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Comment by dwyerm | Hacker News Reader

I was offered over $1000 off to 'just sign the damned contract', but still ended up walking. I was fortunate to find a different dealer that didn't have an arbitration clause, though. I fear I wouldn't find that next time around, and was really hanging my hopes upon legislation like this.

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I'm going to ask what might be a dumb question, because I don't know any better. But is there any statistical evidence that arbitration results in worse outcomes for the consumer, or is all the hate theoretical for now? People on HN and otherwise speak about arbitration like it's an auto-loss for the consumer, but it's not like our court systems are guaranteed to be much fairer.

EDIT:

It looks like the bottom of the article explains that the US Consumer Bureau studied arbitration and found it anti-consumer:

As arbitration clauses appeared in tens of millions of contracts, the consumer agency was specifically mandated to study arbitration under the Dodd-Frank financial law in 2010. That effort culminated in a 728-page report, released in March 2015, that challenged longstanding assumptions about arbitration.

The agency found that once blocked from suing, few people went to arbitration at all. And the results for those who did were dismal. During the two-year period studied, only 78 arbitration claims resulted in judgments in favor of consumers, who got $400,000 in total relief.

The normal system is that these civil disputes are done in a court of law. Justify the change.

The siren call of tort-reform by any other name...

Per the article: "During the two-year period studied, only 78 arbitration claims resulted in judgments in favor of consumers, who got $400,000 in total relief."

It's not clear what the denominator on that sum is, though it is also stated that the rate of customers taking up arbitration was very low

Did the study compare those outcomes to outcomes when taken to trial?

You've found the data, but it's not surprising at all given the circumstances -- the arbiters are chosen by the company, so they know where their bread is buttered. What's more, class-action suits are just impossible under forced arbitration and who's going to go through a long process that will cost thousands because they got ripped off for a hundred bucks?

Arbitration is also secret, so it's very difficult to gather data about its results.

Thanks for giving me another reason to buy only used cars!

In my case it was a used car. It was, however, a manufacturer's dealership. On the other hand, the dealership without an arbitration clause was also a dealer for the same manufacturer.

Arbitration clauses with dealers seem decidedly less evil though.

The loss of class action status is terrible and enabled atrocious corporate behavior.

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