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Arbitration is largely a scam, though. Companies use it to avoid having to go to court where they might lose.

Edit: as a commenter downthread reminded me, I forgot to add "in the US" to this comment.

Further, in civil arbitration you must pay the arbitration agent. If the other party fails to pay the agent, they report it to the court as failed arbitration and the case is dismissed. [ Harvard Law Review ]

A world outside the US exists.

In Germany E.g. arbitration for disputes with insurance companies is free and not organized by the company in their TOS but backed by the law, E.g. in insurance.

In the US, arbitration is purely a contractual matter between the parties. So, typically, companies (almost all of them these days, it seems) will require the use of arbitration instead of the courts. And they usually get to choose the arbitrator, who derives a great deal of income from that company.

There is a lot of economic incentive for arbitrators to find in favor of the company. There is very little economic incentive for them to find in favor of the person who has an issue with the company.

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