The Privitization of Justice and Erosion of Rights by Corporations: Arbitration

[Brainonska511]

I'm surprised there hasn't been a thread on this subject yet.

Main article: http://nyti.ms/1MyX60l
Follow up article: http://nyti.ms/1N4UNfI

Businesses have been using arbitration to erode your rights to seek justice in court, and it's largely gone unnoticed by the American public. Company overcharging a few bucks a month for a service? Good luck starting a class-action lawsuit if there is an arbitration clause. Facing employment discrimination or some other civil rights violation? You could be in for a big shock when you're forced in the farce of arbitration.

 

[Moonbeam]

It's 5 to 4 on the US Swine Court.

 

[theeedude]

It's 5 to 4 on the US Swine Court.

The suspense about which 5 against which 4 is killing me.

 

[Jeff7]

Not a complete list, I'm sure.
Quite a few big-name companies there.


If I wrote up a book of legal terms&conditions for doing business with me, who can I submit that to at these companies for review? :hmm:

A spokeswoman for American Express said that over the last few years, banking regulators have examined the company’s business practices, largely obviating the need for class actions. The regulators “have required significant remediations and large fines to address issues they found, with very little loss in value to the consumer,” said the spokeswoman, Marina H. Norville.

So the need for class actions has been largely eliminated, but you're still going to really drive the point home that you're in command by ensuring that customers shed some of their rights before daring to do business with you?

“Arbitration provides a way for people to hold companies accountable without spending a lot of money,” Mr. Pincus said. “It’s a system that can work.”

Oh, silly me, they're just doing this because they care about saving their customers money. Got it.

“You or we may elect to resolve any claim by individual arbitration. Claims are decided by a neutral arbitrator.”

Ah, a neutral arbitrator, one which considers the company to be their customer, and one who knows that that company will be quite displeased if they lose a case.

 

[theeedude]

Republicans got the tort reform they've always told us we needed. And they got the private sector to take care of it, which they keep telling us is the best way. I guess now we can see how their slogans work in reality.

 

[trenchfoot]

On the matter of employee/employer disputes, this is where being a member of a union is a plus.

If and when a labor dispute ever has to go as far as arbitration, the union and management will, in almost all cases, have to negotiate as to who the arbitrator will be. As well, where unions have had an enduring relationship with those respective companies, a list of arbitrators who are trusted by both sides will have been, over time, developed and retained, thus ensuring for all practical purposes, a fair hearing.

It's been my experience that in most arbitration hearings, it usually amounts to a tossup as far as who wins, what with those grievances being brought to arbitration having been previously fought over at the lower levels where all other avenues of resolution have been exhausted.

edit - Selecting an arbitrator is a whole 'nother thing though, as prior decisions made by the arbitrators come into play, as well as a host of other factors.

 

[Cozarkian]

Proposed law:

Terms that are incidental to the main purpose of a contract, including but not limited to arbitration, confidentiality, attorneys' fees and liquidated damages clauses are not enforceable unless they are either negotiated actively by a person with authority to bind a company to changes in its form contract or are negotiated as optional amendments. A company may offer additional consideration for optional terms.

E.g., if you sign up for DirecTV online or with a sales agent at Costco, the only valid contract terms are basically the price, channels, and duration of the contract. The company can include a check box asking if the customer wants the option of binding arbitration (and can even offer discounts if you agree), but they can't force you to agree to arbitration as a take it or leave deal unless they want to have a corporate officer personally negotiate every contract they enter.

 

[theeedude]

I am sure GOP Congress is on it.

 

[Cozarkian]

I am sure GOP Congress is on it.

I hope not. It would be more appropriate as state law.

 

[Brainonska511]

I hope not. It would be more appropriate as state law.

There are some state laws in place to protect consumers, but if you read the articles, you'll see how recent court rulings have twisted the Federal Arbitration Act to preempting some of those state protections for consumers.

 

[fskimospy]

I hope not. It would be more appropriate as state law.

State law in plenty of places already makes mandatory arbitration/class action waiver illegal. SCOTUS recently overturned this due to conflicting federal law so any solution will have to at least start as a federal one.

I'm glad the NYT is finally bringing attention to this, as it's one of the more far-reaching and shitty decisions that has been made in recent years.

 

[theeedude]

I hope not. It would be more appropriate as state law.

GOP SCOTUS has ruled 5:4 that states can't decide this for themselves.

https://en.wikipedia.org/wiki/AT&T_Mobility_LLC_v._Concepcion

AT&T Mobility v. Concepcion, 563 U.S. 333 (2011), is a legal dispute that was decided by the United States Supreme Court.[1][2] On April 27, 2011, the Court ruled, by a 5–4 margin, that the Federal Arbitration Act of 1925 preempts state laws that prohibit contracts from disallowing class-wide arbitration, such as the law previously upheld by the California Supreme Court in the case of Discover Bank v. Superior Court.

I will let you guess who the 5 who voted against states' rights were.

 

[Brainonska511]

An update to the arbitration saga:

http://nyti.ms/23qQgfY

The nation’s consumer watchdog is unveiling a proposed rule on Thursday that would restore customers’ rights to bring class-action lawsuits against financial firms, giving Americans major new protections and delivering a serious blow to Wall Street that could cost the industry billions of dollars.

The proposed rule, which would apply to bank accounts, credit cards and other types of consumer loans, seems almost certain to take effect, since it does not require congressional approval.
...

Of course, the industry touts arbitration as a "benefit to consumers" and how this rule will only hurt consumers, utterly laughable claims.

 

[PokerGuy]

Unfortunately, this rule only covers banks and some other financial organizations. It's really a band-aid, a stop gap. Ultimately, I'd like to see legislation that bans forced arbitration clauses. Arbitration should be a mutual choice beneficial to both parties, not a mechanism to prevent consumers from holding corporations to account when they do bad things.

I don't see any chance of that happening anytime soon though, the interests supporting forced arbitration clauses are too well financed.

The other thing that could help would be to have actual neutral arbitrators, not ones beholden to (and paid by) the companies. Arbitration is worthless if the arbitrator is not neutral.

 

[Paratus]

Unfortunately, this rule only covers banks and some other financial organizations. It's really a band-aid, a stop gap. Ultimately, I'd like to see legislation that bans forced arbitration clauses. Arbitration should be a mutual choice beneficial to both parties, not a mechanism to prevent consumers from holding corporations to account when they do bad things.

I don't see any chance of that happening anytime soon though, the interests supporting forced arbitration clauses are too well financed.

The other thing that could help would be to have actual neutral arbitrators, not ones beholden to (and paid by) the companies. Arbitration is worthless if the arbitrator is not neutral.

Yes, while I don't remember the actual percentage didn't corps win 90+% of the time using arbitration.

 

[PokerGuy]

Yes, while I don't remember the actual percentage didn't corps win 90+% of the time using arbitration.

I don't know the exact stat, but I'm sure since the corp is the paying customer and the arbitrators don't want to lose their paying customers, the consumer has virtually no chance in all but the most egregious cases.

This sham of a system needs to be ended, but if people don't vote with their wallet (ie, don't do business with companies that use forced arbitration), nothing short of federal legislation will change things.

 

[brycejones]

I don't know the exact stat, but I'm sure since the corp is the paying customer and the arbitrators don't want to lose their paying customers, the consumer has virtually no chance in all but the most egregious cases.

This sham of a system needs to be ended, but if people don't vote with their wallet (ie, don't do business with companies that use forced arbitration), nothing short of federal legislation will change things.

Yeah, but if your only options for broadband or wireless service only come with arbitration clauses you're kind of screwed. The FCC is also looking to implement a similar rule in the telecom space for this very reason.

There are several great things about this for companies. Even if the consumer "wins" most require the outcome and even subject of the arbitration to be kept secret. So its entirely possible for a company to keep doing whatever practice is illegal and just accept the cost of losing a few arbitration cases as part of doing business. There is zero incentive for companies to change behavior even when they lose.

 

[Sonikku]

I'm surprised there hasn't been a thread on this subject yet.

Main article: http://nyti.ms/1MyX60l
Follow up article: http://nyti.ms/1N4UNfI

Businesses have been using arbitration to erode your rights to seek justice in court, and it's largely gone unnoticed by the American public.

And why would day? Americans are caught up in real issues atm. Like whether the trannies should be able to take a shit in the stall next to your wife or daughter. Compared to that, things like this don't even matter.

 

[1prophet]

And why would day? Americans are caught up in real issues atm. Like whether the trannies should be able to take a shit in the stall next to your wife or daughter. Compared to that, things like this don't even matter.

And those that support these said "trannies" are able to get big companies to boycott states that refuse to allow them to "take a shit in the stall next to your wife or daughter", yet somehow are powerless to influence issues such as mandatory arbitration.

 

[Brainonska511]

And those that support these said "trannies" are able to get big companies to boycott states that refuse to allow them to "take a shit in the stall next to your wife or daughter", yet somehow are powerless to influence issues such as mandatory arbitration.

I think the bigger issue, which seems to be lost is that the social conservatives happen to be aligned with the economically conservative, the kind that pushed for an enabled these binding arbitration agreements (look at the SCOTUS rulings in favor of binding arbitration and which justices were on each side of the ruling). So you have people voting to protect their social conservative views and have them enforced on society while getting totally fucked in the economic realm.