Arbitration Everywhere, Stacking the Deck of Justice • Hacker News Board

Re: Arbitration Everywhere, Stacking the Deck of Justice

#91

Post by bradleyjg » Sat, Oct 31, 2015, 8:57 PM UTC

bmh_ca wrote: post #63

nickff wrote: post #51

Earlier quoted context omitted.

What if arbitration clauses are not a problem at all? There is a great deal of contradictory evidence with respect to whether arbitration is more or less favorable to consumers and employees (though it is definitely very bad for class-action lawyers). But even if we assume for the purpose of argument that consumers always lose disputes which are arbitrated, they may be willing to make that trade in exchange for reduc…

I was a class action lawyer for several years. There is a great deal of definitive evidence that arbitration clauses undermine the purposes of class proceedings, those purposes being: 1. increased access to justice (i.e. one may be automatically included in a successful claim, as opposed to seeking prospective reward through a potentially lengthy and expensive adjudication); 2. lowering of overall cost of adjudicatio…

>> behavioural correction requires a certain percentage of individuals to bring and succeed in their cases

No it doesn't. Both the extensive use of the class form and punitive damages (or close substitutes) are virtually unique to the United States. Ad hoc regulation by an entrepreneurial plaintiff's bar acting without meaningful client input is not the not the only effective means to regulate businesses. On the contrary, plenty of countries arguably do a better job without the use of them at all.

Re: Arbitration Everywhere, Stacking the Deck of Justice

#92

Post by ende » Sat, Oct 31, 2015, 9:13 PM UTC

icebraining wrote: post #74

ende wrote: post #59

Earlier quoted context omitted.

Ive been trying to think of an effective way of regulating these sorts of contacts through legislation, and what you're describing seems like the simplest route. Simply have the public draft the standard contractual templates on behalf of consumers/employees/tenants that companies/employers/landlords are constrained to use.

Unless there's any reason to think the corps would have any less influence on that than they have on the laws that allow them to get people to waive their rights to sue - and why would they? - that sounds like a great way to prevent customers from escaping abusive conditions. As a good example, the aforementioned Texas agreement seems to have a clause that states that the landlord can enter the property at any time w…

Good point. I'm not even really one to turn to legislative remedies. It's difficult to imagine many practical ways to match the vast legal resources of these established interests against individuals.

Re: Arbitration Everywhere, Stacking the Deck of Justice

#93

Post by guelo » Sat, Oct 31, 2015, 9:17 PM UTC

bradleyjg wrote: post #91

bmh_ca wrote: post #63

Earlier quoted context omitted.

I was a class action lawyer for several years. There is a great deal of definitive evidence that arbitration clauses undermine the purposes of class proceedings, those purposes being: 1. increased access to justice (i.e. one may be automatically included in a successful claim, as opposed to seeking prospective reward through a potentially lengthy and expensive adjudication); 2. lowering of overall cost of adjudicatio…

>> behavioural correction requires a certain percentage of individuals to bring and succeed in their cases No it doesn't. Both the extensive use of the class form and punitive damages (or close substitutes) are virtually unique to the United States. Ad hoc regulation by an entrepreneurial plaintiff's bar acting without meaningful client input is not the not the only effective means to regulate businesses. On the cont…

How do those other countries do it?

Re: Arbitration Everywhere, Stacking the Deck of Justice

#94

Post by guelo » Sat, Oct 31, 2015, 9:21 PM UTC

The term activist judges is normally used against liberal judges but the corporate lawyers that Bush installed into the federal courts have been overturning long established laws and precedents at an astonishing pace.

Re: Arbitration Everywhere, Stacking the Deck of Justice

#95

Post by bradleyjg » Sat, Oct 31, 2015, 9:22 PM UTC

guelo wrote: post #93

bradleyjg wrote: post #91

Earlier quoted context omitted.

>> behavioural correction requires a certain percentage of individuals to bring and succeed in their cases No it doesn't. Both the extensive use of the class form and punitive damages (or close substitutes) are virtually unique to the United States. Ad hoc regulation by an entrepreneurial plaintiff's bar acting without meaningful client input is not the not the only effective means to regulate businesses. On the cont…

How do those other countries do it?

Public sector regulators drawing a salary and answerable (at least in theory) to democratically elected bosses and ultimately the people.

Re: Arbitration Everywhere, Stacking the Deck of Justice

#96

Post by powera » Sat, Oct 31, 2015, 9:25 PM UTC

I'm going to take a contrary point of view: Class action lawsuits (where a group of customers sue a company that they purchased a product from) are almost always pointless and expensive wastes of money, and we should encourage contracts to forbid them.

* Many class-action suits end up with a result of lawyers get $50 million, and everyone who bought a product gets a coupon for more of that product.

* The threshold for what can be the basis of a class-action is extremely low.

* A good portion of "legitimate" class-action suits could also be construed as federal fraud / false advertising suits. (the example of a bank selling insurance that couldn't possibly be used would be an example)

All of these are different from, say, a town suing a company for environmental damage. In that case, there's no contract between the individual citizens of the town and the company, so this trend won't impact those lawsuits at all.

Re: Arbitration Everywhere, Stacking the Deck of Justice

#97

Post by makomk » Sat, Oct 31, 2015, 9:42 PM UTC

bradleyjg wrote: post #95

guelo wrote: post #93

Earlier quoted context omitted.

How do those other countries do it?

Public sector regulators drawing a salary and answerable (at least in theory) to democratically elected bosses and ultimately the people.

From what I've seen, the US already has pretty aggressive public sector regulation in most areas, more than we seem to have over here in the UK these days. It's still not a complete solution because regulators don't have the resources to be everywhere at once.

Re: Arbitration Everywhere, Stacking the Deck of Justice

#98

Post by philsnow » Sat, Oct 31, 2015, 9:43 PM UTC

powera wrote: post #96

I'm going to take a contrary point of view: Class action lawsuits (where a group of customers sue a company that they purchased a product from) are almost always pointless and expensive wastes of money, and we should encourage contracts to forbid them. * Many class-action suits end up with a result of lawyers get $50 million, and everyone who bought a product gets a coupon for more of that product. * The threshold fo…

> Many class-action suits end up with a result of lawyers get $50 million, and everyone who bought a product gets a coupon for more of that product.

Who pays that $50M to the lawyers? It's a zero-sum game, where should the plaintiffs win, the defendant loses big with very little effort on individual plaintiffs' parts.

What other remedy do consumers have against abusive corporations who act in bad faith, knowing full well that individuals won't take 40 or 400 hours out of their life to fight over $300?

I can absolutely see it going the other way as well, where an activist (or sock puppet for a competitor) can rally together a mob of people against whatever company they don't like this week. My response to that is that, in general, companies are in a position to defend themselves and should regard defending these cases as a cost of doing business.

The alternative is to ask consumers (especially those in poverty) to enjoy death by a thousand cuts as dozens of companies each take their pound of flesh from each and every one of them. In this case, the "cost of doing business" takes food off the table.

Re: Arbitration Everywhere, Stacking the Deck of Justice

#99

Post by wpietri » Sat, Oct 31, 2015, 9:43 PM UTC

powera wrote: post #96

I'm going to take a contrary point of view: Class action lawsuits (where a group of customers sue a company that they purchased a product from) are almost always pointless and expensive wastes of money, and we should encourage contracts to forbid them. * Many class-action suits end up with a result of lawyers get $50 million, and everyone who bought a product gets a coupon for more of that product. * The threshold fo…

You're missing the social value of class action lawsuits.

There are basically three ways to have reasonably well run open markets: individual action, state action, and collective action.

Individual action often makes no sense. If a company shafts me for $10, I'm not going to spent the thousands or millions necessary to prove the error. I'll just write it off and be less trusting next time. But if a company can screw each American out of $10, they've made $3.2 billion, which is a great incentive, and also provides for fantastic legal defense. Net result: a lot of people have bad experiences, reducing consumer trust and making innovation harder.

State action is also often problematic. It's not bad at some things. But especially at HN, we don't want to encourage this as the primary means of market regulation. Governments are slow to move and risk averse. It's easier and safer for them to over-regulate, favoring incumbents and limiting innovation to what they can be persuaded to permit. (See, e.g., the car market.)

Class action, on the other hand, fills an important gap. Companies know that they can't just screw everybody without risking a big lawsuit and a big payout. But plenty of problems get solved without government having to intervene. Class action basically allows for a "forgiveness, not permission" model for regulation. As long as your customers are happy and you treat them fairly, your risk is low.

If class action stops working as a way of redressing grievances, we'll see a lot of people agitating for increased government regulation. As an entrepreneur, I'd hate to see that happen.

Re: Arbitration Everywhere, Stacking the Deck of Justice

#100

Post by jcfrei » Sat, Oct 31, 2015, 9:45 PM UTC

powera wrote: post #96

I'm going to take a contrary point of view: Class action lawsuits (where a group of customers sue a company that they purchased a product from) are almost always pointless and expensive wastes of money, and we should encourage contracts to forbid them. * Many class-action suits end up with a result of lawyers get $50 million, and everyone who bought a product gets a coupon for more of that product. * The threshold fo…

But class-action suits are ideal when a large number of people suffered a minor monetary loss. How are you going to deal with these cases if only arbitration is left? If these cases are handled on an individual basis nobody will seek redemption. Whether and how much the lawyers or the plaintiffs receive in compensation is not so important in my eyes, what matters is the exemplary effect on businesses.