Could someone explain why binding arbitration clauses are horrible? My understanding is that it keeps costs low on both sides as taking things to actual court can get expensive.
First, they make the proceedings private: there’s no public record of the proceedings or verdict, and even if you win there’s no precedent that others can use. The for-profit nature of the arbitrator (much or even most of whose business comes from corporate clients) represents a conflict of interest.
Second, they isolate the plaintiff: you can’t sue as part of a class action, so no lawyer can represent a group of similarly wronged people in exchange for a percentage of any verdict. This means you have to pay for your own lawyer, which many people can’t afford to do and even if you can it may not be worth it if the damage is small enough.
Together, these issues massively favor business and employers that include these clauses in contracts, as reflected in both win rates for corporations as well the number of cases brought against them versus in open court.
Could someone explain why binding arbitration clauses are horrible? My understanding is that it keeps costs low on both sides as taking things to actual court can get expensive.
First, they make the proceedings private: there’s no public record of the proceedings or verdict, and even if you win there’s no precedent that others can use. The for-profit nature of the arbitrator (much or even most of whose business comes from corporate clients) represents a conflict of interest.
Second, they isolate the plaintiff: you can’t sue as part of a class action, so no lawyer can represent a group of similarly wronged people in exchange for a percentage of any verdict. This means you have to pay for your own lawyer, which many people can’t afford to do and even if you can it may not be worth it if the damage is small enough.
Together, these issues massively favor business and employers that include these clauses in contracts, as reflected in both win rates for corporations as well the number of cases brought against them versus in open court.
But they can stack the deck heavily in their favor, and you don’t have the same legal protections anymore. Who arbitrates Where? When?
Yeah. There already are arbitrators by law: public courts.