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Comment by hedora | Hacker News Reader

I never understood why binding arbitration was legal for non-negotiated contracts.

Also, by reading this you agree all disputes between us will go through an arbitration firm of my choosing.

I don't understand why binding arbitration is legal for anything ever. Having your disputes resolved in court is a fundamental right. Signing away that right in a contract should be impossible, like signing yourself into slavery.

I agree with you in principle that you shouldn't be forced into binding arbitration a priori before any dispute arises. I disagree with you on the point that I think binding arbitration can be a useful alternative remedy to the traditional legal system.

Binding arbitration serves to resolve the dispute. If you can go through binding arbitration and then still go on to sue in court, then it isn't really very binding, is it? So, in order for binding arbitration to be binding, it has to be possible to legally contact too resolve a dispute by binding arbitration. In doing so, you contract to abide by the judgement and waive your right to pursue further legal action (with potentially a handful of exceptions). It is often beneficial for both parties to go through the accelerated process of binding arbitration rather than drag disputes through the overworked court system.

>I think binding arbitration can be a useful alternative remedy to the traditional legal system.... It is often beneficial for both parties to go through the accelerated process of binding arbitration.

We see this on TV.

Those court shows (Judge Judy, People's Court, Judge Mathis, etc) are not actually "real" court, but are binding arbitration. By agreeing to arbitration both parties who appear in those forums "win" in some way no matter the outcome. The judgement is paid by the show instead of the defendant, both parties get an appearance fee plus an all expenses paid trip to Los Angeles or New York (depending on the show). So the plantiff is guaranteed quick payment if they win the case and the defendant is guaranteed not to have to pay even if they lose.

Another benefit is the plantiff doesn't have to express any effort trying to collect the judgment (like appearing in court again to get an order to garnish the defendant's bank accounts) and the defendant won’t have any civil judgement on their record (they can show up on your credit report and can negatively affect your credit score)

On top of all this the audience is entertained, Judge Judy is one of the most popular daytime shows.

(Also the judges on these shows are [usually] MORE experienced than the magistrates who hear cases in small claims court)

I see how it could be advantageous. It just doesn't seem worth it.

For just about any fundamental right, you can come up with scenarios where it would be advantageous in that scenario to be able to sign them away. But we generally don't allow this, because those fundamental rights are more important than whatever advantage might come from signing them away.

I don't see that the "binding" in "binding arbitration" is necessarily in conflict with the ability to sue. Contracts themselves are considered to be "binding," yet we can still sue over them. If binding arbitration were similar to that, then you could still sue over the result, and the court's job would be to look at the result of arbitration and decide whether it was correct or not. If the arbitration is truly beneficial to both parties then neither one will sue.

There's no incompatibility with something being a right and someone choosing to not exercise that right. Your argument is similar to arguing that you should not be allowed to speak while under arrested, or that you should be forced to own property.

Turn it around and it's just a matter of not allowing anyone else to infringe on your rights to that extent; to go back to his example maybe you do have the right to sign yourself away to slavery, but nobody has the right to take up that contract.

Everyone uses the "signing yourself into slavery" example, but it's not clear what that means. If you consent to it, then it's not slavery (you can make arguments about "wage slavery," but I think that's a different issue). If you sign a contract to perform labor for some period of time, then change your mind later, the contract likely has some terms for breaking the contract early, and if it doesn't, it's probably not likely to be enforced by any court.

That's nothing like slavery then.

Not being allowed to quit is pretty much the defining aspect of slavery.

A pretty fundamental part of any contract is the cost to a party if they wish to terminate the contract.

Choosing not to exercise a right is completely different from giving up a right.

I can choose to speak while under arrest, but I cannot give up my right to silence. I can choose not to own property, but I cannot give up my right to own it.

Somewhat-serious question: If someone hands me a paper that says this, can't I just do the same and hand them a sheet that renders all arbitration bindings null and void?

You signed the paper the bank handed you. The bank is unlikely to sign the paper you hand them.

You can change the contract before signing it, then give it back to them and wait for them to accept it (either explicitly or implicitly).

Works in most jurisdictions since both parties have to agree to the contract.

Wouldn't this be fraud if you didn't flag the changes/tell the other party about them?

That's difficult to do when your cell provider presents the contract on an LCD screen, or via a web page.

On the other hand, the car dealership refused to allow me to redline their contract. I was fortunate that I could -- and did -- walk away, and I was able to find another dealer that didn't yet have a MBA clause.

What is a MBA clause? A quick Google search couldn't find me a clear definition. Just curious...

Mandatory binding arbitration

Sometimes they do!

https://www.rt.com/business/man-outsmarts-banks-wins-court-2...

The courts actually prefer it as a lower cost alternative.

The courts do prefer it, but from a legal perspective, as an adhesion contract with boiler point terms, the arbitration clause shouldn't have been enforceable.

It is definitely lower cost (and the vast majority of arbitration clauses end up allowing choice of arbitrator by plaintiff, or arbitrator is randomly selected with a couple chances to reject)

It's not up to the courts. Congress passed a law, the Federal Arbitration Act, which explicitly instructs the courts to treat arbitration provisions at least as favorably as any other contract provision. In the absence of a conflicting Constitutional provision, the courts have no choice but to enforce the statute Congress passed.

Correction: American Arbitration Act (aka AAA).

Wikipedia disagrees: https://en.wikipedia.org/wiki/Federal_Arbitration_Act

Yikes! I stand corrected. Thank you. I was confusing it with the American Arbitration Association.

The courts do, or buisinesses who lobbied congress for the mechanism do? Speculation, I don't actually know how this sausage got made, but I imagine it had a lot of grease from big companies.

The prevailing narrative is that the court system is somehow constantly overloaded, so everything from settling out of court to plea bargains to private arbitration are favored.

You don't need to couch this in conspiratorial terms: it's not "the prevailing narrative", courts ARE overburdened. The "somehow" is that they are underfunded and understaffed, because creating more judicial resources means spending more money and often raising taxes, which no one wants to do.

Everyone wants more judicial capacity, no one wants to pay for it.

Im a lawyer, you may be one too as we are a dime a dozen, but if not here is a dirty little secret...

The courts don't care what your litigation costs are, the only thing they care about is having as few cases on their docket as possible (i.e. They care about their own costs and their own workload).

I read it as it was a lower cost to the courts, not the litigants.

Nobody is saying that arbitration shouldn't be available, or an option. What is being ragged on is the idea that a company should be entitled to put a mandatory binding arbitration clause into a contract that isn't negotiated, that in reality, a consumer has zero power to change.

Well, that makes about as much sense as this comment being subject to section 1201 of the DMCA, due to it's double-ROT-47 encryption.

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