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Forced arbitration is creating a parallel legal system where certain companies are excluded from the consequences of their own actions. One might even say they’

• mchusma 5d ago
  I have been on both sides of arbitration, winning and losing. It’s much better. Basically legislation done right (for civil matters). The only people who really win from traditional legislation are lawyers (and plaintiffs counsel who use the long expensive process to blackmail people - which is 90% of civil cases)
  • z3ugma 5d ago
    Did you mean "litigation" rather than "legislation" ?
    • eru 5d ago
      I thought legislation made a lot of sense: If you had better laws, arbitration wouldn't be as necessary.
  • bickfordb 5d ago
    Arbitration can be more efficient, but both parties should have an option to choose it, a direct settlement or public court. The average consumer is denied the choice by using these everyday services that have non-negotiable contracts.
    • PunchyHamster 5d ago
      None of the parties should have option to choose it, it should be within govt. justice system, just have arbitration court
      • nickff 5d ago
        Many places have a ‘small claims court’, which is very similar to arbitration. The issue is that class action lawsuits are very profitable for plaintiff lawyers working on contingency, so those are the cases that get brought.
        • pixl97 5d ago
          They are very profitable when they win, what is the win rate of class action cases. Also what is the win rate of chosen class action cases versus all potential class action cases. Measurement matters here.
          • nickff 5d ago
            The 'tipping point' for class actions is usually the class certification, not a final judgement by the court. Class actions are absurdly expensive for defendants, largely due to the scope of discovery, and they also cause problems for public companies (for reporting and other reasons), so public companies almost always settle them after the class is certified. On the other side, these settlements often don't offer much benefit to the class, because the plaintiff counsel take a massive fee off the top, pay off the lead plaintiff, and don't have much incentive to do anything for the remainder of the class.
            • pixl97 5d ago
              Eh, class action lawsuits are more about altering the large companies behavior in bulk because the individual harm to any plaintiff is rather small and nearly impossible to justify the expense and complexity of the suit. The plaintiff themselves would not profit off of it.
              • nickff 5d ago
                You're describing the 'private attorney general' theory/idea, which I'd believe if class-action lawyers were taking less remunerative cases that offered more public benefit. https://en.wikipedia.org/wiki/Private_attorney_general https://en.wikipedia.org/wiki/Private_attorney_general
  • dataflow 5d ago
    You seem to be missing that arbitrators have a financial incentive to side with the company, which pays them? Explained in this video: https://news.ycombinator.com/item?id=49787720 https://news.ycombinator.com/item?id=49787720
    • BeetleB 5d ago
      I wonder how often this is the case. The one time I read the fine print when signing up for a service, it said that I had the right to disagree with the choice of arbiter, and get some national organization to pick a different arbiter independently. I don't know how common this is, but yeah, this is a bare minimum that one should have with arbitration.
      • alistairSH 5d ago
        But, many of the members of that organization make their money from various forced arbitration deals, so that doesn't necessarily move the needle back towards the consumer.
        • LorenPechtel 5d ago
          This isn't specifically business vs consumer. The problem is ruling against the guy who brings you more business isn't good for getting more business. And you have a related problem with big fish vs big fish (for example, arbitration of union contracts) where you have to appease both sides--go something like 50/50 regardless of merits. Very clear case, arbitration is fine. Fuzzy case, I would much prefer something that doesn't tip the scales in advance. Note that the same bias problem exists with home inspectors. Realtors won't like inspectors that find things that kill deals. That one can be solved by hiring your own inspector with no input from the realtor.
  • afavour 5d ago
    Arbitration is fine. Forced arbitration is not.
    • eru 5d ago
      They can't force arbitration on you. If eg Uber runs you over or bumps your car, you have no contractual relationship with them, and thus they can't force arbitration on you. That's why they have to write the arbitrary clause into their ToS that they need you to agree on. No forced arbitration. Of course, if you don't agree with the ToS, Uber is also not forced to transport you. But that's fair enough.
      • account42 5d ago
        No, that's not fair enough. It's a very one sided contract where one party has all the power.
      • afavour 5d ago
        > Of course, if you don't agree with the ToS, Uber is also not forced to transport you. But that's fair enough. IMO, no it is not. It should not be legal to force arbitration via ToS.
      • dataflow 5d ago
        > Of course, if you don't agree with the ToS, Uber is also not forced to transport you. But that's fair enough. Letting entities that hold the vast majority of the leverage and financial/legal/political power in a contract opt out of the legal system and pick an alternative with a financial incentive to side with them is perhaps "fair" to you, but a lot of people would disagree on the "enough" part.
      • lux-lux-lux 5d ago
        Have you ever ridden an Uber? Then yes, they absolutely can. You agreed to it when you installed the app.
      • itopaloglu83 5d ago
        Disney+ case showed us that companies are using arbitration to erode basic rights, even in unrelated matters. It’s one thing to say the legal system is expensive and slow, let’s resolve our issues by a third party, and another thing to where there’s no further action you can take and the arbitration authority is being paid by the company. Its simply becoming a parallel legal system for a different class.
  • xrd 5d ago
    I always thought arbitration was forcing weaker parties out of the fairer legal system. Now I wonder if that's a planted idea by the legal industry? It made sense to me that arbitration was paid for by the company, and there would be incentives for the judge to side with their long term meal ticket. But perhaps all that is wrong? I really wish you could elaborate on why it is better, I'm very interested in challenging my assumptions here.
    • lostdog 5d ago
      Arbitration is secret. There's no way to determine if it's fair.
    • ventana 5d ago
      Your reasoning makes sense, and I was concerned in a similar way when I filed my arbitration case (for about $8k) against the manufacturer of my leased car. The so called “Lemon law” in California suggests the arbitration as the first step. Surprisingly enough, I won the case, and it only took me about an hour of collecting documents and filling in the forms, and 45 minutes of the phone call. Even though the car manufacturer does indeed pay for the arbitration, I never felt the arbiter was biased, and the judgement was completely in my favor.
  • anyonecancode 5d ago
    Doesn't arbitration avoid setting binding precedent? So even if the consumer wins a case, it's still overall better for the company.
    • ThrustVectoring 5d ago
      Companies like arbitration because unlike in a civil lawsuit, the plaintiff cannot compel discovery. Paying for an arbitrator is cheaper than going through discovery, especially if the discovery unearths facts materially damaging to the business.
    • itopaloglu83 5d ago
      It’s also not public record either. So, when an individual wins a case, others in the similar situation are not notified or can be made aware of it. Make it a public record with other bindings like one ruling applies to all customers etc. then at least it’s a system with transparency.
  • bearjaws 5d ago
    This is simply untrue, and honestly anyone who thinks our legal system does not provide justice needs to go travel the world to see how it really works for 80% of the global population. All we really need in the US is for arbitration to be optional, you can start with arbitration but if you believe on good merits you have a case and fail arbitration you should have the right to your day in court. Throwing out our whole legal system because sometimes the lawyers make the most money is reductionist at best.
    • mgfist 5d ago
      I don't think you really read the comment. They specifically mentioned it for civil matters
      • alistairSH 5d ago
        That's 75%+ of all legal cases.
        • mgfist 5d ago
          and?
    • BeetleB 5d ago
      I believe what he's referring to is the cost of the legal system. Lawyers cost money, and if the other party has a lot more money, they can play all kinds of tactics to keep the case going (filing pointless motions, drowning your lawyer with huge amounts of documents, etc). With arbitration, the arbiter can put an end to those shenanigans really quickly, because they're not legally obligated to allow for that kind of crap. There are ups and downs to both systems. The benefits are there for parties of roughly equal size. The down side is there is no recourse if the arbiter makes a completely unfair judgement (e.g. because he thinks some law should not apply, etc). > All we really need in the US is for arbitration to be optional, you can start with arbitration but if you believe on good merits you have a case and fail arbitration you should have the right to your day in court. That just makes it the worst of both worlds! The whole point of arbitration is not to have a war of attrition, and to make the process efficient. Your solution doesn't take care of it. If I'm a business getting into a contract with another business, knowing that you can't outspend me in court is important, and lets both of us make a deal. If I know you still want the option to go to court, it's as if arbitration wasn't on the table. A better system would be to change the law such that for certain, predefined offenses, you can't waive your right to go through the legal system (e.g. sexual harassment). And of course, both parties should have say on who the arbiter is. Finally, you are talking to someone who's had experience with arbitration. You might want to tone things down in your rhetoric if you don't have your own experience to bring to the table. Things might sound fine in theory, but can be really, really bad in practice. As an example, on How I Built This, whenever he's interviewing a founder that went to court to enforce a patent they owned, he asks if it was worth it. The answer almost always is "It was a bad idea and we shouldn't have filed a case." This is coming from those who won in court.
  • lostdog 5d ago
    Prove it. Where are the transcripts of all arbitration proceedings so we can see that arbitration is fair? See, that's why court proceedings are public, so that the public can verify that courts are fair. It's also why judges are appointed by democratically elected politicians. Who appointed your arbitrator? And of course the court system is bad and unfair in a bunch of ways. But it's starting from a much better place than secret, forced arbitration.
• TZubiri 5d ago
  Worth noting that this is only for the civil responsibility, that is, deciding the award of damages. The criminal charges, if any, whether to the driver or to Uber management (possibly from the sham structuring of worker categorization and corporate structure in order to reduce tax liabilities while reducing control and thus endangering consumers) are proper in state criminal courts and can never be delegated to private courts.
• skybrian 5d ago
  In this case, that doesn't seem to be what happened? The judge ruled against them.
  • itopaloglu83 5d ago
    In general, most issues are being redirected to forced arbitration and not enough people can or effort to sue these companies, so in actual effect, they’re immune one might say.
    • skybrian 5d ago
      From the consumer's point of view, which is easier and gets better results, the arbitration or a regular lawsuit? Seems like that's an empirical question.
      • itopaloglu83 5d ago
        Unjust justice delivered fast is not justice, it’s systematic injustice. Companies are not doing this for faster problem resolution, they’re doing this to shield themselves from the consequences of their own actions.