable for as a result of their products: https://en.wikipedia.org/wiki/Protection_of_Lawful_Commerce_in_Arms_Act https://en.wikipedia.org/wiki/Protection_of_Lawful_Commerce_... )

ProjectArcturis 4y ago
Arbitration rarely results in punitive damages or enormous payouts. That is the exact reason why companies put arbitration into their contracts.
- mjmahone17 4y ago
  The flip side is it prevents aggregating all damages into a single class claim. If everyone who had a claim actually arbitrated every time, it would be much more expensive for companies to handle than settling an entire class of claims all at once. The problem is companies know most people will not make a claim if it takes them any significant effort, and if the reward amount won’t be very large.
  - paulgb 4y ago
    It becomes especially awkward when those companies have their bluff called, get an onslaught of arbitration claims, and then try to backpedal into a class action. “We were just using an anti-class action language because we thought that would scare away litigation but now we want it” is not a super compelling story to have to tell a fair judge. This happened to Intuit. Couldn't have happened to a nicer group of people /s. https://www.reuters.com/article/legal-us-otc-intuit/l-a-santa-clara-oppose-proposed-40-million-turbo-tax-class-deal-idUSKBN28C3BH https://www.reuters.com/article/legal-us-otc-intuit/l-a-sant...