3 ms·

You have to be joking if you don't think arbitration is a massive gift to moneyed interests. Why are they all cramming it down everyone's throat if not?

senectus1 4y ago
not saying i disagree, but arbitration free's up court time.
- emodendroket 4y ago
  That's hardly the concern of companies sticking mandatory arbitration agreements everywhere though.
danpalmer 4y ago
This depends on the arbitration. An example of pro-consumer arbitration is the Tenancy Deposit Scheme in the UK. All tenancy deposits must be either stored with the UK-wide scheme, or at least insured by the scheme (at the landlord's expense). This is a non-governmental body, but use of it is mandated by legislation. When it comes time to get your deposit back, if the landlord decides to keep some, the tenant can challenge that, and what happens is essentially just arbitration. It doesn't go to court, it's decided by the TDS. The benefits are that the whole process is designed around deposit resolution, so it's much more streamlined than going to court. Also it doesn't require any outlay by either side to initiate a challenge, so it's effectively free. Both of these are much better for tenants and indeed for many landlords than navigating a costly court process. The TDS happens to be considered very pro-tenant, but ultimately this is just perception. I strongly suspect that the only reason it is considered so is because landlords tend to over-state damage or attempt to keep deposits for unreasonable things, and therefore the TDS ends up siding with the tenants more (I've heard ~80% anecdotally). Is there any difference here? I guess it's government mandated and funded by mandated fees, rather than needing to appeal to or sell to companies, and therefore the incentive structure is better?
- emodendroket 4y ago
  That seems more like a government agency whereas arbitration is usually a privately-run system and, yes, the incentive structures are bad because often the company is paying for it. It also negates the possibility of class-action suits, which are the only reasonable way anyone can get slapped for small harms to many people.
  - danpalmer 4y ago
    In this case the TDS is a private, for-profit company. They are also paid for by landlords. The difference is that the government requires that landlords use them, they don't have a choice, and I believe TDS is under contract from the govt so is incentivised to effectively implement the legislation, not to pander to landlords. > It also negates the possibility of class-action suits, which are the only reasonable way anyone can get slapped for small harms to many people. If the arbitration is effective then this would be unnecessary though. I'm not saying that arbitration is always, or even often good, but I don't think it's by-definition a bad idea, and I think TDS is a great example of where it can be quite pro-consumer. Another pro-consumer idea is small-claims courts. They typically have a small fixed fee, explicitly don't require a lawyer for the claimant and have processes designed to be manageable by non-lawyers, and usually claim back the fee if the claimant wins. This would also make class-action lawsuits unnecessary. Stepping back a bit... I think this might all be being viewed from a US-focused lens where class-action suits are the only option, small claims courts are less effective, and arbitration is near universally poorly implemented. This isn't how it needs to be though, and many countries make these concepts work fine and don't need to rely on things like class-action lawsuits (I'm not even sure we have them in the UK).
    - emodendroket 4y ago
      I'm less familiar with other countries' systems, of course, but, for instance, if I get ripped off for $15, it's hardly worth even taking a day off of work to go pursue that. But ripping off tens of thousands of people for $15 is hugely profitable, so there's a benefit to class action in that sense. I'm not sure how other countries approach that problem but would-be reformers here generally just want to make each person have to waste their time.
nevdka 4y ago
Being capable of spending millions on lawyers doesn't mean a rich company wants to spend millions on lawyers. In many (if not most) cases, loosing at a fair arbitration would be cheaper for the company than winning in court by outspending on lawyers. Of course, there's also the 'stopping class actions' thing.
- emodendroket 4y ago
  Sure, but winning at an unfair arbitration, or discouraging the plaintiff from even pursuing the claim because of the greater barriers and penalties for failure, is even cheaper.
HDThoreaun 4y ago
Arbitration involves less lawyers and therefore less legal fees.
- emodendroket 4y ago
  Yeah, so would a guy just breaking your legs every time you tried to make a complaint.
  - singleshot_ 4y ago
    Ok, but there’s a set of laws called the federal arbitration act and everyone agreed to it. There isn’t a federal guy-breaking-your-legs act because that would not be a good idea.
    - emodendroket 4y ago
      The situations in which employers, credit card issuers, and more entities you are more or less obliged to deal with can impose mandatory arbitration on you have been dramatically expanded by the Supreme Court in recent years in ways I don’t think we “all agreed to.”
      - singleshot_ 4y ago
        Surely you agreed to it more than you agreed to getting your legs broken, right? I mean you still live here, and you voluntarily enter into contracts with arbitration agreements. I guess I can avoid the shorthand and say we all agreed except for monastic hermits and people who fled the country in search of the land of milk, honey, and unlimited jury trials.
        emodendroket 4y ago
        I don't consider myself to have agreed to a bunch of unpopular decisions shoved down our collective throats by unelected bureaucrats for life just because I didn't flee the country, but if you do then I guess there's not much to talk about.

senectus1 4y ago

not saying i disagree, but arbitration free's up court time.

emodendroket 4y ago
That's hardly the concern of companies sticking mandatory arbitration agreements everywhere though.

danpalmer 4y ago

This depends on the arbitration. An example of pro-consumer arbitration is the Tenancy Deposit Scheme in the UK. All tenancy deposits must be either stored with the UK-wide scheme, or at least insured by the scheme (at the landlord's expense). This is a non-governmental body, but use of it is mandated by legislation. When it comes time to get your deposit back, if the landlord decides to keep some, the tenant can challenge that, and what happens is essentially just arbitration. It doesn't go to court, it's decided by the TDS. The benefits are that the whole process is designed around deposit resolution, so it's much more streamlined than going to court. Also it doesn't require any outlay by either side to initiate a challenge, so it's effectively free. Both of these are much better for tenants and indeed for many landlords than navigating a costly court process. The TDS happens to be considered very pro-tenant, but ultimately this is just perception. I strongly suspect that the only reason it is considered so is because landlords tend to over-state damage or attempt to keep deposits for unreasonable things, and therefore the TDS ends up siding with the tenants more (I've heard ~80% anecdotally). Is there any difference here? I guess it's government mandated and funded by mandated fees, rather than needing to appeal to or sell to companies, and therefore the incentive structure is better?

emodendroket 4y ago
That seems more like a government agency whereas arbitration is usually a privately-run system and, yes, the incentive structures are bad because often the company is paying for it. It also negates the possibility of class-action suits, which are the only reasonable way anyone can get slapped for small harms to many people.
- danpalmer 4y ago
  In this case the TDS is a private, for-profit company. They are also paid for by landlords. The difference is that the government requires that landlords use them, they don't have a choice, and I believe TDS is under contract from the govt so is incentivised to effectively implement the legislation, not to pander to landlords. > It also negates the possibility of class-action suits, which are the only reasonable way anyone can get slapped for small harms to many people. If the arbitration is effective then this would be unnecessary though. I'm not saying that arbitration is always, or even often good, but I don't think it's by-definition a bad idea, and I think TDS is a great example of where it can be quite pro-consumer. Another pro-consumer idea is small-claims courts. They typically have a small fixed fee, explicitly don't require a lawyer for the claimant and have processes designed to be manageable by non-lawyers, and usually claim back the fee if the claimant wins. This would also make class-action lawsuits unnecessary. Stepping back a bit... I think this might all be being viewed from a US-focused lens where class-action suits are the only option, small claims courts are less effective, and arbitration is near universally poorly implemented. This isn't how it needs to be though, and many countries make these concepts work fine and don't need to rely on things like class-action lawsuits (I'm not even sure we have them in the UK).
  - emodendroket 4y ago
    I'm less familiar with other countries' systems, of course, but, for instance, if I get ripped off for $15, it's hardly worth even taking a day off of work to go pursue that. But ripping off tens of thousands of people for $15 is hugely profitable, so there's a benefit to class action in that sense. I'm not sure how other countries approach that problem but would-be reformers here generally just want to make each person have to waste their time.

nevdka 4y ago

Being capable of spending millions on lawyers doesn't mean a rich company wants to spend millions on lawyers. In many (if not most) cases, loosing at a fair arbitration would be cheaper for the company than winning in court by outspending on lawyers. Of course, there's also the 'stopping class actions' thing.

emodendroket 4y ago
Sure, but winning at an unfair arbitration, or discouraging the plaintiff from even pursuing the claim because of the greater barriers and penalties for failure, is even cheaper.

HDThoreaun 4y ago

Arbitration involves less lawyers and therefore less legal fees.

emodendroket 4y ago
Yeah, so would a guy just breaking your legs every time you tried to make a complaint.
- singleshot_ 4y ago
  Ok, but there’s a set of laws called the federal arbitration act and everyone agreed to it. There isn’t a federal guy-breaking-your-legs act because that would not be a good idea.
  - emodendroket 4y ago
    The situations in which employers, credit card issuers, and more entities you are more or less obliged to deal with can impose mandatory arbitration on you have been dramatically expanded by the Supreme Court in recent years in ways I don’t think we “all agreed to.”
    - singleshot_ 4y ago
      Surely you agreed to it more than you agreed to getting your legs broken, right? I mean you still live here, and you voluntarily enter into contracts with arbitration agreements. I guess I can avoid the shorthand and say we all agreed except for monastic hermits and people who fled the country in search of the land of milk, honey, and unlimited jury trials.
      - emodendroket 4y ago
        I don't consider myself to have agreed to a bunch of unpopular decisions shoved down our collective throats by unelected bureaucrats for life just because I didn't flee the country, but if you do then I guess there's not much to talk about.