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AT&T Arbitration Clause Ruled Unconscionable
Tech.Luver writes to tell us the Consumerist is reporting that a small clause in AT&T contracts has been ruled "unconscionable" by the 9th circuit court of appeals. The clause in question stated that if you use AT&T service you surrender your right to class action lawsuits and instead have to participate in mandatory binding arbitration.
No, binding arbitration is NOT of benefit to both sides of this particular contract, nor of many similar contracts.
For most consumer services, such as those offered by AT&T, the amount of any dispute is likely to be too small to make it worth anybody's while to go to arbitration. Yes, it would cost even more to go to court, but the fact is that the consumer isn't going to recover enough to cover the costs of arbitration, any more than she would recover the costs of litigation.
Therefore, even if a consumer can afford it, the only way she is going to bring up such a dispute is as a matter of principle... and there's not even any incentive to do THAT, because the point of bringing up a matter of principle is to punish somebody for wrongdoing, and the amount recovered by arbitrating a single dispute would mean nothing to a huge player like AT&T unless many, many people went to arbitration, which everybody knows they won't... especially since AT&T's costs for arbitrating thousands of nearly identical cases are far lower than consumers' costs for arbitrating those same cases one-by-one.
Forcing everything to be arbitrated on a case-by-case basis would mean that the cost to consumers of recovering whatever they've been screwed out of was hundreds or thousands of times the amount recovered. Which means that nobody would actually get compensated, nor would AT&T (or whoever) ever suffer enough costs to deter bad behavior.
That's why there are class actions... they're there so that the larger party in this sort of situation can't just change the rules at will, ignore the other terms of the contract, screw over the other parties, and suffer no consequences whatsoever.
So, basically, to be opposed in principle to class actions is to say that people screwed over by large corporations should get no recourse at all. Maybe the corporation has to worry about its reputation, but it will never be FORCED by law to live up to its contracts the way you or I would be.
That is unconscionable. It puts large players above the law, it is basically a return to feudalism, and it is repugnant to any decent person.
Fuck you, you corporate cocksmoker.
I've also heard the critique that arbitrators may not be completely impartial. I think they are not randomly assigned, like judges can be, but instead are hired by the parties. Now consider: big companies try to use arbitrators a lot, while any given individual will rarely if ever use one. If you're an arbitrator who rules against a big company, how much business is that company going to give to you in the future? If you rule against an individual, how much does that hurt you?
Therefore in the arbitration system, there is an incentive for arbitrators to rule against individuals and in favor of big corporations.
This is the way Bi-Coloured Python-Rock-Snakes always talk.