11 ms·

Why the binding arbitration game is rigged against customers (2019)

93 points by dakial1 3y ago

whelp_24 3y ago
I still don't understand how this can be legal in the first place.
- giancarlostoro 3y ago
  My thoughts exactly.
- FFP999 3y ago
  In the USA, if a hundred wealthy businesspeople want the same law passed, it gets passed.
- WillPostForFood 3y ago
  What part do you think should be illegal?
  - nerdponx 3y ago
    The part where you're bound to waiving your legal rights in order to engage in commerce with companies that you can't really avoid engaging in commerce with, unless you want to be an off-grid homesteader. There's nothing wrong with arbitration as a first choice to avoid court, to the benefit of both parties. There's something very wrong with binding arbitration.
  - nevinera 3y ago
    Most likely they're referring to the ability for a contract to include terms that remove your right to legal recourse.
  - munk-a 3y ago
    I don't think it should be legal to be able to surrender the ability to pursue legal action outside of very specific waivers. I'm fine with companies incentivizing arbitration but if a company is able to fully block regular legal actions (especially class action lawsuits) then that smells bad.
    - nine_k 3y ago
      But the wavers are rather specific, and in all cases I encountered, there are some exceptions for serious cases which the law does not allow to relegate to arbitration. I suppose that arbitration lowers the cost of a dispute very seriously. It makes sorting out small issues affordable and much faster. I see it as a good tradeoff as long as I don't depend on it in potentially serious cases, where hiring a lawyer would be the least of my troubles.
      - munk-a 3y ago
        Uber's[1] is usually held up as a prime example of these agreements - and reading through it the only carve out they allow seems to be for sexual assault[2]. IANAL but to my reading the only other carve out is when binding arbitration would be illegal. It also seems to preempt any ability to bring pretty much any kind of class action lawsuit. 1. https://www.uber.com/legal/en/document/?name=uber-connect-terms-and-conditions&country=united-states&lang=en https://www.uber.com/legal/en/document/?name=uber-connect-te... 2. "Notwithstanding the foregoing, where you allege claims of sexual assault or sexual harassment[...]"
    - bee_rider 3y ago
      Yes, we often look at it from a personal choice point of view: I can evaluate the contract and decide that I’d like to waive this right. But the law exists to protect everyone, and part of that is it imposes a little bit on everyone. If a basically every company insists that you waive your employee rights to work for them, then the only people with those rights are the unemployed, rendering those laws a bit moot. You gain a competitive advantage over your peers by being willing to waive your rights, in the sense that a company of course would like to not have to respect your rights. The point of employee protection laws is to take that off the table.
    - vorpalhex 3y ago
      My preference here, if I had a magical "change the world wand", would be to allow arbitration to be binding only B2B and not between a business and a consumer. A consumer should always be able to resort to the courts proper.
  - dataflow 3y ago
    > What part do you think should be illegal? The part about cutting off your counterparty's access to the justice system
  - PeterisP 3y ago
    Surrendering rights in any contract of adhesion. I'd consider it to be reasonable for a negotiated contract between two companies to include a binding arbitration clause; however, any "take-it-or-leave-it" consumer nonnegotiated contracts should be (and in some jurisdictions are) heavily restricted with respect to potentially unfair clauses, one of them being binding arbitration.
  - deleted 3y ago
    [deleted]
- deleted 3y ago
  [deleted]
- unbalancedevh 3y ago
  Laws favor the people who have enough money to influence the people who make the laws. Poor people will always be at a disadvantage.
- zeroonetwothree 3y ago
  Contracts regularly restrict the rights of the parties. For example, a NDA restricts your right to free speech. Should this right be different? Maybe, but there’s trade offs to everything. Ultimately I’d rather take the position that if you don’t like the terms of a contract you are free to not agree to it.
  - antiterra 3y ago
    Laws regularly restrict the power of contracts as well. For example, you cannot contractually give up your right to reclaim a non-work-for-hire copyright at 35 years until some period of time near that duration.
- dd36 3y ago
  It was perversion by the courts of a century old law that wasn’t made for unilateral consumer contracts. If the courts stopped reading that law so broadly, then the legislature could pass a law that allows it, if that’s indeed what was intended.
fallingknife 3y ago
I'm not really buying this informational asymmetry argument. Yes the companies will have been in more cases than the consumer, but that's not really a relevant comparison. The consumer isn't picking the arbitrator, his lawyer is, and he and his firm will have been involved in a lot of cases.
- EGreg 3y ago
  It is just like when producers aggregate into cartels like the AMA (American Medical Association) so consumers aggregate into insurance companies (eg Medicare). At the end the situation isn’t so great for people who fall through the cracks with unusual issues, but for common scenarios it’s great. The unusual issues should still have access to the ad-hoc market and usually there, producers (with all their resources and organization) have the advantage.
- RugnirViking 3y ago
  but to say it isn't happening raises a lot of questions. Why do so many firms so widely put mandatory arbritration clauses? why are pro-business arbitrators more likely to be chosen (despite, as you hypothesise, equal information)? could it be that there are simply more pro-buisness arbitrators than pro-consumer? so a random list would have too many for customer representative to strike off?
  - fallingknife 3y ago
    Arbitration is quicker and cheaper than litigation. That alone is enough to explain why they want it. There may well be bias, but merely the fact that companies want this is not evidence of it.
- nevinera 3y ago
  If on average 100% of cases involve a company that is paying for an arbitration lawyer and even 80% of cases involve an individual that is paying for an arbitration lawyer (which I _highly doubt_, though I couldn't quickly find numbers), the net result in the long term is not that "20% of individuals get a negative outcome", it's far worse. This article is talking about the net effect, which is that the fact that there _is_ asymmetry means that arbitrators have an interest in _being_ biased against the individual, which means that even if you are paying for an arbitration lawyer, they are simply ruling out the _most_ biased firms, while the corporate arbitration lawyer is ruling out the _least_ biased firms. Think natural-selection, rather than game theory.
alfl 3y ago
Cory Doctorow has pointed out [0] that binding arbitration clauses leave companies open to legal DDOS “mass arbitration” attacks that end up being very pro-customer. 0: https://pluralistic.net/2022/02/24/uber-for-arbitration/#nibbled-to-death-by-ducks https://pluralistic.net/2022/02/24/uber-for-arbitration/#nib...
- dataflow 3y ago
  Didn't companies easily start addressing that by forbidding you from doing that?
  - munk-a 3y ago
    No - it's not possible to avoid. However, arbitrators aren't robots, if claims are being filed in a clearly malicious or frivolous manner you can expect a level headed mediator to provide a remedy. In a case where one million people were legitimately harmed though, this can be absolutely disastrous for the company unless the wronged agree to waive the arbitration clause with the company and pursue something like a regular class action lawsuit. It'd still be more expensive than a regular class action lawsuit however.
    - dataflow 3y ago
      > No - it's not possible to avoid What? Just go read the PayPal one. It says very clearly you can only bring arbitration cases on an "individual basis". Which was directly in response to this issue. "Unless both you and PayPal agree otherwise, the arbitrator(s) may not consolidate or join more than one person’s or party’s claims and may not otherwise preside over any form of a consolidated, representative or class proceeding." Edit: maybe PayPal was the wrong example here - I definitely saw clauses change after the Uber court case, but it seems the PayPal one had been there longer?
      - munk-a 3y ago
        That doesn't make PayPal immune to being overwhelmed by arbitration requests, it just requires clients to file separately (which they generally should be doing anyways).
gghffguhvc 3y ago
As a protest, I’ve considered creating a browser plugin that takes the TOS and removes arbitration clause, e-signs it and PDFs it. Then posts it to the “agree” endpoint in addition to other form attributes and emails a copy to legal@BigCo. Basically automating the Dmitry Agarkov approach. https://www.huffpost.com/entry/russian-rewrites-credit-agreement-sues-bank_n_3728105 https://www.huffpost.com/entry/russian-rewrites-credit-agree...
- sschueller 3y ago
  Sadly the "agree endpoint" is usually a checkbox.
  - gghffguhvc 3y ago
    “Agree” endpoint in quotes as it is whatever form that checkbox is in.
    - sschueller 3y ago
      yes but that form will most likely not accept a PDF file that it didn't except in the first place.
      - tremon 3y ago
        It it responds with a 2xx HTTP status code, it accepted the PDF. If the accept is handled purely in client-side javascript, the other party can never prove that you accepted the terms.
        FFP999 3y ago
        Good luck with that argument in court though.
        gghffguhvc 3y ago
        The point is that it is a protest. By emailing bigcorp’s legal team will waste a small amount of their time. Especially if it “sincerely” thanks them for accepting your altered terms of service and shares some screenshots of the 200 response etc. doesn’t have to mention what was altered. Then references Dmitry Agarkov. V2 could use rocketreach to find individual lawyers at bigco and mail each individually with slightly different messages to create more confusion.
chasing 3y ago
Because why else would companies do it?
- trogdor 3y ago
  To protect their reputation. Arbitration happens privately. Court records, on the other hands, are generally public.
tptacek 3y ago
Daniel Berlin ('DannyBee), who is a lawyer (and compiler designer) and a commenter here worth following, has for years been pushing back on the C.W. that arbitration is just a way big corporations screw the little people: https://hn.algolia.com/?dateRange=all&page=0&prefix=false&query=arbitrator%20author%3ADannyBee&sort=byDate&type=comment https://hn.algolia.com/?dateRange=all&page=0&prefix=false&qu... Having been involved in actual civil litigation, a lot of this rings true. The simplest possible civil cases take years to resolve, at tremendous expense.
- munk-a 3y ago
  Arbitration is always an option if mutually agreed to between both parties though. I don't think anyone want to completely outlaw arbitration, just prevent companies from restricting customers from pursuing regular lawsuits (especially of the class action kind). Voluntary arbitration is an excellent tool in resolving a dispute as the costs are dramatically lower than a lawsuit and it is a much speedier process.
  - pauldenton 3y ago
    Voluntary Arbitrary is a lot cheaper than a traditional Divorce
  - BizarroLand 3y ago
    That's not a bad idea and pretty simple to implement, and it would save everyone a lot of hassle. "We can go to court if you want to, just know that we will spend half of what we think your case could go for if you win defending ourselves and use every tactic in our arsenal to drain your war chest until you are financially unable to continue the lawsuit, so unless you've got big bucks to burn or a darn good case and a lawyer willing to fight for you you are better off choosing an arbitrator and getting a simple and just settlement in 3 months vs 3-8 years from now even if we did wrong"
    - munk-a 3y ago
      Sorry, just to clarify, arbitration isn't a new concept or one that would need implementation - it has always been an option for any legal dispute. In fact a lot of divorces go through a mediator instead of a judge since the difference in cost is so extreme.
zeroonetwothree 3y ago
I’m not convinced this study is measuring what it claims. It seems like they identified “pro business” arbitrators as the ones that gave businesses better wins. Then they found that they gave businesses better wins? That could just be random chance. Also ultimately a 12% effect is not the end of the world. Without arbitration you are going to be paying a lawyer a ton more money so it’s not even clear it’s worse for the consumer on average.
paws 3y ago
According to Matt Stoller [0] we have Alan Kaplinsky [1] to thank. > Kaplinksy’s claim to fame is that he’s the lawyer who figured out you could get rid of the ability of a consumer to go to court by using what’s called a pre-dispute arbitration provision in a contract. I'm no expert but Kaplinsky sure sounds like a modern day super-villain. [0] https://www.thebignewsletter.com/p/ending-junk-fees-the-most-annoying#:~:text=%22I%20am%20very%20tired%20of,to%20stop%20a%20hotel%20from https://www.thebignewsletter.com/p/ending-junk-fees-the-most... [1] https://www.ballardspahr.com/People/Attorneys/K/Kaplinsky-Alan https://www.ballardspahr.com/People/Attorneys/K/Kaplinsky-Al...
WaitWaitWha 3y ago
The root cause seems to misdirected in my opinion. The article also reads like there are two issues, arbiters can be financially swayed, and contracts can force giving up rights, but the conclusion is vaguely "corporations are evil". The article suggest big companies gaming the arbitration system. Read any civil (or even criminal) court case, and both sides will do the most possible tactics to win. The disparity of expertise is not an evil behavior of the parties. Yes, individuals with fewer financial means to find lawyers in arbitration are at financial disadvantage compared to corporation, and they would be in the same, if not bigger financial bind if it was done through the court system. The notion that arbiters are beholden to corporation because of compensation is the biggest, glaring problem.
- FFP999 3y ago
  "The law, in its majestic equality, forbids rich and poor alike to sleep under bridges, to beg in the streets, and to steal their bread." --Anatole France
josh_fyi 3y ago
The points in the article seem quite obvious. I wonder then, why do arbitrators ever rule against the companies that pay their fees? I asked on Law Stack Exchange, but the answers were not quite convincing. https://law.stackexchange.com/questions/87589 https://law.stackexchange.com/questions/87589
- JumpCrisscross 3y ago
  > why do arbitrators ever rule against the companies that pay their fees? Both sides choose the arbitrator. If an individual arbitrator consistently rules against one category of claimants or defendants, lawyers will steer clients against them and they won’t get paid. The arbitration service is paid by the company, usually, which is a win for the consumer. But the arbitrator is individually paid only if they’re selected. (They’re also usually retired judges, et cetera.)
  - josh_fyi 3y ago
    Thank you. That does make sense. But as pointed out by the article, typical consumers/workers have no idea about how to choose an arbitrator and do not hire a lawyer.
- BizarroLand 3y ago
  The actual answer is that arbitrators are liable for their judgements. If you had your hand cut off by your manager for being 5 minutes late to work and sued your company only to find out it had to be dealt with by binding arbitration, and in the course of discovery you found an email from the CEO and the board telling managers to start cutting off people's hands if they are 5 minutes late to work, and then the binding arbitrator said that the company did no wrong, then they have exposed themselves to a potential lawsuit without the protection of a binding arbitration agreement. So, just like a fiduciary financial manager, they have a responsibility to act and judge in a way that will stand up to possible external scrutiny.
  - josh_fyi 3y ago
    Thank you. That does make sense. But do lawsuits against arbitrators happen with any non-trivial frequency? From the little I know, lawsuits against arbitrators are not a serious threat that arbitrators face. But even so, all an arbitrator need to do is rule in favor of the corporation whether there is a thread of an argument in their favor, then ruling against the corporation in the remaining tiny fraction of cases.
dbg31415 3y ago
Binding arbitration, it certainly feels like a rigged system. I just went through it and lost. Never thought I would lose against this clearly shady contractor. I had inspection reports, emails and texts from them committing to fix my house, and 400+ pages of photos. The contractor had walked off my job over a year before we ever made it to arbitration… I still don’t have my house back. The mediator, who the contractor got to pick, basically started off saying, “We have to give the benefit of the doubt to these hardworking contractors who came to your aid in your hour of need…” That was a taste of how the whole day would go. Still feels raw. Here’s a little more on my story with binding arbitration. https://www.linkedin.com/pulse/anyone-have-connections-usaa-damen-gilland-rq2uc/ https://www.linkedin.com/pulse/anyone-have-connections-usaa-...
- JumpCrisscross 3y ago
  > mediator, who the contractor got to pick Mediation is not binding. Arbitrators are picked by both sides.
  - pauldenton 3y ago
    So then why didn't the contractors listen to his suggestion for the Mediator?
    - JumpCrisscross 3y ago
      > why didn't the contractors listen to his suggestion for the Mediator? They don’t have to and they’re in a dispute. In arbitration, they have to.
  - dbg31415 3y ago
    I may be using the wrong words. They picked 2 mediators, we got to pick a mediator from the 2 they originally picked. At the end of the day we were at an impasse... and I was told it was 18+ months to get in front of a judge for a trial, and it would cost me another $100k. So the mediator said she could help with a arbitrators decision, but I had to agree to it before she would pitch it to the other side -- to be clear, I had to agree to it before I knew the terms of it. And I figured she'd just factor in where we were at that point in the negotiations and split it down the middle. But that's not how it played out. It was painful.
generated 3y ago
Having worked for a major dispute resolution provider, these conversations generally leave out a lot of context. Lots of Gell-Mann Amnesia. First, 90% of arbitration is between firms, not consumers. Consumer driven arbitration is rare enough that it's hard to specialize as a pro-business arbiter. Usually arbiter bias will be pro [big, small, old, new] just like us regular people. Second, like other public facing retail and service management, consumer disputes are generally 80% frivolous. Like "they did not read the contract" level issues. That about 50% of disputes award in favor of the consumer is seen as overly benevolent appeasement. Note: the 20% non-frivolous are usually very clear cases of the corporate participant blatantly or maliciously screwing up; no sympathy there. People are people everywhere. For this reason most industry professionals very strongly suggest mediation rather than arbitration. It's quicker, cheaper, and usually ends in a voluntary non-binding settlement. And if you don't like it, it's non-binding; you can proceed to arbitration. Corporate clients would usually prefer to voluntarily agree to a settlement to make the problem go away, and consumers get the neutral information they need to understand why they misunderstood the situation. However, most people see red and want to punish the other side. That rage makes them want to use as much authority and leverage as they can. Arbitration is seen as "not enough of a punishment, court would be better." When really, most people would be better served sitting down and talking things over with mediation rather than explicit adversarial intent. I've heard similar things from civil court judges. They don't think they're biased for or against citizens, police, lawyers, etc. They are used to seeing the most incompetent petty facepalm justifications to "punish" someone, instead of seek justice or restitution. They are biased positively towards anyone who shows the slightest decorum, competence, or noble intent.

93 points by dakial1 3y ago

whelp_24 3y ago

I still don't understand how this can be legal in the first place.

giancarlostoro 3y ago
My thoughts exactly.
FFP999 3y ago
In the USA, if a hundred wealthy businesspeople want the same law passed, it gets passed.
WillPostForFood 3y ago
What part do you think should be illegal?
- nerdponx 3y ago
  The part where you're bound to waiving your legal rights in order to engage in commerce with companies that you can't really avoid engaging in commerce with, unless you want to be an off-grid homesteader. There's nothing wrong with arbitration as a first choice to avoid court, to the benefit of both parties. There's something very wrong with binding arbitration.
- nevinera 3y ago
  Most likely they're referring to the ability for a contract to include terms that remove your right to legal recourse.
- munk-a 3y ago
  I don't think it should be legal to be able to surrender the ability to pursue legal action outside of very specific waivers. I'm fine with companies incentivizing arbitration but if a company is able to fully block regular legal actions (especially class action lawsuits) then that smells bad.
  - nine_k 3y ago
    But the wavers are rather specific, and in all cases I encountered, there are some exceptions for serious cases which the law does not allow to relegate to arbitration. I suppose that arbitration lowers the cost of a dispute very seriously. It makes sorting out small issues affordable and much faster. I see it as a good tradeoff as long as I don't depend on it in potentially serious cases, where hiring a lawyer would be the least of my troubles.
    - munk-a 3y ago
      Uber's[1] is usually held up as a prime example of these agreements - and reading through it the only carve out they allow seems to be for sexual assault[2]. IANAL but to my reading the only other carve out is when binding arbitration would be illegal. It also seems to preempt any ability to bring pretty much any kind of class action lawsuit. 1. https://www.uber.com/legal/en/document/?name=uber-connect-terms-and-conditions&country=united-states&lang=en https://www.uber.com/legal/en/document/?name=uber-connect-te... 2. "Notwithstanding the foregoing, where you allege claims of sexual assault or sexual harassment[...]"
  - bee_rider 3y ago
    Yes, we often look at it from a personal choice point of view: I can evaluate the contract and decide that I’d like to waive this right. But the law exists to protect everyone, and part of that is it imposes a little bit on everyone. If a basically every company insists that you waive your employee rights to work for them, then the only people with those rights are the unemployed, rendering those laws a bit moot. You gain a competitive advantage over your peers by being willing to waive your rights, in the sense that a company of course would like to not have to respect your rights. The point of employee protection laws is to take that off the table.
  - vorpalhex 3y ago
    My preference here, if I had a magical "change the world wand", would be to allow arbitration to be binding only B2B and not between a business and a consumer. A consumer should always be able to resort to the courts proper.
- dataflow 3y ago
  > What part do you think should be illegal? The part about cutting off your counterparty's access to the justice system
- PeterisP 3y ago
  Surrendering rights in any contract of adhesion. I'd consider it to be reasonable for a negotiated contract between two companies to include a binding arbitration clause; however, any "take-it-or-leave-it" consumer nonnegotiated contracts should be (and in some jurisdictions are) heavily restricted with respect to potentially unfair clauses, one of them being binding arbitration.
- deleted 3y ago
  [deleted]
deleted 3y ago
[deleted]
unbalancedevh 3y ago
Laws favor the people who have enough money to influence the people who make the laws. Poor people will always be at a disadvantage.
zeroonetwothree 3y ago
Contracts regularly restrict the rights of the parties. For example, a NDA restricts your right to free speech. Should this right be different? Maybe, but there’s trade offs to everything. Ultimately I’d rather take the position that if you don’t like the terms of a contract you are free to not agree to it.
- antiterra 3y ago
  Laws regularly restrict the power of contracts as well. For example, you cannot contractually give up your right to reclaim a non-work-for-hire copyright at 35 years until some period of time near that duration.
dd36 3y ago
It was perversion by the courts of a century old law that wasn’t made for unilateral consumer contracts. If the courts stopped reading that law so broadly, then the legislature could pass a law that allows it, if that’s indeed what was intended.

fallingknife 3y ago

I'm not really buying this informational asymmetry argument. Yes the companies will have been in more cases than the consumer, but that's not really a relevant comparison. The consumer isn't picking the arbitrator, his lawyer is, and he and his firm will have been involved in a lot of cases.

EGreg 3y ago
It is just like when producers aggregate into cartels like the AMA (American Medical Association) so consumers aggregate into insurance companies (eg Medicare). At the end the situation isn’t so great for people who fall through the cracks with unusual issues, but for common scenarios it’s great. The unusual issues should still have access to the ad-hoc market and usually there, producers (with all their resources and organization) have the advantage.
RugnirViking 3y ago
but to say it isn't happening raises a lot of questions. Why do so many firms so widely put mandatory arbritration clauses? why are pro-business arbitrators more likely to be chosen (despite, as you hypothesise, equal information)? could it be that there are simply more pro-buisness arbitrators than pro-consumer? so a random list would have too many for customer representative to strike off?
- fallingknife 3y ago
  Arbitration is quicker and cheaper than litigation. That alone is enough to explain why they want it. There may well be bias, but merely the fact that companies want this is not evidence of it.
nevinera 3y ago
If on average 100% of cases involve a company that is paying for an arbitration lawyer and even 80% of cases involve an individual that is paying for an arbitration lawyer (which I _highly doubt_, though I couldn't quickly find numbers), the net result in the long term is not that "20% of individuals get a negative outcome", it's far worse. This article is talking about the net effect, which is that the fact that there _is_ asymmetry means that arbitrators have an interest in _being_ biased against the individual, which means that even if you are paying for an arbitration lawyer, they are simply ruling out the _most_ biased firms, while the corporate arbitration lawyer is ruling out the _least_ biased firms. Think natural-selection, rather than game theory.

alfl 3y ago

Cory Doctorow has pointed out [0] that binding arbitration clauses leave companies open to legal DDOS “mass arbitration” attacks that end up being very pro-customer. 0: https://pluralistic.net/2022/02/24/uber-for-arbitration/#nibbled-to-death-by-ducks https://pluralistic.net/2022/02/24/uber-for-arbitration/#nib...

dataflow 3y ago
Didn't companies easily start addressing that by forbidding you from doing that?
- munk-a 3y ago
  No - it's not possible to avoid. However, arbitrators aren't robots, if claims are being filed in a clearly malicious or frivolous manner you can expect a level headed mediator to provide a remedy. In a case where one million people were legitimately harmed though, this can be absolutely disastrous for the company unless the wronged agree to waive the arbitration clause with the company and pursue something like a regular class action lawsuit. It'd still be more expensive than a regular class action lawsuit however.
  - dataflow 3y ago
    > No - it's not possible to avoid What? Just go read the PayPal one. It says very clearly you can only bring arbitration cases on an "individual basis". Which was directly in response to this issue. "Unless both you and PayPal agree otherwise, the arbitrator(s) may not consolidate or join more than one person’s or party’s claims and may not otherwise preside over any form of a consolidated, representative or class proceeding." Edit: maybe PayPal was the wrong example here - I definitely saw clauses change after the Uber court case, but it seems the PayPal one had been there longer?
    - munk-a 3y ago
      That doesn't make PayPal immune to being overwhelmed by arbitration requests, it just requires clients to file separately (which they generally should be doing anyways).

gghffguhvc 3y ago

As a protest, I’ve considered creating a browser plugin that takes the TOS and removes arbitration clause, e-signs it and PDFs it. Then posts it to the “agree” endpoint in addition to other form attributes and emails a copy to legal@BigCo. Basically automating the Dmitry Agarkov approach. https://www.huffpost.com/entry/russian-rewrites-credit-agreement-sues-bank_n_3728105 https://www.huffpost.com/entry/russian-rewrites-credit-agree...

sschueller 3y ago
Sadly the "agree endpoint" is usually a checkbox.
- gghffguhvc 3y ago
  “Agree” endpoint in quotes as it is whatever form that checkbox is in.
  - sschueller 3y ago
    yes but that form will most likely not accept a PDF file that it didn't except in the first place.
    - tremon 3y ago
      It it responds with a 2xx HTTP status code, it accepted the PDF. If the accept is handled purely in client-side javascript, the other party can never prove that you accepted the terms.
      - FFP999 3y ago
        Good luck with that argument in court though.
        gghffguhvc 3y ago
        The point is that it is a protest. By emailing bigcorp’s legal team will waste a small amount of their time. Especially if it “sincerely” thanks them for accepting your altered terms of service and shares some screenshots of the 200 response etc. doesn’t have to mention what was altered. Then references Dmitry Agarkov. V2 could use rocketreach to find individual lawyers at bigco and mail each individually with slightly different messages to create more confusion.

chasing 3y ago

Because why else would companies do it?

trogdor 3y ago
To protect their reputation. Arbitration happens privately. Court records, on the other hands, are generally public.

tptacek 3y ago

Daniel Berlin ('DannyBee), who is a lawyer (and compiler designer) and a commenter here worth following, has for years been pushing back on the C.W. that arbitration is just a way big corporations screw the little people: https://hn.algolia.com/?dateRange=all&page=0&prefix=false&query=arbitrator%20author%3ADannyBee&sort=byDate&type=comment https://hn.algolia.com/?dateRange=all&page=0&prefix=false&qu... Having been involved in actual civil litigation, a lot of this rings true. The simplest possible civil cases take years to resolve, at tremendous expense.

munk-a 3y ago
Arbitration is always an option if mutually agreed to between both parties though. I don't think anyone want to completely outlaw arbitration, just prevent companies from restricting customers from pursuing regular lawsuits (especially of the class action kind). Voluntary arbitration is an excellent tool in resolving a dispute as the costs are dramatically lower than a lawsuit and it is a much speedier process.
- pauldenton 3y ago
  Voluntary Arbitrary is a lot cheaper than a traditional Divorce
- BizarroLand 3y ago
  That's not a bad idea and pretty simple to implement, and it would save everyone a lot of hassle. "We can go to court if you want to, just know that we will spend half of what we think your case could go for if you win defending ourselves and use every tactic in our arsenal to drain your war chest until you are financially unable to continue the lawsuit, so unless you've got big bucks to burn or a darn good case and a lawyer willing to fight for you you are better off choosing an arbitrator and getting a simple and just settlement in 3 months vs 3-8 years from now even if we did wrong"
  - munk-a 3y ago
    Sorry, just to clarify, arbitration isn't a new concept or one that would need implementation - it has always been an option for any legal dispute. In fact a lot of divorces go through a mediator instead of a judge since the difference in cost is so extreme.

zeroonetwothree 3y ago

I’m not convinced this study is measuring what it claims. It seems like they identified “pro business” arbitrators as the ones that gave businesses better wins. Then they found that they gave businesses better wins? That could just be random chance. Also ultimately a 12% effect is not the end of the world. Without arbitration you are going to be paying a lawyer a ton more money so it’s not even clear it’s worse for the consumer on average.

paws 3y ago

According to Matt Stoller [0] we have Alan Kaplinsky [1] to thank. > Kaplinksy’s claim to fame is that he’s the lawyer who figured out you could get rid of the ability of a consumer to go to court by using what’s called a pre-dispute arbitration provision in a contract. I'm no expert but Kaplinsky sure sounds like a modern day super-villain. [0] https://www.thebignewsletter.com/p/ending-junk-fees-the-most-annoying#:~:text=%22I%20am%20very%20tired%20of,to%20stop%20a%20hotel%20from https://www.thebignewsletter.com/p/ending-junk-fees-the-most... [1] https://www.ballardspahr.com/People/Attorneys/K/Kaplinsky-Alan https://www.ballardspahr.com/People/Attorneys/K/Kaplinsky-Al...

WaitWaitWha 3y ago

The root cause seems to misdirected in my opinion. The article also reads like there are two issues, arbiters can be financially swayed, and contracts can force giving up rights, but the conclusion is vaguely "corporations are evil". The article suggest big companies gaming the arbitration system. Read any civil (or even criminal) court case, and both sides will do the most possible tactics to win. The disparity of expertise is not an evil behavior of the parties. Yes, individuals with fewer financial means to find lawyers in arbitration are at financial disadvantage compared to corporation, and they would be in the same, if not bigger financial bind if it was done through the court system. The notion that arbiters are beholden to corporation because of compensation is the biggest, glaring problem.

FFP999 3y ago
"The law, in its majestic equality, forbids rich and poor alike to sleep under bridges, to beg in the streets, and to steal their bread." --Anatole France

josh_fyi 3y ago

The points in the article seem quite obvious. I wonder then, why do arbitrators ever rule against the companies that pay their fees? I asked on Law Stack Exchange, but the answers were not quite convincing. https://law.stackexchange.com/questions/87589 https://law.stackexchange.com/questions/87589

JumpCrisscross 3y ago
> why do arbitrators ever rule against the companies that pay their fees? Both sides choose the arbitrator. If an individual arbitrator consistently rules against one category of claimants or defendants, lawyers will steer clients against them and they won’t get paid. The arbitration service is paid by the company, usually, which is a win for the consumer. But the arbitrator is individually paid only if they’re selected. (They’re also usually retired judges, et cetera.)
- josh_fyi 3y ago
  Thank you. That does make sense. But as pointed out by the article, typical consumers/workers have no idea about how to choose an arbitrator and do not hire a lawyer.
BizarroLand 3y ago
The actual answer is that arbitrators are liable for their judgements. If you had your hand cut off by your manager for being 5 minutes late to work and sued your company only to find out it had to be dealt with by binding arbitration, and in the course of discovery you found an email from the CEO and the board telling managers to start cutting off people's hands if they are 5 minutes late to work, and then the binding arbitrator said that the company did no wrong, then they have exposed themselves to a potential lawsuit without the protection of a binding arbitration agreement. So, just like a fiduciary financial manager, they have a responsibility to act and judge in a way that will stand up to possible external scrutiny.
- josh_fyi 3y ago
  Thank you. That does make sense. But do lawsuits against arbitrators happen with any non-trivial frequency? From the little I know, lawsuits against arbitrators are not a serious threat that arbitrators face. But even so, all an arbitrator need to do is rule in favor of the corporation whether there is a thread of an argument in their favor, then ruling against the corporation in the remaining tiny fraction of cases.

dbg31415 3y ago

Binding arbitration, it certainly feels like a rigged system. I just went through it and lost. Never thought I would lose against this clearly shady contractor. I had inspection reports, emails and texts from them committing to fix my house, and 400+ pages of photos. The contractor had walked off my job over a year before we ever made it to arbitration… I still don’t have my house back. The mediator, who the contractor got to pick, basically started off saying, “We have to give the benefit of the doubt to these hardworking contractors who came to your aid in your hour of need…” That was a taste of how the whole day would go. Still feels raw. Here’s a little more on my story with binding arbitration. https://www.linkedin.com/pulse/anyone-have-connections-usaa-damen-gilland-rq2uc/ https://www.linkedin.com/pulse/anyone-have-connections-usaa-...

JumpCrisscross 3y ago
> mediator, who the contractor got to pick Mediation is not binding. Arbitrators are picked by both sides.
- pauldenton 3y ago
  So then why didn't the contractors listen to his suggestion for the Mediator?
  - JumpCrisscross 3y ago
    > why didn't the contractors listen to his suggestion for the Mediator? They don’t have to and they’re in a dispute. In arbitration, they have to.
- dbg31415 3y ago
  I may be using the wrong words. They picked 2 mediators, we got to pick a mediator from the 2 they originally picked. At the end of the day we were at an impasse... and I was told it was 18+ months to get in front of a judge for a trial, and it would cost me another $100k. So the mediator said she could help with a arbitrators decision, but I had to agree to it before she would pitch it to the other side -- to be clear, I had to agree to it before I knew the terms of it. And I figured she'd just factor in where we were at that point in the negotiations and split it down the middle. But that's not how it played out. It was painful.

generated 3y ago

Having worked for a major dispute resolution provider, these conversations generally leave out a lot of context. Lots of Gell-Mann Amnesia. First, 90% of arbitration is between firms, not consumers. Consumer driven arbitration is rare enough that it's hard to specialize as a pro-business arbiter. Usually arbiter bias will be pro [big, small, old, new] just like us regular people. Second, like other public facing retail and service management, consumer disputes are generally 80% frivolous. Like "they did not read the contract" level issues. That about 50% of disputes award in favor of the consumer is seen as overly benevolent appeasement. Note: the 20% non-frivolous are usually very clear cases of the corporate participant blatantly or maliciously screwing up; no sympathy there. People are people everywhere. For this reason most industry professionals very strongly suggest mediation rather than arbitration. It's quicker, cheaper, and usually ends in a voluntary non-binding settlement. And if you don't like it, it's non-binding; you can proceed to arbitration. Corporate clients would usually prefer to voluntarily agree to a settlement to make the problem go away, and consumers get the neutral information they need to understand why they misunderstood the situation. However, most people see red and want to punish the other side. That rage makes them want to use as much authority and leverage as they can. Arbitration is seen as "not enough of a punishment, court would be better." When really, most people would be better served sitting down and talking things over with mediation rather than explicit adversarial intent. I've heard similar things from civil court judges. They don't think they're biased for or against citizens, police, lawyers, etc. They are used to seeing the most incompetent petty facepalm justifications to "punish" someone, instead of seek justice or restitution. They are biased positively towards anyone who shows the slightest decorum, competence, or noble intent.