5 ms·

I've seen at least one comment arguing that the plaintiffs would be better off with a true legal trial, than with arbitration. But is that necessarily true? I

I've seen at least one comment arguing that the plaintiffs would be better off with a true legal trial, than with arbitration. But is that necessarily true? IIUC, class-action participants typically get screwed over because the class attorneys negotiate a settlement that optimizes their profit. Is arbitration subject to the same problem?

bombcar 3y ago
The common consensus is that arbitration is biased toward the company. I am not sure this is actually true, but if the arbiter is not company favorable they'd probably find a new arbiter. However, it is probably biased toward saving the company money, which may actually involve giving small settlements relatively often. What has been discovered is that you can basically DDoS the arbitration system because they cannot move to make it a class action lawsuit (a class action suit is almost always better for the defendant - assuming they did actually do the bad thing - because it is one and done, and once done nobody else can bring the same lawsuit unless they explicitly opted out of the class).
- CoastalCoder 3y ago
  > What has been discovered is that you can basically DDoS the arbitration system because they cannot move to make it a class action lawsuit Perhaps in the past, but it looks like the article reaches a different conclusion. (See the "Rule 6" part, at the very bottom of the article.)
  - sowbug 3y ago
    Coordinated discovery would still be within the arbitration process.
- ChrisMarshallNY 3y ago
  Given Twitter's ... pithy ... relationship with invoicers, I don't know if the arbitration firm would want to have them as a continuing client.
hiddencost 3y ago
Lawyers still get paid in arbitration, too. For most class actions that involve small payoffs you're right. But this is a relatively small class, so it would be much harder to push through a specious settlement.
HWR_14 3y ago
I don't think you understand correctly. Yes, most of the money gets eaten up by the legal team, but a judge has to sign off on it. Class action lawsuits just seem like they are very expensive. But without the ability to split the lawyer fees among the entire group suing, it's unlikely they would get anything, because each case cannot support its own legal fees, let alone any recovery.
DSMan195276 3y ago
> But is that necessarily true? IIUC, class-action participants typically get screwed over because the class attorneys negotiate a settlement that optimizes their profit. The thing with class-action lawsuits is that commonly the members haven't individually suffered a significant amount of harm - it's small enough that class-members could never justify suing on their own. With a class-action lawsuit the members aren't going to get any more than they would otherwise, it just makes it cheap enough to justifying suing at all - and by doing that, gives an avenue to ensure companies can't just get away with that kind of thing for free.
x86x87 3y ago
You normally can opt out of the class action lawsuit and pursuit yourself. I see zero reason why these people would not want to opt out.
toast0 3y ago
> class-action participants typically get screwed over because the class attorneys negotiate a settlement that optimizes their profit. It usually depends on the class size and the magnitude and specificity of damages. When the class size is most of the US and the damages were maybe somewhat higher prices due to price fixing, class members don't get much. When the class size is employees of one or a handful of companies and the damages are meaningful (significant unpaid compensation, reduced compensation because of illegal agreements, etc), a class action is likely to get a settlement that's reasonable for the members. Maybe you could do better on your own, maybe not, but there's less risk of not getting any compensation.

bombcar 3y ago

The common consensus is that arbitration is biased toward the company. I am not sure this is actually true, but if the arbiter is not company favorable they'd probably find a new arbiter. However, it is probably biased toward saving the company money, which may actually involve giving small settlements relatively often. What has been discovered is that you can basically DDoS the arbitration system because they cannot move to make it a class action lawsuit (a class action suit is almost always better for the defendant - assuming they did actually do the bad thing - because it is one and done, and once done nobody else can bring the same lawsuit unless they explicitly opted out of the class).

CoastalCoder 3y ago
> What has been discovered is that you can basically DDoS the arbitration system because they cannot move to make it a class action lawsuit Perhaps in the past, but it looks like the article reaches a different conclusion. (See the "Rule 6" part, at the very bottom of the article.)
- sowbug 3y ago
  Coordinated discovery would still be within the arbitration process.
ChrisMarshallNY 3y ago
Given Twitter's ... pithy ... relationship with invoicers, I don't know if the arbitration firm would want to have them as a continuing client.

hiddencost 3y ago

Lawyers still get paid in arbitration, too. For most class actions that involve small payoffs you're right. But this is a relatively small class, so it would be much harder to push through a specious settlement.

HWR_14 3y ago

I don't think you understand correctly. Yes, most of the money gets eaten up by the legal team, but a judge has to sign off on it. Class action lawsuits just seem like they are very expensive. But without the ability to split the lawyer fees among the entire group suing, it's unlikely they would get anything, because each case cannot support its own legal fees, let alone any recovery.

DSMan195276 3y ago

> But is that necessarily true? IIUC, class-action participants typically get screwed over because the class attorneys negotiate a settlement that optimizes their profit. The thing with class-action lawsuits is that commonly the members haven't individually suffered a significant amount of harm - it's small enough that class-members could never justify suing on their own. With a class-action lawsuit the members aren't going to get any more than they would otherwise, it just makes it cheap enough to justifying suing at all - and by doing that, gives an avenue to ensure companies can't just get away with that kind of thing for free.

x86x87 3y ago

You normally can opt out of the class action lawsuit and pursuit yourself. I see zero reason why these people would not want to opt out.

toast0 3y ago

> class-action participants typically get screwed over because the class attorneys negotiate a settlement that optimizes their profit. It usually depends on the class size and the magnitude and specificity of damages. When the class size is most of the US and the damages were maybe somewhat higher prices due to price fixing, class members don't get much. When the class size is employees of one or a handful of companies and the damages are meaningful (significant unpaid compensation, reduced compensation because of illegal agreements, etc), a class action is likely to get a settlement that's reasonable for the members. Maybe you could do better on your own, maybe not, but there's less risk of not getting any compensation.