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Amazon Payment Adds "No Class Action" Language To Terms of Service
wbr1 writes "I just received an email from Amazon Payments, the Amazon competitor to PayPal, stating among other things, that they were changing and simplifying their policies. It should be no surprise then, that similar to what PayPal and many others have already done, they have added language removing the right to class action lawsuits. See specifically section 11.3 (edited for brevity): '1.3 Disputes. Any dispute or claim relating in any way to your visit to the Site or Seller Central or to products or services sold or distributed by us or through the Site or Seller Central (including without limitation the Service) will be resolved by binding arbitration, rather than in court, except that you may assert claims in small claims court if your claims qualify. The Federal Arbitration Act and federal arbitration law apply to this agreement... ... You and we each agree that any dispute resolution proceedings will be conducted only on an individual basis and not in a class, consolidated, or representative action. If for any reason a claim proceeds in court rather than in arbitration you and we each waive any right to a jury trial. You and we also both agree that you or we may bring suit in court to enjoin infringement or other misuse of intellectual property rights.' This is becoming more and more common, and while the end user normally doesn't make out well in a class-action suit, large settlements do provide a punishment and deterrent to corporations that abuse their power. The question becomes, what do we do to fix this so that consumers are truly protected?"
(IANAL). The UK uses the English rule loser-pays costs system. Thus, if you're sure that you're going to win, you don't need to worry too much about attorneys' fees. If you have a case that will clearly result in a judgement of £10,000 and will cost £50,000 per side to litigate, then the defendant is going to end up out £110,000, and you'll end up getting £10,000.
The US, unlike almost every other country in the world, uses the American rule, where each party pays their own attorneys' fees regardless of outcome. Thus, if you have a case that will clearly result in a judgement of $10,000 and will cost $50,000 per side to litigate, the defendant will end up paying $60,000, but you'll end up losing $40,000. To make matters more difficult, this means that a defendant under threat of numerous small suits can intentionally make the litigation as expensive as possible for both sides: while it makes it more expensive for them, it makes it so that the plaintiffs will end up losing money on the case even if successful.
Small claims can help somewhat, as it doesn't allow attorneys, but even so, there are costs involved for the plaintiff. Thus, if a company cheats a few hundred thousand people out of $50 each, none of those people have any recourse in the courts that won't cost them much more than they'll gain.