Of course, that's trading justice for money, which most people would agree is a terrible idea. Of course, that isn't reflected in the actual state of the law.
There are parts of forced consumer arbitraiton that companies do not like, but there's too much upsdie to precluding class actions. Things companies don't like include: the high up front cost and the lack of appeals.
There's nothing legally preventing arbitrators from being vehemently pro-consumer. The incentives prevent it but, legally, an arbitrator could award a crazy amount of money to a consumer on a tenuous basis and there's little that could be done. It's interesting that no such examples exist, however.
There are obvious incentives for the arbitrators to favour the people paying them - individuals are not going to be doing a lot of business with them, companies are.
He says exactly that in his comment. There is no law stopping them from doing it.
In my haste, I read that as "there is nothing stopping them from being pro-consumer, so there is no reason to assume that the judgements favour the businesses" for some reason.
One contract along those lines that I saw basically goes like this: each party picks its own arbitrator (presumably biased toward that party, whatever). Then those two arbitrators together select a third arbitrator, who will actually arbitrate the dispute.
Of course that's not what binding arbitration clauses look like, at all.
Are the arbiters really hired by the company?
As for the hiring part - the business pays most of the arbitration fees, but the consumer is on the hook for a nominal amount plus any attorney fees and potentially extra costs like expert testimony.
However, what Amazon does here is just wrong.
Arbitration is legal because of freedom of contract.
There is nothing "obviously terrible" about arbitration per se. When it is included in a freely negotiated contract between parties of equal bargaining power it is hard to find anything wrong with it.
The problem is when the parties do not have anywhere near equal bargaining power.
[1] https://scholarlycommons.law.case.edu/cgi/viewcontent.cgi?ar...
I'm talking about consumer arbitration, which is as you say, inherently unbalanced. Yes, I'm sure there are situations where it's a good tool and I'm not saying ban arbitration completely, but right now we can see the damage from it being misapplied.
That is, there is no benefit to agreeing to it at contract inception, if it were as stated: cheaper and impartial, i.e., a better court.
Indentured servitude is just contracting. Do you think it should be legal too?
My point is that because it is implied by freedom of contract, it is by default legal until we decide to make it illegal.
No, it's legal because of the Federal Arbitration Act passing in 1925. Prior to that, waiving of such rights "in advance by agreement" was explicitly disallowed, as SCOTUS determined in Insurance Company v. Morse (1874).
This is terrible because it leads to unjustly excessive punishment for smaller crimes if someone wants to exercise their right to trial, and people being told to just take the deal when innocent because a 1% chance of 10s of years of prison just isn't worth the risk when the alternative is you are out in months, for example.