> In the end of my response, I counter-offered 80% plus arbitration filing fee reimbursement. The next day, they responded back with an acceptance and sent over a release form. Case pretty much closed.
This is so depressing - it cost him $200 to get to the point of arbitration in the first place (lucky for him that he had $200 to file it in the first place), _and_ he didn't even get the total amount back, he get less than $1500 rather than the $200 he likely should have got.
For anyone who claims "just take them to court" or "just sue them for breach of contract" - this is what you're looking at, getting back 75% of what you expected after paying for their complaints procedure.
Judging from the article negotiating was fast, indicating that OP probably could have concluded on more advantageous terms. I enjoy these negotiations but OP’s process was swift and relatively painless. Probably a more economical use of time.
> After about five calls of runarounds, I realized that customer service channels would not help me and I had use the legal system.
> I filed a case online for $200
> Two days later, I received a response <..> I respectfully declined.
> A day later, I requested a 3rd party pre-auth to find an outside plumber.
> I counter-offered 80% plus arbitration filing fee reimbursement. The next day
By my count, he called them 5 times, threatened (and followed up with) legal action, and took 4 rounds of negotiation all to receive less than he was entitled too.
Also, I don't blame OP at all here - they did a fantastic job of handling the situation they were in, but it's a shitty system that allows them to be caught like that in the first place.
As the lawyer above said, they could have hired a lawyer to do the work for him and the company would have had to pay the lawyer. Alternatively they likely could have claimed for their time based on their hourly rate, also they should likely have claimed for the inconvenience of being without water for several days. I think they really went to light on the claims and that's likely also why the settlement was so quick.
I like your perspective. However, I have to make about that many calls every week just to deal with messed up bank balances, errors in credit card bills, etc. I spend well over an hour a week on stuff that in the late 80s and early 90s could have been taken care of with a single phone call to the institution involved. (I have several residences and small businesses so YMMV.)
On the other hand, that was purely due to his counter-offer being 80%.
Given the amounts we're talking, there's basically no difference between $1500 and $2000 for a big company - the entire process already cost them as much, and continuing said process would keep costing them more especially as it's a clear-cut case of breach of contract they are unlikely to win regardless of how much time they spend on it.
If they didn't believe he had any ground to stand on, they would've declined immediately regardless of how low his counter-offer was. Given that they accepted it immediately, they knew they were in the wrong and would've accepted a repayment of the full amount just as well.
AAA arbitration costs a company about $3,000 (and the costs of an attorney they hire). Some may/will pay nuisance settlements if it’s the economically rational play—even if they think the claim is bogus. Although, to be clear, this claim sounded very very legit. (Candidly, I would have pushed for a much higher settlement. But don’t blame OP for not wanting the headache).
There’s some interesting arbitrage opportunities in this space. I have the legal (and arbitration) experience. I’ve been noodling on how to marry it up with a tech-minded individual to capitalize on these opportunities.
Sounds like an interesting opportunity. Some ideas immediately come to mind. I'm a previous founder and CTO/CEO. Feel free to reach out if you're interested to discuss. You can find my email in my profile.
He asked for $1800 and accepted 80% plus the $200 filing fee, so he got back $1640, so it cost him around $360. --I'm guessing his deductible would have been in the $100-200 range, so, yeah, he ate $160-260 rather than spend the time going through arbitration, but it's perfectly fair for him to consider the cost of his time in determining whether or not it made sense to continue fighting.
In the end he still comes out ahead since it looks like a normal sized electric water heater runs around $500 plus the cost of installation and repairing any damage from the leaks.
By the way it’s basically never true that you have to start with arbitration. You can pretty much always just sue them in a regular local court. As a general rule courts are general jurisdiction venues that can hear all controversies.
Then they would have to affirmatively file a “motion to compel arbitration” in which they appear in court and argue that the contract mandates it.
Typically they’d win that motion but then you’d just start arbitration. Since that requires them to show up with a lawyer by that point you’d probably be able to just negotiate then. And if they fail to ask for arbitration in a timely way the case may proceed.
In this case, OP almost definitely could have sued In court, and the company couldn’t stop them.
AAA arbitration has a rule that says if your claim can be filed in small claims court (typically 5k or less) then you can force the company into small claims court, and they can’t force you to arbitrate.
Filing an actual case might be more work and not even that much cheaper. If the arbitration process is $200 and easy to file online, then that sounds preferable.
For consumer arbitration, always try to choose JAMS instead of AAA. JAMS arbitrators tend to charge much more than AAA arbitrators. Many JAMS arbitrators have judicial experience, some even on the federal bench.
In my case, all of the arbitrators proposed by JAMS would have charged over $1000 per hour to resolve my case. Per the contract, all arbitration costs would have been borne by the defendant, so the company was eager to settle and avoid a huge arbitration bill.
I’ve done something like 500+ consumer arbitrations in the last 5 years. JAMS tends to result in better outcomes for the consumers.
There’s all sorts of reasons for this. If nothing else, JAMS arbitrators tend to be retired judges with experience in the adjudication role.
More often than not, AAA arbitrators are just attorneys with 10+ years of experience. And, well, let’s just say 10 years of experience as an attorney does not automatically make a person competent.
If nothing else, I hope folks will run with your first point. Far too many people are scared of arbitration, and it can be a really powerful tool for situations like this. It’s fairly accessible and straightforward, especially for folks in the HN crowd.
One pointer for other folks in the future is to make sure you look into your state’s specific consumer protection law. (Sometimes called UDAP law or deceptive practices act.) Often times, these laws will allow you to recover more than just your out of pocket damages to punish companies that are deceptive.
One other way to “enlarge the pie” in situations like this is to hire an attorney. I know, it sounds like I’m shilling for my peers, but hear me out. This same UDAP consumer protection laws let you recover attorneys’ fees as part of a judgment/win. If you’re not an attorney, you simply can’t seek those.
So let’s say your claim is $2,000. Under those laws, maybe you can “treble” (triple) your damages if you win. So now your best day is $6,000. And the company knows it.
But if that same law says you can get attorneys’ fees too, the company knows that they could be facing a 50k+ judgment at the end (almost entirely comprising attorneys’ fees), and then that often incentivizes earlier, higher settlements. My involvement in cases, and the threat of attorneys’ fees often results in higher settlements than my client would get on their “best day,” and even after paying out my portion. (I typically do these on contingency — I don’t get paid unless you get paid).
Lastly, let’s just say I’ve done an arbitration or two with a home warranty company. They don’t make money by paying out claims!
The $100 valve-turning story never quite worked for me and I finally figured out why.
It's not that you're paying him $100 for the expertise to know which valve to turn, it's that there's no one standing next to him who could reliably for $50 or even for $99 know which valve to turn.
You're not paying for his expertise so much as for the scarcity of his expertise.
Do people still write software for discs outside of console games? I don’t think this comeback is very clever either way. Being paid $100 for a product worth $1000 in total sales is pretty reasonable. Being paid $50k to resolve a $2k seems to be a very unusual outcome. It just raises the stakes of the case by 25x.
It seems very unreasonable that a losing party could need to cover so much from their opponents end especially as they get no say in the total stakes.
If it was you paying $50k to your lawyer regardless of whether or not you won, sure, that’s just your choice. This is a $50k extra being thrown at your opponent and there’s no incentive to be reasonable about it because it sounds like your own client doesn’t get hit with it. Idk if it applies in this context but if it goes both ways then you’ve got a prisoners dilemma. Spending more on lawyers increases the probability of winning, but also increases the total pot of lawyer money. That’s so fucked up.
I would vote for you’re liable for at mode the amount you spent on lawyers personally. If they do 50k on a 2k issue and you don’t even get a lawyer, you may lose 2k but they lose 50k. Incentives to escalate lawyer fees sounds stupid as shit to society.
> Being paid $50k to resolve a $2k seems to be a very unusual outcome. It just raises the stakes of the case by 25x.
You are paying for protection of consumer rights, not to be lied to and not to be swindled. What are those rights worth to you?
As a company you always have a chance to come to amicable agreement with the customer before the lawyers got involved. Every time you tell a customer to piss off you take the risk that they might take you to court.
As explained elsewhere, the fees are contingent. You’re not paying the 50k at all, unless something unexpected happens, in which case you’re suddenly paying 50k which you were told wasn’t going to be your problem.
But it’s really bad that it’s ok for lawyers to basically encourage you to rack up contingent lawyer expenses. It’s just a toxic system.
But that’s still shit. The lawyer is incentivized to charge as much as he can because the person hiring him isn’t the one who pays it. That’s fucked up.
So what's your solution so that large enough companies that they have lawyers on retainer don't just ignore any $10,000 or less liability, if you in fact think that a 5x multiplier in lawyers fees is excessive?
That software didn't magically appear. The development had a cost. The software itself has a value that purchasers provide to the seller. You aren't paying for a medium with some random bits.
This is the way the justice system is set up. I don’t really dig into whether this is a systemic problem.
I’m not charging my client 48k. I’m recording my time spent working the case. If I have to spend 100 hours working on a case, and my hourly rate is $500 an hour, and we win, then the attorneys’ fee award should be $50,000, regardless of whether the claim is $100 or $100,000.
This is an important component of civil rights litigation. Often times does claims have small value (in terms of damages). But we want to incentivize competent lawyering, and so, if you prevail, you get an award of attorneys’ fees.
The same is true in this context. If you don’t have a provision like that, then consumers are left without recourse. As it is, there are very few lawyers who practice in this area as is.
No. It’s a contingency fee. My client isn’t paying me hourly. If we lose, we both get $0. This is how lots and lots of plaintiff litigation works, if you’re not familiar. Those guys advertising for car accidents on billboards are not charging you an hourly rate.
As plaintiff’s attorneys, we take cases we believe in, we spend our money to prosecute the case (I almost always pay that $200 AAA filing fee for my clients), and then we get paid out on the back end. In my personal opinion, it’s a much more appropriate compensation method, because it puts our interests firmly in line.
Based on the very limited understanding I have of this case, if we settle, I’m targeting a 10k settlement and taking a percentage of that (a percentage smaller than the client), and so my client is getting 5k+.
don’t charge $1000 an hour, because, ultimately the fee charged must be “reasonable.“
Now, as a boy who grew up lower middle class, the idea that an hour of my time is worth $500 or more as part of these calculations is something that I still struggle with. But my rates are in line with my peers, what the system considers to be a reasonable rate, and consistent with my experience and education.
But at $1000 an hour, most judges will call BS. Again, I didn’t make the system, I’m just surviving in it
Since you work on contingency, the $500/hr is also compensating you for the risk that it will turn out to be $0/hr, right? Or do you pretty reliably get to a settlement that involves your full fee being paid?
Many jurisdictions outside the US do (much more readily) award fees so that the loser has to pay the winner's legal costs.
The disadvantage of it is that if you're just some guy against a BigCo, then instead of risking having to pay your own $50k lawyer bill you're potentially risking having to pay their $5M lawyer bill.
Fees can be capped by offering a settlement. The court will not allow you to ignore a reasonable settlement and then charge fees for work done after. “Reasonable” is defined by a better or similar outcome to what you got in the end by continuing litigation.
What about capping fees at whatever the party having to pay spent on their legal team, so the party choosing to pay more expensive lawyers for more hours is taking the risk on that increased cost vs. the other, and the less you spend on your side the less you're liable to pay if you lose?
We have a system where lawyers cannot charge contingency fees. I guess the rationale is founded upon lawyers being perceived as 'officers of court', and the expectation of ethical conduct. When money is a factor, boundaries of ethical conduct tend to be hazy. while you owe a duty to the client, you also owe certain duties to the court/tribunal and even to the adversaries- including duty of fairness.
It is interesting to note that while some of the U.S. rules of professional conduct states that a lawyer shall represent a client "zealously", such a requirement is missing in our code of conduct rules.
Well... I consulted a civil rights attorney about some rights violations. I was told that if the damages are really small, then the federal judges don't look favorably on reimbursing attorney fees.
On a side note, my experiences with the legal system is that it's a complete shit show full of incompetent and even crooked players (DA, police, magistrates, judges). If for no other reason, you have to hire a lawyer because a lawyer can more readily detect the incompetence, and the incompetent people are more likely to accept stuff coming from a credentialed person.
There is some truth to this. The courts are becoming hesitant to make the massive attorneys fees awards that were more commonplace in the past (1,000 damages and 200,000 in fees).
But, generally speaking, everyone is still on board for realizing that at the end of the day the attorneys fees award will probably be the biggest part of the award.
The fact is, as soon as judges stop giving out those attorneys fees awards, you’re going to stop having attorneys pursuing these civil rights cases. That’s the bottom line.
As a legal system, and as a society, we have to ask ourselves whether these civil rights violations are a priority or concern or not.
The goal is also to create an incentive for the company to behave appropriately (legally) in the future. A few low-cost losses is not going to do that.
The goal is social justice, not just individual justice.
High cost losses won't necessarily do that either.
The fallacy is that these transactions have to be financial.
They don't. Any number of other remedies - from jail time downwards - would provide a stronger deterrent.
Without strong deterrents and the threat of even more expensive class action - possibly leading to personal ruin - individual losses can be written off as a cost of doing business.
Generally the sanctions for bad behaviour are far too light, and strongly biased towards business owners over customers/victims.
The Sackler/Purdue story is a perfect example. Inconceivable levels of harm were caused - far more harm than a high profile terrorist attack. But the Sackler family is still worth billions. And no one is going to jail.
The goal is to produce a relatively low-cost way to resolve reasonable disputes while eliminating opportunities for fraud and bad actors.
A formal written complaint prior to filing for abitration might have been equally effective. Incentivizing escalation simply drives up the costs of resolving disputes.
"As a legal system, and as a society, we have to ask ourselves whether these civil rights violations are a priority or concern or not."
For "minor" violations, they are not a priority at all. At least that's my experience and what I was told by that lawyer as well. If nobody in the system will enforce or defend your rights, then do you really even have those rights?
> If nobody in the system will enforce or defend your rights, then do you really even have those rights?
Nobody is a stretch. They can be enforced, just at great expense. So some people can defend those rights; others can’t.
We can’t extend this to the latter not having the rights because people intervene on behalf of others’ legal cases all the time, there are non-profits set up to do this (e.g. the ACLU and EFF) and some wealthy retired lawyers’ pass times.
The police don't, the DA doesn't, the judges don't - they are the main actors in the system. The civil rights attorneys and ACLU only take on the biggest issues due to constrained resources. Same with the DOJ Civil rights division.
Supposedly their job is to seek justice. Trampling people right, even if civil offenses, is something they aren't supposed to do. In fact it's their job to not violate those rights and take steps to mitigate their impact if they do occur. Violating those rights can undermine any criminal case they're working on.
Are you an attorney with experience with color of law violations, or just a citizen with an idea of what "should be correct" in a court of law? The American justice system is extremely convoluted. It's already been explicitly explained to you that "Most civil rights violations aren’t criminal offences. It literally isn’t the police or DA’s job". If you think there is a chance of changing this through "color of law" violations, I highly encourage you to seek counsel and pursue it - it would be a massive win! But, any lawyer worth their salt would tell you that it would be an impossible case and that you have a massive misunderstanding of how the justice system works.
You're completely misunderstanding the conversation here.
Did you see the quote about "legally, not at all"? This is easily identified as false. There are criminal charges in at least 4% of civil rights cases.
On top of that, we aren't just talking about charging some. We're talking about the idea that protection of civil rights is part of the job for police and prosecutors. This is also easy to prove. Police are required to Miranda-ize before interrogation, the agency they work for is required to investigate IAD complaints without being hostile to the complainant, etc. Prosecutors are required to maintain Guiglio lists, follow Brady for exculpatory evidence, etc. These are clearly defined examples of where the actors are in fact legally required to take steps to protect one's civil rights.
Do they sometimes violate these? Sure. The point is that it is in fact their job to ensure they are not violating people's civil rights. The reason they get away with it is that there's no real oversight, and even the civil cases are overseen by judges who are also part of the system and inevitably have biases to support the other members of that system.
True, but US legal fees are quite literally off the scale compared to the rest of the world. There isn't a country where lawyers siphon off so much, individually and collectively.
I don't know. I'm an expert (at some things, anyway), and I make $68 an hour. Maybe an attorney isn't billing 100% of the time, but if they billed six hours a week they'd make more than I do. That feels like a lot of money.
I assume that's your wage from an employer, and that's a totally different number. If that's your freelance fee, you are seriously being underpaid. After paying taxes, fees, insurance (both personal and business), anything less than $200/hour for skilled labor (not even expert professional) is a steal.
That's a good point; I'm not a contractor. I doubt my total compensation comes anywhere close to $200 an hour, though. When I was briefly a contractor last year I believe the total amount paid from the contractee to the contracting firm was closer to $150 an hour.
I think my pay is normal for my title ("ML engineer"), location (Cincinnati), and experience (master's, 10 years in the workforce). Though I wouldn't turn down a substantial pay raise ...
What region are you located in (approximately)? I have some intuitive idea that compensation differs according to location, but I haven't done any in-depth study into it.
I was a contractor from 2013-2018, though at that point I was more a generalist than I am now. I don't know what USAF paid my company for me but my take-home maxed at $29 an hour, so $98 would have been more than sufficient. With my paltry raise this year compared to inflation I'll be back to my old pay in real terms before you know it.
No, your total comp is probably no near 200, but what if your company was farming your work out? How much would they charge the client for your time? When my small company brings in consultants, it's usually at $100-150 per hour. $200 would be a tough sell, but it's not outside the realm of possiblitiy. $500 is a lot, but but lawyers usually produce results, and as described here, they don't get paid unless you do, so they have to make up that money somewhere.
You almost certainly pay far more than 68 an hour for a doctor! (How long are you actually with the doctor?). Plumbers and mechanics are paid at a significantly lower rate than doctors and lawyers!
I have no idea? Brain fart. doctors also get paid by the procedure, so charge less for simple office visits (it’s complicated because of how medical billing works)
Yes I do. I've had some lawsuits in the USA, some in Europe and the cost of the US lawsuits absolutely dwarfed the ones in Europe.
It's not that $500/hour isn't 'insane' (it actually is, but that goes for the profession as a whole), it's how much time ends up being billed for a case and US lawyers really are experts at running out the clock, and working the system to the point where the legal fees themselves become a weapon in the case (see the excellent examples in this thread illustrating that).
Oh, and to add to this: I also had the distinct feeling that in the US I was often billed at 'partner' rates when the work done was at 'paralegal' level and I always wondered what would happen if you were to audit a large legal office to see if there was more partner time billed than there was partner time to begin with.
I mean, if the company thinks the consumer’s lawyer is a clown, then they’re going to assign a probability of having to pay those attorney’s fees at or near zero. Then you’re back to them valuing the case lower.
But I also get/agree with your point. Please don’t read any of my comments here as an impassioned defense of lawyers or the legal system in general. Just, generally, having a competent lawyer, can drive better outcomes in these cases.
To illustrate: I had a spat with a big dutch telco provider for a 6 figure sum, they gave me the runaround and 'what are you going to do, we're big and you're small' until they got a letter from one of the largest legal offices in NL and they folded on the spot and paid up.
Better lawyers really do drive better outcomes. If the other party is worth suing (a calculus that many people seem to skip).
Well, an incentive for costly lawyering might translate into an incentive for competent people to go into the profession, which does incentivize competent lawyering.
Also, since the counterparty is basically making a financial decision (rather than a moral decision), costly lawyering is competent. The price is part of the service.
It incentivizes lawyers who prefer expensive lawyering.
Competence is an orthogonal question.
Lawyers are basically mercenaries engaged in trial by combat, abstracted to an exchange of relevant facts and opinions.
It's not obvious that a battle between mercenaries is the best way to get a just result.
Considered systemically, lawyers also control legislation.
While it would be better for consumers to have much stronger protections, the people who make money out of weak protections are not incentivized to argue for stronger laws which would reduce their billable hours.
But those profits that you are generating are ultimately passed onto the consumer. They just don’t materialize out of thin air on a companies balance sheet.
Just take a look at what is going on in Florida with litigious , shady roofing contractors, they have nearly collapsed the homeowners insurance market.
Also, that's Florida's government being incompetent as usual. Also, no homeowner insurance company can be profitable in the long run (a decade) in Florida with rising sea levels, climate change, and other compounding factors.
The flip side of this is that the sometimes the judge will not award you attorney's fees even though it's a reasonable ask. I've sued companies three times in my life, and only one out of those three times was I awarded attorney's fees, even though it was requested all of those times.
Not to go into too deep of details, I'll also say if you ever do business across an international border, even with a company that is headquartered within walking distance of where you live, they /will/ find a way to weasel out of responsibility, even if they have a signed contract saying they're responsible. Once any sort of business crosses an international border, the only way you can hold a multi-national company responsible is if you represent a government that is an ally of the US and can bring to bear full military force, otherwise they /will/ screw you over.
In fact, the primary component of my debt post-college was paying back attorney's fees for cases I had won (or had won / appealed several times until I settled because I could no longer afford to pay for attorneys).
Personally, I am a major supporter of the idea we should have it be written into law that the party that doesn't prevail is responsible for attorney's fees for both parties automatically. That said, I also understand that this could be disastrous for smaller entities suing larger entities if they lose (to which I mostly say... don't file frivolous suits).
Lots of good thoughts here. All I'll say/add is that there is a wide chasm between a losing suit and frivolous suit.
There are legal issues that I will argue the exact same twice, and, depending on the judge, win one and lose one. If I have to pay for the attorneys fees of the other side for the one I lost, I'll be filing 0. No justice for anyone.
Sounds fine an dandy when it's "stick it to the big evil corp that has revenues in the hundreds of millions", but a side-effect is that it'll make insurance and legal costs higher for smaller (and potentially very honest) companies.
And in the case that they did do what was obligated and win the case with 100 hours worth of lawyer time spent? Will the small party pay the lawyer fees for the company?
Their lawyer would spend some time regardless of whether the other party's lawyer was there or not. Sure, they may have to answer some filings or produce something (I don't really know the rules and procedures of arbitration) but again, a competent person without an attorney would come close to that anyway.
If the lawyer loses on contingency after spending 100 hours, nobody pays them; that lawyer eats the loss.
I've been thinking about it, and I think it's mostly a balancing of the scales - the company sets the initial terms of the contract almost every time, and has a completely disproportionate amount of power in the relationship. This is a bit more of a spin the other direction, but it still doesn't quite get there.
Yeah, it's fucked up, but it's a response to the company being able to do more things that are fucked up and doesn't come out of nowhere.
> So let’s say your claim is $2,000. Under those laws, maybe you can “treble” (triple) your damages if you win. So now your best day is $6,000. And the company knows it.
This is one of the most eye opening things I've read on here. I didn't know that about arbitration. When you threaten/enter into arbitration, it should be part of the law that the company must respond with the maximum amount of damage they're liable for. Anything else is information asymmetry towards the company and they know that too.
I like this suggestion. There is a substantial lack of attorneys in this area. If we are going to force consumers into these systems, they need to be designed more fairly.
Think of it like a mortgage - I got a 90 page legal document when I purchased my home (and I received multiple physical copies of it....) but on the first page of it was "here's how much you're borrowing, here's how much you will repay over the lifetime, and here's the fees if you pay it back early", and I had to sign that page individually with the rest of the agreement. It felt a bit silly, but it _forces_ the service provider to give you this information in an honest format, and not bury it in the small print 5 levels of indirection deep.
And the only reason you get that information is because of federal consumer protection laws.
If nothing else, an experienced consumer protection attorney brings that to the table—knowledge of these various laws (and how you can sue under them) that you might not even know exists.
I think that point is about as fair as saying the only reason it got so complicated in the first place is because of federal consumer protection laws that enable banks/lenders to get away with such complex agreements to begin with. Otherwise you'd have competition that exists solely to correct the complexity of our current financial system.
No it isn’t. Because we had centuries of no consumer protection. And there were no competitive pressures to simplify agreements.
Consumer protection laws that forced companies to simplify agreements were a response to the massive increase in complexity without such laws being on the books.
But there’s an even easier, non historical, way to see how “competition” does nothing to solve the problem of complexity in agreements.
The agreements to rent an apartment, or to buy a house, both of which are among the most complicated agreements the majority of people will sign, are far more straightforward in most states than buying a $2 song off iTunes or signing up for a 1 month membership off Spotify.
There is a lot of evidence that consumer protection laws have had massive effects in making the agreements more standardized and transparent and reducing shady and fraudulent behavior.
It's worth noting that a lot of consumer protection laws are 50 years (or less) old. Many were born from the great recession less than 15 years ago.
To your point, this is all pretty fresh stuff, and I think there will be more regulations in other areas. The regulations started with housing/mortgage agreements because they are such large transactions. But the same principles will hopefully trickle down.
>Because we had centuries of no consumer protection. And there were no competitive pressures to simplify agreements.
And we also had centuries of really simple (by 2022 standards) contract terms. Even if you just include the time after mass-literacy contracts didn't start adding tons of length until fairly recently.
I'm not sure when exactly the proliferation of additional clauses in otherwise pretty simple contracts started but I read a homeowner's insurance policy from the 1930s and it fit on one page.
Of course it did. If it was printed, at the time, it had to be standardized. So the simplest thing would be to make them all identical. At most you’d have a kind of “if this box is checked, clause A applies” set of customization.
Only major contracts would be subject to major customization with individual pages typed.
This tool that we love so much probably had a major reason why things got so complicated.
Personal theory (that I just thought up, so I’m sure someone else thought of it first): complexity is like a goldfish. It grows to take up all available space in a system. If a system can handle more complexity, more will always appear.
When we couldn’t adjust contracts for individuals because it was technologically not feasible, we didn’t and contracts were simple. Now that we can adapt things for each individual contract, or personalize each web page, insert targeted ads, etc… we do because we can.
That's a fair theory, but I would argue lenders like better.com are winning so much business is because they simplify the process. Their marketing is around that exact reason, as well. There's obviously competition in the space of making home purchasing less complicated, which leads me to reasonably believe less consumer protection from disconnected bureaucrats would result in less absurd complexity. I bought a house just a few months ago and I was on the hook for thousands of dollars before I was legally required to take a home purchasing educational course.
Only bureaucrats could think up such silly rules as to require people to take educational courses on buying a house and allow those courses to only be legally required after you've committed thousands of dollars to the seller.
If the market demanded educational material on how to buy a house (and it does, I've bought a book on real estate for that very purpose before buying my first home) then you get incentives that make sense.
I didn't see a credit score disclosure on better.com's view rates page, but assuming the best score level if you go to bankrate.com and look at the scenario 500K 20% down 740+ credit it shows almost a $50K+ difference over the life of the loan between their quote and the lowest quote on bankrate. Not that they're the best place to find quotes, just it's easy to see multiple rates.
> There's obviously competition in the space of making home purchasing less complicated
How much competition? I've hardly even heard of better.com. Certainly every time I've bought a house (three since 2003, most recently in 2018) I've had to sign an unreadably long contract, and I don't recall much if any advertised competition in the "make it simpler" space.
I'm also not sure I buy that the complexity of the process came down to consumer protection laws, though I'm no expert in that area.
> I would argue lenders like better.com are winning so much business is because they simplify the process.
I feel like if somebody picks a lender and gets sent a stack of paperwork, they're committed. They're not going to back out "because the paperwork is too complicated" and choose a competitor, and ask their sales people "How long is your paperwork?"
So I'd be skeptical that "complexity of the legal agreement" is at all a factor.
I wouldn't be so sure about that, they've had 3 rounds of layoffs in the past 4 months, one of which was 1/3 of their workforce[0]. They are also accused multiple times of stiffing employees on severance pay[1]. Not to discount everything else you've said, but please don't use that company as an example of winning.
[0] via layoffs.fyi, filter companies to "Better.com"
We still can't adjust contracts for individuals because organizations are afraid that they'll wind up in court because "if what I wanted was stupid why did you let me buy it?"
The difference between now and then was a bunch of lawsuits that added more terms to the contract so it was "clearer" and people couldn't win a lawsuit because it wasn't in the contract.
That's just not how the market worked out during the sub-prime mortgage market. 5% prepayment penalties, Arms with massive rate hikes, neg Amortization loans that ate up your equity. no document loans, no income/asset loans. shopping appraisers to get the most inflated loan amount. all kinds of bull shit fees and higher interest rates for more bullshit compensation. The documents were not any smaller. Most of those documents are there to either make it easier for the lender or protect them in some way. Most people don't have phds in finance, legal, psychology to compete with the army of lawyers, accounts, quants, sales people, marketing people that all work day and night to take your money in the most favorable terms for them possible. Not to mention the boom and bust cycle that imploded the market in the first place. In the end we'd probably end up with some kind of marketplace similar to the app store with 30% fees.
The problem is the courts letting banks/lenders get away with such complex legal agreements. We're straightforwardly bumping against computational complexity, but the legal system continues to ignore this. A reasonable alternative decision would be that a 90 page document is simply not understandable by the common person ("equal protection under the law"), and therefore is not part of / evidence of a binding contract.
The disclosure laws actually help the banks here, by putting the most important terms front and center where it can be argued that the borrower did understand those even if they couldn't understand the rest of the document. In fact many legal documents are structured in such a way, putting the big picture at the top and then defining/clarifying things later.
As far as your general point, what helps is printed materials by the state that lay out general legal advice. For example, take a look at the wonderful California Tenants Guide.
Another thing that would help would be a public standardization of common consumer contracts. There is no need for every lease/employment contract to have its own custom verbiage that a tenant/employee is purportedly responsible for understanding. There should be at most a handful of standard contracts for common relationships, drafted and published by the government. There are already some of these things published by industry groups like landlord's associations, although they can be a bit biased towards their members. Not using a standard contract or lengthy typeset additions should be judged as an a priori attempt to mislead that no amount of initialing will undo.
Furthermore, putting terms in a contract that are blatantly contrary to prevailing law should itself be illegal with its own penalties apart from enforcement of the contract.
Of course the paperwork pushing lobby isn't a fan of such reforms, and will lobby against them by framing such things as "big government" even though they're better described as mitigations of "big government". There is lots of money to be made by perpetuating government dysfunction and then providing a half-solution. See also: Intuit vs tax filing reform.
> take a look at the wonderful California Tenants Guide.
I've never once heard people from California praising their state for making renting better. I've heard the exact opposite many times over.
Everything has tradeoffs. Every complexity the state forces into a transaction enables an exploitative company to leverage loopholes to their advantage. Only near perfect systems can reap the benefits of authoritative protections without inadvertently propping up exploiters who thrive on working around the complexity. Something a smaller, (likely more honest) company can't afford to do. There's a reason so many gigantic companies lobby for more regulation in their industry and I sincerely doubt that reason is to protect the consumer.
You're rejecting the idea that we can analyze a specific action/edict of government to see if it makes things worse or better. Such a paradigm guarantees that things can only get worse, as the only successful changes will be ones that enrich some well funded interest (ie corruption / regulatory capture).
> Every complexity the state forces into a transaction
I do not see how publishing a guide of public legal advice is adding complexity, regulatory or otherwise, for either party. If you would like to make a specific argument of how it is, please do so.
> I've never once heard people from California praising their state for making renting better. I've heard the exact opposite many times over.
There are incentives to spread the negative/political messages, whereas the gains from repeating helpful individual-empowering advice are diffuse.
> I've never once heard people from California praising their state for making renting better
Let me fix that for you. As a renter in California I had a Landlord who tried to hold on to the bulk of my security deposit (a few thousand dollars) for repainting walls, additional cleaning, etc. The clear guidance in this tenants guide gave me confidence in dealing with the Landlord, clearly articulating my stance, and getting the vast majority of my deposit back. Other Landlords I had were very reasonable and refunded my full deposit without issue (I always left property in a good state) but when I had one that tried to play hardball the guide plus a couple of well written letters with appropriate references to the guide helped me sort out the issue relatively easily.
Making it clear what my rights were and setting clear expectations on tenants and landlords relative responsibilities was a clear benefit to me.
I’ve rented in CA as well as other states. CA rental protections were great for getting my landlord to back down from withholding my security deposit for illegal reasons.
There are good points here, but the equal protection clause has nothing to do with this issue. There are standards in contract law that apply (and are state-specific). Those could be statutorily changed.
> Furthermore, putting terms in a contract that are blatantly contrary to prevailing law should itself be illegal with its own penalties apart from enforcement of the contract.
I can't help but scoff every time I read in a rental contract that even if some part of the contract is nullified due to not being legal, the rest of it still applies. It always makes me wonder which part of it they thought might not be enforceable, although likely they probably all include since it costs them nothing to do so.
A slightly more charitable interpretation would be that they are trying to use a standard contract with terms which are both reasonable and enforceable in most contexts, while allowing for the fact that the rules about precisely what is or is not legal in a contract can vary from one jurisdiction to another and may be subject to a certain amount of interpretation. Also, something which was legal at the time the contract was signed might be changed to be illegal later. Either way, they don't want the entire contract to be nullified on the basis of one invalid term.
IMHO it mostly works out in your favor. If any of your obligations toward them are deemed unenforceable they are still bound to uphold the rest of the contract. The reverse could also apply, of course, but as the smaller and "less sophisticated" party to the contract your obligations are more likely to be nullified by local consumer protection rules than theirs.
Normally I might agree with you, but after dealing with this landlord for six months...I don't think that a charitable interpretation is warranted. I won't bother going into details, but there have been no violations on my part, and I can't say the same for them.
Agreements are written in complex language to make sure everything is as explicit as possible and that there are no loopholes or anything subject to interpretation. I've always argued that if the Bill of Rights was written today, each Amendment would be 50 pages long.
> Otherwise you'd have competition that exists solely to correct the complexity of our current financial system.
There's nothing stopping a company from doing this now. Consumer protection laws merely establish a baseline minimum. The market is still free to do better than the minimum.
There are two types of damages, actual and punitive, and for actual damages you set the value of the claim by .. adding up all the damage caused. This is how you can get really big numbers like $145bn. https://www.ncbi.nlm.nih.gov/pmc/articles/PMC1118202/
(That size of damages terrified various other companies with liability problems, who quickly got the law changed to minimize the range of things they could potentially be held liable for as a result of their products: https://en.wikipedia.org/wiki/Protection_of_Lawful_Commerce_... )
The flip side is it prevents aggregating all damages into a single class claim.
If everyone who had a claim actually arbitrated every time, it would be much more expensive for companies to handle than settling an entire class of claims all at once. The problem is companies know most people will not make a claim if it takes them any significant effort, and if the reward amount won’t be very large.
It becomes especially awkward when those companies have their bluff called, get an onslaught of arbitration claims, and then try to backpedal into a class action. “We were just using an anti-class action language because we thought that would scare away litigation but now we want it” is not a super compelling story to have to tell a fair judge.
This news article [0] is more recent. It seems they settled for more than 3x the figure in the original article. They also agreed to injunctive terms, the most noteworthy (to me) being "Bar Intuit from requiring users to re-enter data when they upgrade from a free product and then return to the free product".
Is there a limit on the amount of time a company can delay arbitration once you file? Is there any sort of "default judgement" mechanism that can be used against companies that drag their feet?
That's not arbitration though, that's a jury trial of a class action lawsuit. The UDAP law that the parent responded talking about (that I learned of today) specifically entitles you to up to three times the amount of damages you're claiming for, plus legal fees.
What do you think about the approach taken? ("I summarized the entire timeline into three sentences. I provided no evidence. I didn’t want to give my hand away before arbitration.")
Personally, I would’ve taken the exact opposite approach.
I once had an attorney, a very successful attorney, tell me that he’s a big fan of laying cards on the table right away. The rationale is that he either wants to know why he’s going to lose early or show the other party why they are going to lose early.
In a case like this, where it seems like OP has all the information to prove that these guys are simply in the wrong, I come out guns blazing. I Layout the whole timeline with screenshots and copies of emails, very detailed. Then I make the ask with some snarky closing line like, “if you’d like to avoid the inevitable judgment that will be rendered against you, please contact my office to facilitate payment.”
But negotiation is not a game of gotcha. It’s not as though you get a number, and then pull a rabbit out of the hat to get a bigger number. “But see this.”
You make a demand, and you justify it based on the facts and law, and then you stick to it or make minor concessions until you reach your end result.
As someone that settles personal injury lawsuits, this is exactly how the process works. I receive medical records, review them, and make an offer. When we negotiate, very rarely do we talk about the actual case details, it’s just numbers back and forth. If they say it’s worth more than I have it evaluated, I simply ask for more records or indicate that I have reached my best offer.
For what it is worth, it doesn’t affect me at all how much I pay out. It’s not part of my job objective to pay the least possible. If I can justify it, I can get it authorized.
There basically aren't any. I've gone through arbitration three times and each time both parties propose a hilariously stupid number and work towards the middle over 12 hours.
"if you’d like to avoid the inevitable judgment that will be rendered against you, please contact my office to facilitate payment"
The judgement may be inevitable, but a wealthy corporation may have the resources to keep the lawsuit in the courts long enough to bankrupt you or until you die of old age.
Adding an additional perspective. I'm on the board of directors of my condo corporation, and we have to deal with escalations from time to time for various claims, and threats of lawsuits, etc.
From what I've seen, a perspective of I've collected a bunch of evidence that I'll refer to, but not actually provide, does seem to correlate with those with baseless claims, or those possibly trying to scam the corporation. This is anecdotal from my experience, but has happened more than once. In this case, it might be slightly irrelevant, because the insurer probably has easily verifiably facts on their side to know the calls happened, and the computers were a problem, etc.
But something like the invoice that's being claimed, is an important piece of information. We may want to know what work was done, was it in scope of our responsibilities, call the plumber and verify their credentials, ask them for details not documented, etc. If we have any suspicion the individual is trying to defraud us, not knowing the evidence that supports the amount claimed makes it really difficult to agree to. And if this goes on for a long time, it may be difficult to follow up on those facts.
I don't know about the rules around arbitration specifically, but if this hadn't settled, there may be deadlines involved just like the courts. And anything your doing to make the other side unprepared or to ambush them may be held against you. I don't know that it means you have to lay out everything on day 1, but I wouldn't want to leave anything to the last minute and allow even an argument that I prejudiced the other side by knowingly withholding relevant information.
Hmm anyone from Spain familiar with this? I've claimed stuff with my regional consumo agency a handful of times (successfully) but most of the times it was <1K, so It was only worth the hassle because I was almost angry about the situation.
If I can punish companies for bad behaviour and harm their pocket this way, It would be much better.
Never got into the employment context. But wage and hour cases (FLSA) have made many a rich lawyer.
I will say, while I am generally not anti-arbitration, I do think it has its limits, and when it is used as a tool to suppress information that should be out in the public, I am completely opposed to it.
The Example I often use are cases where an individual is suffering severe sexual-harassment. If that person is forced into arbitration, unable to share their story (confidentiality required), and hamstrung in prosecuting their claims by the arbitration process, that’s a losing situation for the entirety of society.
Hey, thanks for this. As someone who just went through this process in December, there’s a problem: my contract had a sneaky clause in it that said both parties are responsible for 50% of attorney fees.
Meaning that $50k judgement would become a $25k bill.
Yeah, I was sad to realize that.
But! Your advice is absolutely worth taking anyway. I did, and the company paid me the moment I said I was starting the arbitration process. It was a bluff, and sometimes you need to be willing to bluff.
On the other hand, I was so upset at them that I might’ve just gone through the process regardless. So I guess it helps if you yourself aren’t sure whether it’s a bluff, since they definitely won’t know either.
Edit: I may have misunderstood your comment, but it sounds like maybe you were saying your contract with the defendant company required that you pay 50% of attorneys fees. If that’s the case, it would depend on details, but there would be a lot of arguments to make that not applicable.
I just re-read that comment, and had the same question. If the company is trying to include such a provision in its contract with you, such a provision, would be illegal, unconscionable, void against public policy, etc etc.
I’ve never seen anything like that in all of my arbitrations.
What you will see for B2B claims (not consumer claims) is an agreement that the parties will split the cost of arbitration. But that’s different than their respective attorneys please.
You're right. It says "Each will separately pay their own counsel fees and expenses." I was focused on the part that said "Company and Contractor will each pay one-half of the costs and the expenses of arbitration." Wouldn't a $50k judgement be considered an expense? I suppose not, but it's all quite confusing for non-lawyers.
The 50% clause was confusing enough that when I went to someone for advice, they mentioned that it would limit my upside. Here's the full advice I got from them. (They were relaying what their father said, who is a lawyer.)
> He said $10k is a little small to bother recouping Bc you might burn thru 20% just retaining a lawyer + covering half of initial arbitration fees
> And arbitration—if it happens, and if it’s extensive—will absolutely burn thru the rest
> He said your best bet was a friend or young out-of-law-school kid without a crazy hourly rate to help out, make a few calls, make sure the company is willing to move forward with arbitration
> But, if they are, it might not be worth it…
> Unlike mediation—where a neutral third party tries to guide the parties to a resolution before arbitration—arbitration is adversarial, involves a legal decision, and will require things like discovery (surfacing all the relevant facts + documentation etc.)
> He said arbitration can be as expensive + complex as regular ol’ litigation
> Grain of salt from a non-Washington lawyer who probably did most of his work in a different scale / context, but in case it’s helpful
> Your agreement says you half to cover half of arbitration costs, separate from your lawyer, unfortunately. Some agreements split cost disproportionally between winner + loser, but this one doesn’t (I think, skimmed), and even if it did it would be a risky / ambitious gambit
My read of that contract (and it's a pretty standard term) is that you're just splitting the invoices for costs/fees from the arbitration provider. This has nothing to do with respective attorneys' fees.
However, that can still limit your upside. If the arbitration fees are $5,000, then you're paying $2,500 win, lose, or draw, and so that has to be factored into your calculations.
If your state has a loser-pays law then the clause likely isn't enforceable. They probably know this and have a severability clause as well ("if any one clause isn't enforceable, the others remain in effect") and just leave it in to try and scare people into not bringing a lawyer. Of course, that's assuming that your state does actually have a law that makes this clause unenforceable.
When Peña downloaded the Bird app and agreed to its terms in August 2018, he unwittingly indemnified Bird against any lawsuits. Bird now claims that Peña owes the company $322,171, the amount it has spent so far defending Los Angeles against the lawsuit.
So... thanks for the advice and info. Good to get practical knowledge out there.
That said:
that same law says you can get attorneys’ fees too, the company knows that they could be facing a 50k+ judgment at the end (almost entirely comprising attorneys’ fees), and then that often incentivizes earlier, higher settlements.
This is awful, in my opinion. We really should consider redesigning our legal systems once every century or so. This sort of thing is a result of lawyers making their own rules for too long.
Thank you for the insight! I'm curious of your perspective around consumer success with data breach as of recent? Do you find companies liable for general negligence?
As an example... When I was selecting a mortgage company a couple years ago one of the large providers who is newer, and started out in higher ed loans, seemed to have a very sloppy process. They did a lot of things via email that likely shouldn't be done which opened up the avenue for them to send my SO and I emails of PDFs that included our SSNs in them. Needless to say I stopped the mortgage process with them right there and, ended up using a local credit union. However, I threatened legal recourse in a state that doesn't have great privacy laws based on the obvious "leak". When they asked for proof I pointed out that the email headers contained 5 intermediaries that were out of their control between sending and receipt. The company sent us each a check for $4k and part of my stipulations were that we would not sign anything in exchange. I was surprised how easy it was and almost felt as though I left money on the table. But I'm curious if you see a particular area that consumers can push back on when companies are negligent with customer data?
Typically, breach litigation has not been very successful. I would describe your outcome at very out of the ordinary (although the behavior you describe is pretty egregious).
The problem is that, generally, the law thinks in terms of damages. So this mortgage company was being reckless with private information, but were you harmed by it? If the answer is "no," oftentimes the claim is dead on arrival.
Of course, we all know that a data breach might not yield harm for 12+ months (when the data is sold on a black market and then used nefariously). But the law isn't well equipped for these types of situations.
So if they decide to settle once you get a lawyer involved, does the settlement include both the claim and the lawyer's fees thus far, or just the claim?
I'm sure that the answer is "both of course", but just want to hear how these kinds of early settlements pan out in your experience. I imagine that the ~$50k judgement you used as an example might be for lawyer fees when it has gone to judgement, but is it even worth most lawyers' time if it doesn't go that far? Couple hundred bucks to send a letter vs hundreds of bucks an hour doing something more consistent? Or is all this pretty boilerplate stuff?
Lawyer fees are not a fixed cost, they increase with time. And the longer a case goes the less boilerplate it becomes. A settlement is more likely to include a greater portion going to the consumer than a final arbitration
Right, I get that. I just wanted to make sure that the lawyer's fees are covered in the settlement, or would a settlement include a final FU you that you now have your claim, but you're potentially out of pocket paying the lawyer fees you now owe.
Worse yet, could they string you along and wait till the last minute to settle, thus increasing your lawyer fees potentially beyond the value of the original claim?
I'm not sure if I'm understanding all of the questions/concerns you raise in your comment, but generally, I don't apportion out attorneys' fees in a settlement.
And, again, typically, you don't "owe" attorneys' fees. It's a contingency (percentage) agreement. So if you settle at the 11th hour for $10,000, you have agreed to pay the lawyer a percentage of that figure, not necessarily what they would have asked for as attorneys' fees at a trial/hearing.
IANAL, but my understanding is that the default rule in the US is "each party pays for their own lawyers, regardless of who wins"[0]. Of course, the specifics would depend on the actual terms of the settlement agreement.
That is the standard American rule. However for this reason, most consumer protection statute include a provision where the prevailing consumer gets their attorneys fees. Otherwise consumers would be left without representation.
It's more nuanced and squishy than that. Let's say I'm half way through litigation and we want to talk settlement.
I'm going to say something like "if we win, my client is going to get $6,000, and I'll have a claim for fees of $20,000 (based on my time in the claim so far)." So then I'm going to use that as a basis to make a settlement demand of $30,000.
And then we play negotiation ping pong. I'm likely going to discount the portion I attribute to my fees because they're uncertain (what if I lose?). And then the client ultimately makes an individualized decision wheter we settle and on what terms.
> And then the client ultimately makes an individualized decision wheter we settle and on what terms.
Could you please elaborate on how that works? To continue your example story, let's say you decide that rather than $20k you're willing to settle with taking $15k for your fees; and let's say they counter your $30k offer with "$20k take it or leave it". Do you then give the client a choice of "you get $5k instead of $6k if we settle, your choice between that or going to court"? Which could equally be "you get $1k instead of $6k" if you earlier decided to only lower your fee for settling from $20k to $19k?
Or does the client actually get more power than that somehow / at what stages do they get info & get to make what decisions or proposals?
(edit: and I'm just asking for curiosity since I'm not in the US, but maybe you could also clarify if what you're saying is true for the US or just for your state?)
Having done this once myself, I will also add this: I'm in my mid-40s now, and arbitration triggered long-dormant school-type psychological patterns of "ohmigosh I'm going to get in trouble if I don't do this perfectly", or "What if I get B-?". The attorneys on the other side may even try to deliberately trigger these, they know the deal.
The reality is, if you bring an action, the worst case outcome is basically: You lose. Yup, losing sucks. But... that's it. It's not going to trash your credit record, cause your significant other to leave, get you held back a grade, result in being grounded, kill your job (barring bring arbitration against your employer, of course, even if law forbids it), etc. etc. Your brain may incorrectly assess the stakes as being far higher than they are because of the form of the matter. You may need to consciously control those patterns.
But if you want to be able to hold companies accountable, this is a big tool in your belt and if more people used it we'd probably see companies being less bold in screwing their customers over. It's a losing proposition for them from the moment you file. I certainly don't encourage frivolous filings, but by all means, when it isn't frivolous, think of it as a pro-social, pro-consumer action that you can take to bring companies to task and in at least in some small way represent other consumers who they probably screwed over too, but don't have the wherewithal to file arbitrations of their own.
Let's not forget the bigger tool in the belt and the one that is more likely to be more fair and balanced and affordable, and that is not having forced arbitration clauses and rights waivers. Companies doing this are not doing it to do anyone a favor and to pretend otherwise is a con by the same people that want you to lose.
There is a certain amount of evidence that if enough people start using the arbitration clauses, companies start reconsidering them and returning to standard class-action clauses. Companies for a long time were using arbitration in no small part precisely because nobody knew how to do it. But every person who goes through the process learns how to do it, and even if they start with Company X, that makes it that much easier to go after Company Y later. So over time knowledge is diffusing out. If the arbitration clauses offend you, you can take concrete action to help getting them out of the contracts by using them yourself.
And imagine if we started teaching high school kids about these types of tools to help them navigate the real world! I barely understood the broad picture of how government was supposed to work, much less offered any "applied" knowledge of the systems I would actually need to interact with as a citizen.
It's not financially viable for an attorney. Lawyers charge by the hour; how much time does an arbitration take? For a case like this:
-listen to your story : 1 hr.\\
-read your documents .5 \\
-follow up questions .25 \\
-draft request for arbitration .5 \\
-review rules .5 \\
-respond to correspondence, select arbitrator 1.
-respond to answer from Defendant .5 \\
-schedule arbitration .25 \\
-hearing 2. \\
-request payment .5
total: 5.5
This is an extremely conservative estimate. At $100/hr, that's $550. Good luck finding a lawyer who will charge $100/per and it's much more likely that time estimate is off. Double it, plus... So your legal costs at a minimum are going to hit $1000. On a $2000 claim.
and if payment isn't made, there's a whole 'nuther round...
These cases just aren't economical for lawyers, unless you specialize in them and do nothing but crank them out.
Further up the thread there's an attorney who does arbitration all the time, but just in case he doesn't respond to you I will point out that professional specialization is exactly how everything works.
I absolutely love this attitude. And, candidly, as a lawyer, this is part of why I love arbitration. It's a lot less formal. It's more about just getting to the right result without all the unnecessary pomp and circumstance. It lets me do my job--advocate for my clients--without worrying about whether I made sure to include some magic words or hit a specific, inflexible deadline.
If there's a health issue with a kid, I send the arbitrator an email and ask for 7 more days. No formal "motion for continuance pursuant to local rule 8.9(c)(3)(f)."
Lastly, I agree that this a tool. I like to think of arbitration, in this context, as the best customer service tool out there. Remember back when the hack was that you send a letter to the office of the president and that got you a competent response? Arbitration is like that on steroids.
The reason for the fear is the possibility of bias against the consumer. If companies pay for the cost of arbitration and everything is behind closed doors, how do we know we can trust the process to be fair?
I’m not a lawyer or a legal expert or even believe the judicial system is always fair. But at least it’s open and rules are well laid. So as a layman, why should I believe arbitration? (Genuine question; not a judgment)
The main reason for the fear is the loss of class action potential, which means almost all small disputes are impossible to obtain redress for. If you're in a situation where the case is worth 5-50k, it's generally a better option to go for an arbitration barring concerns associated with bias (which very much do exist - many specialty boards like various copyright boards consistently make pro-industry mistakes in procedure), but the primary overarching anti-consumer element of mandated arbitration clauses is the removal of class actions as a vehicle for making mass-litigation viable.
Instead of companies defending one class action suit, they (potentially) defend 1000s of individual disputes in arbitration and it ends up costing them more.
I'm just guessing here, I have no idea, if OP didn't settle and lost, it would have cost the company more than what they paid to settle.
These days I'd image you could do the arbitration over a video call. Easily worth my time for $2000.
Would you comment on arbitration services? AAA seems to be legit, while National Arbitration Forum was a front for a collection agency.[1] What about JAMS?
> And, candidly, as a lawyer, this is part of why I love arbitration. It's a lot less formal. It's more about just getting to the right result without all the unnecessary pomp and circumstance.
Sure, arbitration is fine -- give two parties more options to come to an agreement. But mandatory binding arbitration that explicitly contractually removes any way to resort to a full court? That's what I think is wrong.
If two parties don't come to an agreement in arbitration then they should always have the option to go to full court and incur the costs and headaches of doing so. Having that option would, I think, make arbitration far more desirable than it currently is.
The part that really irks me is not about possibly losing, but all the time wasted in the process. I see a lot of protections in the spirit of "get your money back", but no one is going to compensate for the time spent to get that money.
Depending on the amount of money, customers might not attempt to file these cases so that they can cut their losses early. Companies knows these too, which is why contracts and customer support channels are often designed to waste your time. I know people who would still go after companies purely on principle, but that is a tiresome way to live.
"when it isn't frivolous, think of it as a pro-social, pro-consumer action that you can take to bring companies to task and in at least in some small way represent other consumers who they probably screwed over too, but don't have the wherewithal to file arbitrations of their own. "
An absolutely laudable and supportable position. Firms get away with garbage behavior because almost no one takes out the trash, so to speak. If they did, the behavior would shift dramatically.
> I'm in my mid-40s now, and arbitration triggered long-dormant school-type psychological patterns of "ohmigosh I'm going to get in trouble if I don't do this perfectly", or "What if I get B-?". The attorneys on the other side may even try to deliberately trigger these, they know the deal.
I've seen this attitude in the padnemic and it's certainly weird. Health departments ride on that, and fail to do professional due diligence.
Context: There was a vaccine finders group for my region.. I mentioned a few helpful hints for those concerned at going to get the vaccine. (Being in contact with others is a risk). I suggested respirators (N95s, KN95s,KF94s). But the response I got before was "what is your credentials?! you're not a doctor! health department person x doesn't say that". I could point to numerous studies showing the effectiveness but if you're not a credentialed person.. sigh.
When I talk about the health department people, many of them just parroted what they heard from the CDC's dubious advice.
These one sided attorney fees provisions make a mockery of justice. The whole dialog becomes basically blackmail if you are a small business. Maybe it's ok to have these laws for giant corporations, but if you own a small business and are barely getting by, simply being accused of something you lose regardless of the outcome and your accuser loses nothing regardless of outcome.
What's the alternative though? I can sue you at any time for any reason. Well, I guess the alternative is to make it difficult for the average person to use the legal system at all.
Which is unethical because the legal system is supposed to be fair and balanced. If someone is suing you frivolously then ask the court to declare them a vexatious litigant.
You would have to spend much more time litigating without an arbitration clause, meaning even more attorney fees. If this is a problem, it's not a problem specific to arbitration.
Having seen the other side (I sat next to and was friend with some corporate lawyers), customer service may have no power or latitude to deviate, but the legal team has enormous latitude to do so.
They're risk averse. You don't have to threaten a lawyer and you shouldn't). Just letting a lawyer know you exist and have a legitimate problem that could blow up in their face, can often be enough to magically resolve issues. They almost always have a public email address.
Maybe it's better to go after them with the parent posts laws, but sometimes you just want your issue resolved. I can tell you that very few teams will argue once they get an email from the General Counsel.
See also, patio11's post about being a dangerous professional[0]. One of the best pieces of writing on the subject.
"the company knows that they could be facing a 50k+ judgment"
Wait. You could lose. Doesn't that mean YOU could be responsible for THEIR lawyer fees too? EG. If you lose, your lawyer shrugs their shoulders and walks, you are stuck paying the 50k?
It depends on the jurisdiction but in the USA, generally the plaintiff is not responsible for the defenses legal fees.
You’re generally only responsible for the defendants legal fees if your suit was unfounded and purposefully used to disrupt or harm your legal opponent, rather than to seek remedy in good faith.
The defendant can be made to be responsible for your legal fees because those fees were “caused” by their action/inaction which was the unlawful source of harm that you are suing about.
Because the defendant “caused” the lawsuit as a direct result of their original actions against you. All costs that follow from their original harm are owed by them to make you whole.
If you bring a lawsuit as a plaintiff and lose, as long as it was a reasonably well founded lawsuit, there’s nothing to point to and say “ah ha! You injured me with your lawsuit that I won”. Because everything that happened was perfectly within everyone’s right (to bring a reasonable lawsuit but fail to secure a win).
Generally no. American rule provides that everyone has to pay their own fees unless there is a fee provision. Those are almost always written in favor of the consumer (if you win, you get fees; if you lose, you don't, but neither does the business).
> One other way to “enlarge the pie” in situations like this is to hire an attorney.
Your comments here are incredibly enlightening, thank you for sharing! Can you speak to how to find a good attorney for this kind of thing, or really for any legal needs? Like where to go to find people willing to do arbitration and maybe how to determine if they’re good. I’ve hired a lawyer in the past for some employment contract work, and it was worth every penny, but found out it was rather difficult to find someone who could help. I had to cold call a lot of people who weren’t interested or said they weren’t qualified. It felt like the lawyers or firms I spoke to were mostly looking for a longer term relationship.
It's very challenging finding a lawyer in a lot of these consumer protection spaces, because, for a whole host of reasons, there's not a lot of money here.
Having said that, one piece of advice I always like to give when looking for any professional is to use your network. If you have people in your network you trust, use them as a starting point. So, for example, I don't do criminal law. But, as a lawyer, I know lots of criminal lawyers (insert joke), and I also have a well-tuned BS detector when talking with other lawyers. So even though I can't help you, you'd be smart to reach out to me because I can help you find the right person much more effectively. And if I can't, then I reach out to a criminal law attorney I know, link you up, and let that person make a recommendation.
In short, use your network to leverage experience and knowledge to zero in on a good attorney. It will probably take a few degrees of connection, but if the chain is solid, you should get a good end result.
For example, I recently had a client who needed a criminal law attorney in a state where I don't practice. So you have two issues: one, I don't know that legal community, and two, I don't do criminal law. But, I reached out in my network to a prosecutor in New York. Now this prosecutor can't represent my client, but now I have a criminal law attorney in the right state, and so his network is going to help. My buddy (lawyer 2) reaches out to his network, and one of his trusted contacts says "call lawyer 3)." My buddy (lawyer 2) doesn't know lawyer 3, but he trusts his network and the referrer. Long story short, my client ends up represented by lawyer 3, and well taken care of.
I am planning to go to AAA with a claim against an online ticket sales company that scammed my mother - I have screenshot evidence that they violated an FTC consent decree in the process. Amusingly the consent decree also mandates them to keep detailed logs on their behavior for 10 years so they should have excellent records as well.
I already spoke to senior attorneys at the FTC about it, but they couldn't really say anything back, and my understanding is that arbitration is the best option for my family to seek relief.
Would you be interested in this or have a recommendation for an attorney? I had planned to do it alone but your comment made me completely reconsider.
Generally no. It’s all private and unreported. There are some statistics gathered, but they’re anonymized. So, for example the statistic will record that my firm represented an unnamed consumer against a named company.
I'm not an attorney, but I've litigated almost a hundred cases without a lawyer.
Question: sometimes I'll have attorneys approach me at court when I'm on a case that's an obvious winner (and has statutory legal fees, which I can't claim because I'm not represented) and offer to take the case on so they'll get the fees, and then split the fees with me (and let me keep the damages).
Is there any reason why this would not be legal? I've not done it yet simply because I like to litigate everything myself to make a point that it's possible, but sometimes you get a judge that really hates unrepresented people and a lawyer would change the game.
> I'm not an attorney, but I've litigated almost a hundred cases without a lawyer.
Fascinating! I've only ever seen this criticized as a horrible idea. Are you operating in a specific area that you're skilled in? I assume you must have a decent win ratio.
Fascinating. I would love to hear more about your experiences! I could probably learn a thing or two (email in profile).
Ethics rules vary state to state. And, generally, a lawyer cannot split attorneys' fees with a non-lawyer. However, I'm aware of some jurisdictions that have exceptions to this rule, and perhaps, depending on the details, that might give them an out from the general prohibition.
But what you're describing is exactly the point I'm making. Having an attorney can often be a way to uncap your upside potential. If you can make the numbers work with the lawyer, then it's a win-win.
If I ever need an arbitration attorney, do you recommend (1) focusing on finding someone local or (2) finding someone specific to arbitration regardless of location?
Also, if I lose, am I on the hook for the attorney fee? Or do I ask the attorney to take the risk and only collect a fee if we win?
If you're optimizing between local versus experience arbitration attorney, I'd prioritize the latter. I've never felt like my geography was a major hindrance (maybe I had to put in some extra hours to learn local laws/rules/customs, but that's rather easy).
Put differently, I feel much more like a fish out of water when I'm out of an arbitration context I have a lot of familiarity I'm with than when I'm under a different state's laws.
> Lastly, let’s just say I’ve done an arbitration or two with a home warranty company. They don’t make money by paying out claims!
Thankfully we didn't (directly, I know it's our money in there somewhere) buy a warranty when we got our house last year.
I knew the AC was on its last legs from inspection, and no problem, since it was an older 80% old refrigerant system, probably closing on 30 years old. Figured it could wait one summer, in between all the other purchases with a new home.
Then last year Seattle decided to have a heat wave. Maybe not much for those in Phoenix, but four days in a row of 105F+. That's still hot.
And it's even hotter when you have no AC, as ours died a couple of hours into day 1.
So I call the HWC. They "are having trouble" finding someone for "emergency service". Their idea of "emergency service" is "we have a company that will be out there in four WEEKS".
So I found someone who could come out that day, for a surcharge. Reasonable. And the AC was dead. But this company were nice - the tech said "no promises, no commitments" and he did some shifty magic and got it running for about six more hours before it was permanently to the graveyard.
So we started getting quotes for a new HVAC system.
Responses from the HWC company:
- we won't pay if you don't use our suppliers
- we won't pay if you don't choose from our list of models (which were all low end, 80%, 1 stage systems)
- even if you use our supplier, we won't pay above an agreed amount
- if you used another contractor for ANY maintenance work on the existing system, we won't pay
- if the maintenance schedule wasn't followed (whether you owned the system/property at the time), we won't pay
Three (and a half) words are common across each of those bullet points, as you can probably surmise.
That's a mischaracterization about the problem with arbitration. People are not scared of it. People are not afraid. It's shameful that you use language like this accuse the people of being afraid and scared. You can't claim to be an attorney and then say you didn't understand the meaning behind the words you chose to use.
Consumer arbitration is corruption. People correctly understand that when one side is paying money to the judge, that the system is corrupt. It's about buying the judge, the court room, and the whole system.
The problems with consumer arbitration are well documented. Being scared is not one of those problems. People are angry.
Haha I used to work for a hot water company and this type of thing was pretty common. Doesn't bring back fond memories. So glad to not be doing that shitty job.
In many legal confrontations you're best not to put all your cards on the table up front.
Apart from anything else, it creates information asymmetry - your opponent certainly won't tip their hand to you until they feel the time is right.
And you leave yourself open to bluffing. If you blab everything, and then the other side steps it up and comes after you harder, you'll be left wondering - they know everything, but they're doubling down - am I missing something? Gee, they must have a stronger case than I thought.
Yeah I agree with this. I think it’s important to put the necessary facts on the table, along with your claim or gambit, but to hold back on the detail until you work out which way the wind is blowing.
I’ve had people tell me outright lies, which puts them in a difficult negotiating position when you can prove it. But the lies would not have been told (and my negotiating position not strengthened) if all the evidence was laid out up front.
Hiding information from an adversary has few downsides, as long as you keep your goals clear. You can always provide more information later. But you can never take information back.
This was basically my line of thinking when I filed. I felt I had good evidence, and I felt it all attacked very specific clauses in the contract. I didn't want to give them an opportunity to plan against it.
In hindsight, it may not have mattered. After all, I was going up against lawyers. thathndude, who has the top comment and is a lawyer, has a different perspective.
> 3) Keep records of phone conversations. Date, time, who, resolution. Keep screenshots. Keep emails.
If you take nothing else away from this article this a great point.
I once had an issue where two different electricity companies believed they were supplying our University flat. This turned out to be due to the mess of naming systems involved in Edinburgh flats where two apparently identical flats had meter numbers. Eventually I was able to extract this information from the call handlers but only after a ridiculous number of calls.
This got far better when I started taking names and extension numbers so that I could skip the intro session on each call and speak directly to someone who knew the situation. Taking careful notes of who I spoke to and when.
For about 2 years later I'd still get the hard sell from some debt collectors telling me that I could just pay the £2000 and it would all be over...
npower nearly drove me off the ledge (or more correctly came close to been the final push at what was the worst moment in my life) because they kept fucking up their billing for nearly a year over and over again, the same shit.
In the end I got pissed and kept asking for more senior people til I got to some director of something or other, I explained what had happened, that I had all the evidence (bank statements showing I'd paid, their inability to meter coherently etc) and that my next call was going to be a solicitor and ofgem if it wasn't resolved.
They zeroed the account (which worked in my favour somewhat since I had used some of it, came and got an accurate meter reading and apologised.
As an attorney, I love when I get a client like this who has tons and tons of records.
I recently had a case where my client, who uses a service dog, was denied a hotel reservation because of the dog. The hotel’s attorney called me and said “I spoke with the other person, she said this never happened, and he never said it was a service animal.” Well, my client, due to his disability, uses a telephone system that records all of his calls. I sent over the recording, and it clearly showed that he identified a service animal, and the person just said “no.” Now that lawyer knows his client’s a liar.
Olympus Telephone Recording Device (TP-8) costs something like $25.
It's simply brilliant. It plugs into any recorder with 3.5mm plug and because it's device you have in your ear it works with any call (normal phone call, WhatsApp whatever). Reporters routinely use it with Olympus voice recorders to make phone interviews.
Not looking for legal advice but: how does that work in the context that the other party is recording my call? If I phone a service provider, they tell me calls are recorded for training and monitoring purposes - does this prove they've given consent to both parties recording?
> If I phone a service provider, they tell me calls are recorded for training and monitoring purposes
Yes. If you're recording a call and it says "Your calls may be recorded" from their end that would be an open and shut argument that they've given permission for you to record the call.
I don’t understand how it works. It only has one jack. What do you plug it into? How do you get any audio into the earphone AND record both sides of the call? Or is it just like any microphone and you have to put the phone on speaker and basically record the ambiant audio?
Google has actually been fighting call recording apps for years. California is a two-party consent state, but most states are one-party consent (and many countries don't have legal restrictions at all). They're basically enforcing California law globally. It's extremely frustrating to have your phone force-upgraded only to lose important features.
I had a similar situation. My lesson from that was that if I can make "my" problem "their" problem, it will resolve itself quick.
In my case, someone had mistyped a meter number (matching mine) when signing a new contract with a power company. I got a message from my existing provider that I would be transferred there. I called the new company to explain that it was a mistake, and they seemed happy to fix it. I had to jump through some hoops (get a key to the power panel for the building to take a picture of my meter and stuff), but thought it was okay to get it resolved.
But it didn't work, later I got a letter addressed to the apartment, saying I owned the new company money. I gave them a call, and they didn't really want to fix it, just get their money, and make me do additional stuff to prove I hadn't signed with them. It was then I could say something along the line of "We don't have a contract, which is YOUR problem. As far as I'm concerned I'm getting free electricity until you fix this". Of course I could only say this because legally they can't cut the power here during winter.
But when it became their problem of losing money, it was fixed without issues.
>>and about two days later, got a Fed-Ex’ed check in the mail.
I often wonder, how much time and fuel is wasted on this nonsense in the US. Couldn't they have just.....sent him the money directly? You know, like in literally every other country in the world?
This. The number of companies still sending me checks (for client settlements) is asinine. And these are BIG companies (fortune 50). I have one of my regular companies now that ACH’s.
The amount of money spent on overnight mailing in the legal profession is astonishing.
Is it possible that even a small % of people losing and forgetting to actually use the cheques saves more money than a little added cost to each payment?
I wonder if companies want to have an image of a cashed, endorsed check as proof that the funds were sent, given the antagonistic nature of the relationship. With ACH/wire you can prove that the money was sent, but it is harder to prove that it landed in the customer’s account. Kind of a TCP vs. UDP thing.
This is probably partially right. Although it might sound silly to this crowd, the idea of asking people to get ACH and acct number is full of opportunities for things to go wrong (wrong info, typo in info, etc). Sending a check is the good ole fashioned way that everyone understands.
I don't know if this is true (I heard it from a local), but for decades there was not a single ATM on the Falkland islands. The local bank said ATMs just don't work on remote islands. So a Stanley petrol station took the matter into their own hands and just bought one. ATMs don't care if you're on an island, you just plug them in, put money in them and then people take it out. I can at least verify that that part is true because I was there, saw the machine and got money out of it.
Another personal anecdote is an industrial application where safety critical updates had to be received on DVD-Rs that were routinely left unsupervised with untrusted intermediaries in very shady parts of the world. I suggested putting a message authentication code to ensure it hadn't been tampered with. The industry professional I was talking to would hear none of it, thinking the only way would be to transfer the entire contents of the disk over a very expensive satellite link to the head office and have it compared bit by bit. That MACs are a real thing that actually works, and that sending the data back and forth and comparing isn't actually secure unless a MAC is also used was like water off the goose.
That's what surprised me the most too. Like... it's 2022, I'm sure we have banking systems capable of transferring miniscule amounts of money on demand, everywhere in the world. Right? For the amount of tech that comes from US, it seems to be incredibly backward on a lot of things.
I don't understand why Americans don't do direct bank transfers, they're fantastic. And with SEPA Instant Credit Transfer, it's even better than ever. I have a secondary bank account in Germany (N26) and if I transfer money from my Finnish bank account to it, I get a push notification from the receiving bank basically a second after I push "Confirm" on the transfer UI.
Well, yes, which makes the whole situation even weirder - American banks support direct bank transfers, yet companies and individuals continue using cheques. Fedexing a check for insurance claim is like super duper weird to me - it must cost money to send it, it cannot possibly be cheaper than just wiring the money.
To be fair, the French tax office mailed me my tax refund as a physical cheque which I couldn't cash as I no longer lived there. I eventually got them to wire it by SEPA but it required explaining my situation in a letter.
You see an inefficient system. Companies see a way to hold onto the money for longer, which makes them better able to use that money elsewhere in the meantime like continuing to earn from investments, benefit slightly from inflation, and potentially make other decisions with that money. Holding onto 2k for a few extra days might not be a big deal, but when you do it for everything you pay out that can be a substantial benefit over time.
Its hilarious when selling/buying used books. I have had, on few occasions, been sent sale receipts of 1 or 2¢ on books which were re-sold. I would rather have them keep the money. It takes 40-60¢ to post that check.
This is what happened. The company probably got an invoice from the arbitration company for $2,000+ and paid it to the consumer instead. They save a headache and having to pay for attorneys.
This is my experience in the UK. If you are party to a contract and due to the failure of the other party to adhere to the terms of the contract you are out of pocket the other party needs to put you back in the position you would have been in had the breach not happened. Hence, you can charge for your time in writing letters and submissions to small claims court etc because that is time spent which wouldn’t have been spent if they had performed thier contract. Therefore I always state my hourly rate and how much time I’ve spent so far when dealing with intransigence from companies. I had a fault in my electricty meter and was over charged by £2000. I spent hours on the phone and they didn’t do anything to resolve the problem until I threatened small claims court at which point they refunded me and offered £250 compensation.
compesation for my time. Maybe justice doesn’t work like this in the US, but I reckon he probably could have got more from this company.
"they refunded me and offered £250 compensation. compesation for my time."
Yep, it doesn't work like that at all in the US. A threat of going to court might get you the refund. No way are are they paying for your time voluntarily.
We should also bear in mind, outside of what you're saying, the flip side.
I have seen so many contracts with unenforceable clauses, made up gibberish, illegal demands. Then a fancy pants "if any part of this contract is unenforceable, the rest shall remain in effect" or some such.
Two things here.
First is? While I have seen courts toss the whole contract regardless, mostly because key invalidated clauses unbalanced the contract, I'd like to see this legislatively made illegal. Why?
Because second thing is, I've seen companies write contracts knowing some clauses are unenforcable, but putting them there to scare, to intimidate.
Literally, it is an attempt to play "their game". Especially with ridiculous terms of service, eg, not a real contract in most parts of the world.
So don't play their game. Don't presume the contract is valid, or legal, especially when the balance of power is unequal.
> Because second thing is, I've seen companies write contracts knowing some clauses are unenforcable, but putting them there to scare, to intimidate.
"It is better that ten guilty persons escape than that one innocent suffer". We should _definitely_ err on the side of leniency on this. If my employment contract isn't watertight because of a law change, or a discrepency in an unrelated clause, should my employer be able to renege on my pay because the contract is invalid?
> If there is a 20 email long chain, discussing a clause in a contract, that counts too. What was the intent of both parties?
What if the contract includes a statement: "this agreement consititute the entire agreement between the parties and supersedes, merges, and replaces all prior oral or written agreements, negotiations, offers, representations, etc. with respect to the subject matter. No course of dealing between the parties, no usage of trade, or outside evidence of any nature shall be used to modify, interpret, or supplement blah blahb lahblhbjajk"
Yeah that 20 email chain? The contract specifically says it can't be included in the agreement. Bringing that up was a fun conversation when negotiating the contract...
> This is why we have courts, and why a contract is never examined in isolation.
So are you suggesting that when considering the validity of a contract, externalities should be considered (e.g. the 20 email chain), but the actual document that was signed should not be considered?
> So don't play their game. Don't presume the contract is valid, or legal, especially when the balance of power is unequal.
I don’t presume this at all, but saying ‘this clause is unenforceable because x, y and z’ is much more work than saying, ‘look, your own contract says you failed to uphold your end of the deal’.
Mostly because you likely have to search through tons of laws to find x, y and z. As convoluted as contract language is, a whole legal handbook is much more so.
As an attorney, I hope everyone reads this. Contrary to prevailing sentiment, arbitration is not de facto justice denied. In my experience, if you have a weak case, arbitration often results in a better outcome than a jury trial. Juries can be quite skeptical and judgmental. Arbitrators tend to be split-the-baby oriented.
To be sure, it’s not the rainbows and butterflies solution that the businesses would like you to believe it is. But it’s also not the insane, unending trampling of rights that anti-arbitration folks claim it is.
Sellers are basically obligated to provide them, because it's what everybody does. They serve to lubricate a deal with a checkbox, while releasing the seller from some obligations.
I'm pretty sure selling RE agents get a percentage on referrals (in US). I sold a house without an agent and phoned one of these companies to simply buy a warranty to hand to my house buyer. They were baffled how to do this without my agent id number until some manager said just sell it to him.
The whole thing is a reception line of parasites waiting for some homebuyer blood.
And if you're on the other end as the buyer and actually need to use the warranty, good luck. One of the worst experiences I've ever had, and it was supposed to be "one of the best home warranty companies out there".
In my experience (in several US states) it has never been "offered to sell me." It has been "the seller is including a home warranty [whether you want it or not]." One time I tried turning it down, and was basically told "well, we'd have to go back to the drawing board on the offer if you do that. Just take it. Everyone takes it." And similarly when selling a house "I don't want to include a home warranty" was met with "all other sellers include it, so if you don't, you're going to look bad." For the cost of these warranties I can't imagine that the agents are getting that much of a kickback, especially compared to the commission they make on the sale, but something is clearly going on.
Well my house didn't come with a home warranty either nor did anyone involved in the transaction recommend one or even mention it either way. I was under the impression they were a very niche product.
Well just to put in some more anecdotes, I sold a home in December and did not offer a home warranty. My agent did not care and the home sold quickly without one.
And several friends and family have purchased real estate in the last few months; again no home warranty offered or expected in those transactions.
I think the market has a lot to do with it. I've bought properties in buyer's markets (recession '08 and '14) and it was barely even mentioned that there was a home warranty included. I got the sense from my agents that it was standard.
I've been shopping since September last year and watched the market shift as low interest rates stopped recently. There was a seasonal dip in December 2021, but it was still about 20% higher than even highs of previous years as people scrambled to get good loans before they ended. It was definitely a seller's market. My agent said many winning deals were waiving financing contingencies and even inspection contingencies to sweeten the offer. Home warranties would have been one of the first things dropped.
Yet we did get a warranty on our recent home purchase, and it paid for itself 3 times over. But this was a very specific situation - the home had been built over 20 years ago and had all the original appliances, furnace, water heater, etc. It was a ticking time bomb to have to replace those things. So we got the warranty and pushed the warranty every time the slightest thing went wrong, and replaced half of the various appliance and systems with some reimbursements from the warranty.
Not total reimbursements, and I don't recommend the warranties unless you likewise have a complete set of appliances past their expected lifetimes. But like anything else, use a tool in the right place, in the right way, and it serves its purpose.
Home warranty companies are the worst. After the year warranty that came with my first house expired I (foolishly) maintained the contract for a while longer. I later sold the house, including 6 months or a year of that same warranty contract. After that pre-paid time period was up they started charging my credit card again rather than the new owners. I called multiple times but was unable to get anyone to remove my card details from the contract. Thankfully, since it was a credit card I was just able to do a few chargebacks and that solved the problem.
As an aside, shortly before I filed, I told one of the customer service reps to cancel my contract. They said a manager would call me (I assume a retention specialist) but they never did. Coincidentally, my credit card expired and I just figured I'd cancel the contract that way.
For months I got emails and eventually calls from them telling me my credit card expired. I'm like, "I just had to file an arbitration case against you fuckers. Can't you read my account notes?" But after dealing with those reps, I concluded that no, they can't read my account notes.
Contacts are awesome. I got humanitarian aid logistics training and the teacher taught us: always make a written contract, for any agreement. You don't need to be a lawyer to make a useful contact. The process of writing and signing it clarifies the situation to you and the counterparty. Most disagreements can be solved in informal arbitration, especially when one party can show, look we agreed to this and then I did this and you did that. Humans do better removing emotion and ego when there's some rules written down.
I also faced a situation where the contract a former logistician had entered into had become wildly unfair to the vendor, not through his fault. He started giving me problems and I offered to break the contract and find a new compromise that met my needs and his. Happiness all around, for a small amount of reasonable, ethical cost to my organization.
> Of course, they refused to pay. Trying to find someone at HWC who could show an iota of free-will and thinking was hilarious and impossible.
This always annoys me; a 100 sellers for every person working in any type of customer care/support role seems to be the norm. If you can actually get in contact with someone in customer care/support their job always seem to be to brush you off nicely, not really help you.
I remember Android doesn't really allow you to record the other party audio, only your own. Unless you write your own caller app that processes the audio, but not sure how easy it is to send the audio to default phone caller after. Apple probably does it too.
This. A detailed description of the call - what was discussed, who was discussed, what I said - reconciled with a record from the phone or phone company is more than enough. This is what many other professions, including medical, do.
If you're involved in a multi-million dollar lawsuit, sure you'll nitpick with lawyers about the content of the call, but for a few grand, no one's going to argue with you.
There's also too many headaches with recording calls. Dealing with one party vs. two party states, etc.
Hmm, then in sounds I can just record my own voice only. Notes are easy to write down later from those. Legally all is fine, since I'm recording only my own voice, but it's good for the purposes you describe.
Conversely, don't be afraid of aftermarket vehicle warranties (in the US, and after you've vetted them). Perhaps a YMMV moment, but I've had a very positive experience surprisingly.
Bank account number, name and address can be enough to setup a direct debit or initiate a withdrawl (in specific circumstances). Keep in mind that you are less worried about the company itself being evil, than the possibiliy of this data leaking and being seen by a less scrupolous entity.
> [...] I counter-offered 80% plus arbitration filing fee reimbursement. The next day, they responded back with an acceptance and sent over a release form. Case pretty much closed. I didn’t get 100% back, [...]
So author had to jump through hoops and in the end only got a percentage of what was owed. The text is written in the format of a feel-good success story, but the result is the oposite. What is described is a broken system, if the only punishment for the crime is to do what they should have done in the first place then there is no incentive for companies to do the right thing to begin with. Customer protection laws absolutely need a clause for double the reimbursement and I'm shocked that this person's country (I'm assuming it is the USA) doesn't have it. Without such a clause it is best for the company to just deny ALL claims and profit out of the people too lazy to go through arbitration.
This was my takeaway as well. So in order to not get screwed everytime I do business with any corporation (i.e. virtually constantly in the modern world), I have to go scrutinize contracts, meticulously log phone calls, initiate and follow up on arbitration procedures, etc, and still lose money in the process? How is that a win? Who has time for all of that? It's so ridiculously one-sided, yet we're so conditioned to it that we think we're doing alright when we're just getting screwed.
Sure, but there's still a crucial difference: the one other natural person has the same order of magnitude of resources to spend on the issue as you, instead of a multiple.
Plus a person might apply common sense and human judgement from the first contact instead of following procedure with no power to deviate from it even if it makes absolutely no sense at all.
I didn't get that at all. Author takes on company legally, and with little effort wins most of what they are after (~10% difference).
I had a situation almost identical to this where I had an AC that gave out and after a month with the warranty company, I just fixed it myself. Because it was July. In the southern United States. I didn't even know about arbitration. I just assumed the black whole of rotating customer service agents and canned answers is the end of the line.
In addition, there was the author's time without hot water, time spent on customer service, time spent figuring out how to file an AA case, and stress.
Author here. As the arbitration attorney said earlier, "They don’t make money by paying out claims!" No insurance company or home warranty company exists to pay out claims. I laugh when I hear them claim that their business is to diversify risk.
Any sort of out clause that the have to not pay a claim, they will try to use. In this case, it was "you didn't get a preauth." This makes it by no means a binary, black/white issue contrary to what a stereotypical HNer believes.
As far as a national consumer protection law that doubles reimbursement, good luck. I'm shocked that foreigners are shocked when they hear that the US actually has very few national laws. The country is big, diverse, and the regional histories that bought the states together, and grew, is too varied. The system is set up so that the states handle most legal issues. I for one am fine with that.
I think you proved SkeuomorphicBee's point. You are oblivious to the fact that you got f-ed over. You are talking past the argument thinking people won't notice that your feel good blog post is about how you think you won, but actually got screwed and are oh-so happy about it.
Bizarre you think that things are either fucked over/not fucked over. I'd point out that the vast majority of lawsuits are settled before hitting the courtroom, but I think you're too young to understand what those words mean.
In my experience, lots of companies have more or less automatic denial on requests. This is to filter out those that simply give up on step 1. Then the same companies will, like OP points out, offer some % in reimbursement / whatever to those that bother to appeal the initial denial. It's a disgusting practice, IMO - but what can you do?
A bit OT:
But ESPECIALLY the rental market - professional or private - is horrible on this. Before purchasing my home, I had rented 7 different apartments over the years.
No mater how thorough I'd be on washing out apartment, or how careful I'd be with it, they would always find something - and claim deductions on the deposit.
This worked for the first apartment I rented - after that I got wiser, and took pictures of everything before actually moving in. Better yet, with the landlord or representative as witness. Document everything. I even recorded the phone conversation - informing that the conversation would be recorded, and if that was a problem, we'd take everything in writing.
This saved me lots of deposits. Like clockwork, I'd be informed that they found something - sending evidence. I'd reply back with my evidence, and suddenly everything's OK.
> In my experience, lots of companies have more or less automatic denial on requests.
Remember I read that in a novel as a teenager, and since then I've always complained if I get rejected. Almost always work, as they then finally actually look at your situation. And if it doesn't work, I keep going until they realize making me whole will be less costly than the time I make them spend.
Had to look it up, the novel was "The Rainmaker" by John Grisham.
> It's a disgusting practice, IMO - but what can you do?
Rate the expected value of all insurance services at $0, that's my approach. (I guess you could call that giving up on step zero!) Why bother doing business with people whose profit model consists of taking your money now so they can decline to return it later? The better they are at their jobs, the worse a deal it is for you.
Of COURSE insurance has a negative expectation (not $0) in absolute terms - but this doesn't make it a bad idea! We don't live on expected value - we live on actual, highly variable outcomes. I'm happy to lose expected value to offset catastrophic losses for small-probability events, like early death, car accidents and fires.
I will continue happily paying my insurance premiums, and ardently hope that I never get any of that money back.
Of course, there may be specific types of insurance/warrantee programs that are a bad idea for one reason or another, but that's not an argument against insurance in general.
In Australia and other countries rental deposits are held by a government office, at the end of the lease if the landlord wants to keep some for damages they have to prove that there is a problem. I think the office lives off the interest earned. Works great.
> This is to filter out those that simply give up on step 1.
A lot of people must give up here. I had a car totaled by a hit-and-run driver and the insurance company wanted me to settle for $10k less than the car was clearly worth. (I had lots of proof of this.) It took a month of me telling the adjuster "I'm not settling" before I got that $10k. It was the most infuriating customer-company relationship encounter I had ever had. I felt like the person was intentionally misunderstanding me and making false statements. I tried to get to their manager a few times, but they wouldn't. It was clear that the person's manager was in complete agreement with the course this situation was taking.
Yup. When my car was totalled I had a number in mind (high 20s). And got a much lower number. For the record, this was like a 3 year old Audi A4, fully loaded.
So I asked to see comps. Sure enough, all but one of the comps was in that ballpark, from about 3-4 under, to nearly 30.
Except one. Which was about 140 miles away, and listed for $11,500. Clearly a salvage or rebuild or something (water damage, whatever, obviously not accurate). Dragging the average down like a boat anchor.
"The ad doesn't say Salvage Title so it's a valid comp."
They just kept repeating that like a broken record.
My situation was that I had very low miles and all comps had like 3x those miles, in my area. She wouldn't look outside my area for comps with low miles, even though those areas had much lower cost of living. Going from $18k to $28k allowed me to get a new (used) car for no cash. Also, we had a semantic argument about what a "trailer hitch" was that lasted weeks. I had it installed after purchase and had receipts.
I definitely recognize the "broken record" part of your comment!
If you were an idiot and opted out of arbitration you’ll need to spend a lot of money going through the courts. If you didn’t, you may be able to get representation on a contingency basis.
> after that I got wiser, and took pictures of everything before actually moving in. Better yet, with the landlord or representative as witness.
I manage a property in a college town. Most of my tenants are first time renters just moving out of the dorms, so they've never learned these hard lessons before. I try to help them out by telling them about how they can get screwed on deposits, and tell them to take pictures of any damage they find and print it out so I can sign it.
I just hope they take that lesson with them after they leave my place.
Also I remind them that they have a right to a walk through at the end of the lease and never charge an item on a deposit that I haven't discussed with them first. I always give them a chance to fix it first. Usually they just say "bill me" (probably because it's their parents money) but sometimes they will fix it or they will help me fix it. It's a lot more work on my part, but on the flip side I'll have tenants messaging me a decade later thanking me for being honest and kind. So I guess it's all worth it.
A little known fact is that rental assets depreciate in the eyes of the government. This is why you can deduct depreciation from rental property on tax returns. The corollary to this is that damage to those assets happen against the depreciated value. For instance, if there is a bathtub in the unit and it hasn't been replaced in many years, then the effective value of that tub is 0. It doesn't matter if you actually damaged it or not, the landlord cannot come after you for the full cost of a new tub.
> No mater how thorough I'd be on washing out apartment, or how careful I'd be with it, they would always find something - and claim deductions on the deposit.
I sat in a PMs office in a high rise I was moving out, waiting for them to take care of something.
I noticed my move-out inspection report (which we were ABOUT to do), oddly already filled, some. "Blinds - dirty, needed cleaning", "Carpet - stains not removed, needed cleaning", about half a dozen items which according to their "costs incurred" ate up most of my deposit. Oddly, since I knew they hadn't been in the apartment recently, even without my consent, because I'd been packing and cleaning. I'd even brought with me receipts for the carpet cleaning etc.
PM comes in, grabs some papers and a clipboard from her desk, including the form. "Let's go get started".
"Oh, while I was waiting, I apologize, my eyes must have caught that some of the paperwork on your desk was for us, so I looked over at it, and saw it was already filled out for the inspection?"
Umm, ahh, stammer, stammer. "Oh, how strange. I must have, uhh, photocopied a previous form without realizing it wasn't empty."
Didn't make any sense on any level, but whatever. We started with a new form, and I made sure that none of that BS made its way back on.
Is there a term for these denial of service tactics that many organisations employ?
E.g. not having the authority, being the wrong person and sending you in another direction, putting the onus on you to move things forward, not responding to emails and calls, ignoring questions and selectively answering, not making contact details or policies available, and so on.
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[ 1.9 ms ] story [ 485 ms ] threadThis is so depressing - it cost him $200 to get to the point of arbitration in the first place (lucky for him that he had $200 to file it in the first place), _and_ he didn't even get the total amount back, he get less than $1500 rather than the $200 he likely should have got.
For anyone who claims "just take them to court" or "just sue them for breach of contract" - this is what you're looking at, getting back 75% of what you expected after paying for their complaints procedure.
> After about five calls of runarounds, I realized that customer service channels would not help me and I had use the legal system.
> I filed a case online for $200 > Two days later, I received a response <..> I respectfully declined. > A day later, I requested a 3rd party pre-auth to find an outside plumber. > I counter-offered 80% plus arbitration filing fee reimbursement. The next day
By my count, he called them 5 times, threatened (and followed up with) legal action, and took 4 rounds of negotiation all to receive less than he was entitled too.
Also, I don't blame OP at all here - they did a fantastic job of handling the situation they were in, but it's a shitty system that allows them to be caught like that in the first place.
Given the amounts we're talking, there's basically no difference between $1500 and $2000 for a big company - the entire process already cost them as much, and continuing said process would keep costing them more especially as it's a clear-cut case of breach of contract they are unlikely to win regardless of how much time they spend on it.
If they didn't believe he had any ground to stand on, they would've declined immediately regardless of how low his counter-offer was. Given that they accepted it immediately, they knew they were in the wrong and would've accepted a repayment of the full amount just as well.
There’s some interesting arbitrage opportunities in this space. I have the legal (and arbitration) experience. I’ve been noodling on how to marry it up with a tech-minded individual to capitalize on these opportunities.
In the end he still comes out ahead since it looks like a normal sized electric water heater runs around $500 plus the cost of installation and repairing any damage from the leaks.
Then they would have to affirmatively file a “motion to compel arbitration” in which they appear in court and argue that the contract mandates it.
Typically they’d win that motion but then you’d just start arbitration. Since that requires them to show up with a lawyer by that point you’d probably be able to just negotiate then. And if they fail to ask for arbitration in a timely way the case may proceed.
AAA arbitration has a rule that says if your claim can be filed in small claims court (typically 5k or less) then you can force the company into small claims court, and they can’t force you to arbitrate.
In my case, all of the arbitrators proposed by JAMS would have charged over $1000 per hour to resolve my case. Per the contract, all arbitration costs would have been borne by the defendant, so the company was eager to settle and avoid a huge arbitration bill.
I’ve done something like 500+ consumer arbitrations in the last 5 years. JAMS tends to result in better outcomes for the consumers.
There’s all sorts of reasons for this. If nothing else, JAMS arbitrators tend to be retired judges with experience in the adjudication role.
More often than not, AAA arbitrators are just attorneys with 10+ years of experience. And, well, let’s just say 10 years of experience as an attorney does not automatically make a person competent.
Everybody knows that what makes an attorney competent is their social media presence!
If nothing else, I hope folks will run with your first point. Far too many people are scared of arbitration, and it can be a really powerful tool for situations like this. It’s fairly accessible and straightforward, especially for folks in the HN crowd.
One pointer for other folks in the future is to make sure you look into your state’s specific consumer protection law. (Sometimes called UDAP law or deceptive practices act.) Often times, these laws will allow you to recover more than just your out of pocket damages to punish companies that are deceptive.
One other way to “enlarge the pie” in situations like this is to hire an attorney. I know, it sounds like I’m shilling for my peers, but hear me out. This same UDAP consumer protection laws let you recover attorneys’ fees as part of a judgment/win. If you’re not an attorney, you simply can’t seek those.
So let’s say your claim is $2,000. Under those laws, maybe you can “treble” (triple) your damages if you win. So now your best day is $6,000. And the company knows it.
But if that same law says you can get attorneys’ fees too, the company knows that they could be facing a 50k+ judgment at the end (almost entirely comprising attorneys’ fees), and then that often incentivizes earlier, higher settlements. My involvement in cases, and the threat of attorneys’ fees often results in higher settlements than my client would get on their “best day,” and even after paying out my portion. (I typically do these on contingency — I don’t get paid unless you get paid).
Lastly, let’s just say I’ve done an arbitration or two with a home warranty company. They don’t make money by paying out claims!
You're not paying for the CD, the valve turning, etc, you're paying off the time built for the expertise and background engineering.
It's not that you're paying him $100 for the expertise to know which valve to turn, it's that there's no one standing next to him who could reliably for $50 or even for $99 know which valve to turn.
You're not paying for his expertise so much as for the scarcity of his expertise.
It seems very unreasonable that a losing party could need to cover so much from their opponents end especially as they get no say in the total stakes.
If it was you paying $50k to your lawyer regardless of whether or not you won, sure, that’s just your choice. This is a $50k extra being thrown at your opponent and there’s no incentive to be reasonable about it because it sounds like your own client doesn’t get hit with it. Idk if it applies in this context but if it goes both ways then you’ve got a prisoners dilemma. Spending more on lawyers increases the probability of winning, but also increases the total pot of lawyer money. That’s so fucked up.
I would vote for you’re liable for at mode the amount you spent on lawyers personally. If they do 50k on a 2k issue and you don’t even get a lawyer, you may lose 2k but they lose 50k. Incentives to escalate lawyer fees sounds stupid as shit to society.
You are paying for protection of consumer rights, not to be lied to and not to be swindled. What are those rights worth to you?
As a company you always have a chance to come to amicable agreement with the customer before the lawyers got involved. Every time you tell a customer to piss off you take the risk that they might take you to court.
But it’s really bad that it’s ok for lawyers to basically encourage you to rack up contingent lawyer expenses. It’s just a toxic system.
No. It doesn't really matter what medium the software is on. Its value is independent of that.
I’m not charging my client 48k. I’m recording my time spent working the case. If I have to spend 100 hours working on a case, and my hourly rate is $500 an hour, and we win, then the attorneys’ fee award should be $50,000, regardless of whether the claim is $100 or $100,000.
This is an important component of civil rights litigation. Often times does claims have small value (in terms of damages). But we want to incentivize competent lawyering, and so, if you prevail, you get an award of attorneys’ fees.
The same is true in this context. If you don’t have a provision like that, then consumers are left without recourse. As it is, there are very few lawyers who practice in this area as is.
As plaintiff’s attorneys, we take cases we believe in, we spend our money to prosecute the case (I almost always pay that $200 AAA filing fee for my clients), and then we get paid out on the back end. In my personal opinion, it’s a much more appropriate compensation method, because it puts our interests firmly in line.
Based on the very limited understanding I have of this case, if we settle, I’m targeting a 10k settlement and taking a percentage of that (a percentage smaller than the client), and so my client is getting 5k+.
The disadvantage of it is that if you're just some guy against a BigCo, then instead of risking having to pay your own $50k lawyer bill you're potentially risking having to pay their $5M lawyer bill.
It is interesting to note that while some of the U.S. rules of professional conduct states that a lawyer shall represent a client "zealously", such a requirement is missing in our code of conduct rules.
On a side note, my experiences with the legal system is that it's a complete shit show full of incompetent and even crooked players (DA, police, magistrates, judges). If for no other reason, you have to hire a lawyer because a lawyer can more readily detect the incompetence, and the incompetent people are more likely to accept stuff coming from a credentialed person.
But, generally speaking, everyone is still on board for realizing that at the end of the day the attorneys fees award will probably be the biggest part of the award.
The fact is, as soon as judges stop giving out those attorneys fees awards, you’re going to stop having attorneys pursuing these civil rights cases. That’s the bottom line.
As a legal system, and as a society, we have to ask ourselves whether these civil rights violations are a priority or concern or not.
The goal is social justice, not just individual justice.
The fallacy is that these transactions have to be financial.
They don't. Any number of other remedies - from jail time downwards - would provide a stronger deterrent.
Without strong deterrents and the threat of even more expensive class action - possibly leading to personal ruin - individual losses can be written off as a cost of doing business.
Generally the sanctions for bad behaviour are far too light, and strongly biased towards business owners over customers/victims.
The Sackler/Purdue story is a perfect example. Inconceivable levels of harm were caused - far more harm than a high profile terrorist attack. But the Sackler family is still worth billions. And no one is going to jail.
A formal written complaint prior to filing for abitration might have been equally effective. Incentivizing escalation simply drives up the costs of resolving disputes.
For "minor" violations, they are not a priority at all. At least that's my experience and what I was told by that lawyer as well. If nobody in the system will enforce or defend your rights, then do you really even have those rights?
Nobody is a stretch. They can be enforced, just at great expense. So some people can defend those rights; others can’t.
We can’t extend this to the latter not having the rights because people intervene on behalf of others’ legal cases all the time, there are non-profits set up to do this (e.g. the ACLU and EFF) and some wealthy retired lawyers’ pass times.
Most civil rights violations aren’t criminal offences. It literally isn’t the police or DA’s job.
Color of law violations...
Did you see the quote about "legally, not at all"? This is easily identified as false. There are criminal charges in at least 4% of civil rights cases.
On top of that, we aren't just talking about charging some. We're talking about the idea that protection of civil rights is part of the job for police and prosecutors. This is also easy to prove. Police are required to Miranda-ize before interrogation, the agency they work for is required to investigate IAD complaints without being hostile to the complainant, etc. Prosecutors are required to maintain Guiglio lists, follow Brady for exculpatory evidence, etc. These are clearly defined examples of where the actors are in fact legally required to take steps to protect one's civil rights.
Do they sometimes violate these? Sure. The point is that it is in fact their job to ensure they are not violating people's civil rights. The reason they get away with it is that there's no real oversight, and even the civil cases are overseen by judges who are also part of the system and inevitably have biases to support the other members of that system.
I think my pay is normal for my title ("ML engineer"), location (Cincinnati), and experience (master's, 10 years in the workforce). Though I wouldn't turn down a substantial pay raise ...
I was a contractor from 2013-2018, though at that point I was more a generalist than I am now. I don't know what USAF paid my company for me but my take-home maxed at $29 an hour, so $98 would have been more than sufficient. With my paltry raise this year compared to inflation I'll be back to my old pay in real terms before you know it.
It's not that $500/hour isn't 'insane' (it actually is, but that goes for the profession as a whole), it's how much time ends up being billed for a case and US lawyers really are experts at running out the clock, and working the system to the point where the legal fees themselves become a weapon in the case (see the excellent examples in this thread illustrating that).
Except as you yourself point out upthread it's not really an incentive for competent lawyering per-se, rather it's an incentive for costly lawyering.
I.e. a reason for why someone might retain your services is partly or entirely because it gives the defendant a greater incentive to settle.
But I also get/agree with your point. Please don’t read any of my comments here as an impassioned defense of lawyers or the legal system in general. Just, generally, having a competent lawyer, can drive better outcomes in these cases.
Better lawyers really do drive better outcomes. If the other party is worth suing (a calculus that many people seem to skip).
Also, since the counterparty is basically making a financial decision (rather than a moral decision), costly lawyering is competent. The price is part of the service.
Competence is an orthogonal question.
Lawyers are basically mercenaries engaged in trial by combat, abstracted to an exchange of relevant facts and opinions.
It's not obvious that a battle between mercenaries is the best way to get a just result.
Considered systemically, lawyers also control legislation.
While it would be better for consumers to have much stronger protections, the people who make money out of weak protections are not incentivized to argue for stronger laws which would reduce their billable hours.
Just take a look at what is going on in Florida with litigious , shady roofing contractors, they have nearly collapsed the homeowners insurance market.
Not to go into too deep of details, I'll also say if you ever do business across an international border, even with a company that is headquartered within walking distance of where you live, they /will/ find a way to weasel out of responsibility, even if they have a signed contract saying they're responsible. Once any sort of business crosses an international border, the only way you can hold a multi-national company responsible is if you represent a government that is an ally of the US and can bring to bear full military force, otherwise they /will/ screw you over.
In fact, the primary component of my debt post-college was paying back attorney's fees for cases I had won (or had won / appealed several times until I settled because I could no longer afford to pay for attorneys).
Personally, I am a major supporter of the idea we should have it be written into law that the party that doesn't prevail is responsible for attorney's fees for both parties automatically. That said, I also understand that this could be disastrous for smaller entities suing larger entities if they lose (to which I mostly say... don't file frivolous suits).
There are legal issues that I will argue the exact same twice, and, depending on the judge, win one and lose one. If I have to pay for the attorneys fees of the other side for the one I lost, I'll be filing 0. No justice for anyone.
If I am not paying my lawyer, aren't we incentivised to charge (approaching) infinity, even if it's just a way to inflate the cost?
If the lawyer loses on contingency after spending 100 hours, nobody pays them; that lawyer eats the loss.
That’s just so fucked up.
Yeah, it's fucked up, but it's a response to the company being able to do more things that are fucked up and doesn't come out of nowhere.
This is one of the most eye opening things I've read on here. I didn't know that about arbitration. When you threaten/enter into arbitration, it should be part of the law that the company must respond with the maximum amount of damage they're liable for. Anything else is information asymmetry towards the company and they know that too.
If nothing else, an experienced consumer protection attorney brings that to the table—knowledge of these various laws (and how you can sue under them) that you might not even know exists.
Consumer protection laws that forced companies to simplify agreements were a response to the massive increase in complexity without such laws being on the books.
But there’s an even easier, non historical, way to see how “competition” does nothing to solve the problem of complexity in agreements.
The agreements to rent an apartment, or to buy a house, both of which are among the most complicated agreements the majority of people will sign, are far more straightforward in most states than buying a $2 song off iTunes or signing up for a 1 month membership off Spotify.
There is a lot of evidence that consumer protection laws have had massive effects in making the agreements more standardized and transparent and reducing shady and fraudulent behavior.
To your point, this is all pretty fresh stuff, and I think there will be more regulations in other areas. The regulations started with housing/mortgage agreements because they are such large transactions. But the same principles will hopefully trickle down.
And we also had centuries of really simple (by 2022 standards) contract terms. Even if you just include the time after mass-literacy contracts didn't start adding tons of length until fairly recently.
I'm not sure when exactly the proliferation of additional clauses in otherwise pretty simple contracts started but I read a homeowner's insurance policy from the 1930s and it fit on one page.
Edit: Why is this opinion so unwelcome here?
Of course it did. If it was printed, at the time, it had to be standardized. So the simplest thing would be to make them all identical. At most you’d have a kind of “if this box is checked, clause A applies” set of customization.
Only major contracts would be subject to major customization with individual pages typed.
This tool that we love so much probably had a major reason why things got so complicated.
Personal theory (that I just thought up, so I’m sure someone else thought of it first): complexity is like a goldfish. It grows to take up all available space in a system. If a system can handle more complexity, more will always appear.
When we couldn’t adjust contracts for individuals because it was technologically not feasible, we didn’t and contracts were simple. Now that we can adapt things for each individual contract, or personalize each web page, insert targeted ads, etc… we do because we can.
Only bureaucrats could think up such silly rules as to require people to take educational courses on buying a house and allow those courses to only be legally required after you've committed thousands of dollars to the seller.
If the market demanded educational material on how to buy a house (and it does, I've bought a book on real estate for that very purpose before buying my first home) then you get incentives that make sense.
How much competition? I've hardly even heard of better.com. Certainly every time I've bought a house (three since 2003, most recently in 2018) I've had to sign an unreadably long contract, and I don't recall much if any advertised competition in the "make it simpler" space.
I'm also not sure I buy that the complexity of the process came down to consumer protection laws, though I'm no expert in that area.
I feel like if somebody picks a lender and gets sent a stack of paperwork, they're committed. They're not going to back out "because the paperwork is too complicated" and choose a competitor, and ask their sales people "How long is your paperwork?"
So I'd be skeptical that "complexity of the legal agreement" is at all a factor.
I wouldn't be so sure about that, they've had 3 rounds of layoffs in the past 4 months, one of which was 1/3 of their workforce[0]. They are also accused multiple times of stiffing employees on severance pay[1]. Not to discount everything else you've said, but please don't use that company as an example of winning.
[0] via layoffs.fyi, filter companies to "Better.com"
[1] https://www.fastcompany.com/90750106/how-better-com-and-its-...
The disclosure laws actually help the banks here, by putting the most important terms front and center where it can be argued that the borrower did understand those even if they couldn't understand the rest of the document. In fact many legal documents are structured in such a way, putting the big picture at the top and then defining/clarifying things later.
As far as your general point, what helps is printed materials by the state that lay out general legal advice. For example, take a look at the wonderful California Tenants Guide.
Another thing that would help would be a public standardization of common consumer contracts. There is no need for every lease/employment contract to have its own custom verbiage that a tenant/employee is purportedly responsible for understanding. There should be at most a handful of standard contracts for common relationships, drafted and published by the government. There are already some of these things published by industry groups like landlord's associations, although they can be a bit biased towards their members. Not using a standard contract or lengthy typeset additions should be judged as an a priori attempt to mislead that no amount of initialing will undo.
Furthermore, putting terms in a contract that are blatantly contrary to prevailing law should itself be illegal with its own penalties apart from enforcement of the contract.
Of course the paperwork pushing lobby isn't a fan of such reforms, and will lobby against them by framing such things as "big government" even though they're better described as mitigations of "big government". There is lots of money to be made by perpetuating government dysfunction and then providing a half-solution. See also: Intuit vs tax filing reform.
I've never once heard people from California praising their state for making renting better. I've heard the exact opposite many times over.
Everything has tradeoffs. Every complexity the state forces into a transaction enables an exploitative company to leverage loopholes to their advantage. Only near perfect systems can reap the benefits of authoritative protections without inadvertently propping up exploiters who thrive on working around the complexity. Something a smaller, (likely more honest) company can't afford to do. There's a reason so many gigantic companies lobby for more regulation in their industry and I sincerely doubt that reason is to protect the consumer.
> Every complexity the state forces into a transaction
I do not see how publishing a guide of public legal advice is adding complexity, regulatory or otherwise, for either party. If you would like to make a specific argument of how it is, please do so.
> I've never once heard people from California praising their state for making renting better. I've heard the exact opposite many times over.
There are incentives to spread the negative/political messages, whereas the gains from repeating helpful individual-empowering advice are diffuse.
Let me fix that for you. As a renter in California I had a Landlord who tried to hold on to the bulk of my security deposit (a few thousand dollars) for repainting walls, additional cleaning, etc. The clear guidance in this tenants guide gave me confidence in dealing with the Landlord, clearly articulating my stance, and getting the vast majority of my deposit back. Other Landlords I had were very reasonable and refunded my full deposit without issue (I always left property in a good state) but when I had one that tried to play hardball the guide plus a couple of well written letters with appropriate references to the guide helped me sort out the issue relatively easily.
Making it clear what my rights were and setting clear expectations on tenants and landlords relative responsibilities was a clear benefit to me.
I can't help but scoff every time I read in a rental contract that even if some part of the contract is nullified due to not being legal, the rest of it still applies. It always makes me wonder which part of it they thought might not be enforceable, although likely they probably all include since it costs them nothing to do so.
IMHO it mostly works out in your favor. If any of your obligations toward them are deemed unenforceable they are still bound to uphold the rest of the contract. The reverse could also apply, of course, but as the smaller and "less sophisticated" party to the contract your obligations are more likely to be nullified by local consumer protection rules than theirs.
> Otherwise you'd have competition that exists solely to correct the complexity of our current financial system.
There's nothing stopping a company from doing this now. Consumer protection laws merely establish a baseline minimum. The market is still free to do better than the minimum.
There are two types of damages, actual and punitive, and for actual damages you set the value of the claim by .. adding up all the damage caused. This is how you can get really big numbers like $145bn. https://www.ncbi.nlm.nih.gov/pmc/articles/PMC1118202/
(That size of damages terrified various other companies with liability problems, who quickly got the law changed to minimize the range of things they could potentially be held liable for as a result of their products: https://en.wikipedia.org/wiki/Protection_of_Lawful_Commerce_... )
If everyone who had a claim actually arbitrated every time, it would be much more expensive for companies to handle than settling an entire class of claims all at once. The problem is companies know most people will not make a claim if it takes them any significant effort, and if the reward amount won’t be very large.
This happened to Intuit. Couldn't have happened to a nicer group of people /s. https://www.reuters.com/article/legal-us-otc-intuit/l-a-sant...
[0]: https://news.sccgov.org/news-release/santa-clara-county-coun...
I once had an attorney, a very successful attorney, tell me that he’s a big fan of laying cards on the table right away. The rationale is that he either wants to know why he’s going to lose early or show the other party why they are going to lose early.
In a case like this, where it seems like OP has all the information to prove that these guys are simply in the wrong, I come out guns blazing. I Layout the whole timeline with screenshots and copies of emails, very detailed. Then I make the ask with some snarky closing line like, “if you’d like to avoid the inevitable judgment that will be rendered against you, please contact my office to facilitate payment.”
You make a demand, and you justify it based on the facts and law, and then you stick to it or make minor concessions until you reach your end result.
For what it is worth, it doesn’t affect me at all how much I pay out. It’s not part of my job objective to pay the least possible. If I can justify it, I can get it authorized.
It's incredibly dumb. But it works.
The judgement may be inevitable, but a wealthy corporation may have the resources to keep the lawsuit in the courts long enough to bankrupt you or until you die of old age.
Which is the advantage of arbitration.
Someone has run a terrific PR campaign to convince Americans it’s hopelessly corrupt. It’s not. It’s a venue that makes what you described impossible.
From what I've seen, a perspective of I've collected a bunch of evidence that I'll refer to, but not actually provide, does seem to correlate with those with baseless claims, or those possibly trying to scam the corporation. This is anecdotal from my experience, but has happened more than once. In this case, it might be slightly irrelevant, because the insurer probably has easily verifiably facts on their side to know the calls happened, and the computers were a problem, etc.
But something like the invoice that's being claimed, is an important piece of information. We may want to know what work was done, was it in scope of our responsibilities, call the plumber and verify their credentials, ask them for details not documented, etc. If we have any suspicion the individual is trying to defraud us, not knowing the evidence that supports the amount claimed makes it really difficult to agree to. And if this goes on for a long time, it may be difficult to follow up on those facts.
I don't know about the rules around arbitration specifically, but if this hadn't settled, there may be deadlines involved just like the courts. And anything your doing to make the other side unprepared or to ambush them may be held against you. I don't know that it means you have to lay out everything on day 1, but I wouldn't want to leave anything to the last minute and allow even an argument that I prejudiced the other side by knowingly withholding relevant information.
If I can punish companies for bad behaviour and harm their pocket this way, It would be much better.
I will say, while I am generally not anti-arbitration, I do think it has its limits, and when it is used as a tool to suppress information that should be out in the public, I am completely opposed to it.
The Example I often use are cases where an individual is suffering severe sexual-harassment. If that person is forced into arbitration, unable to share their story (confidentiality required), and hamstrung in prosecuting their claims by the arbitration process, that’s a losing situation for the entirety of society.
Meaning that $50k judgement would become a $25k bill.
Yeah, I was sad to realize that.
But! Your advice is absolutely worth taking anyway. I did, and the company paid me the moment I said I was starting the arbitration process. It was a bluff, and sometimes you need to be willing to bluff.
On the other hand, I was so upset at them that I might’ve just gone through the process regardless. So I guess it helps if you yourself aren’t sure whether it’s a bluff, since they definitely won’t know either.
Edit 2: Confirmed (see comment above)
Which contract? The one you did the arbitration?
If the consumer law says the winner has to pay the fees, how can such a clause be legal?
I’ve never seen anything like that in all of my arbitrations.
What you will see for B2B claims (not consumer claims) is an agreement that the parties will split the cost of arbitration. But that’s different than their respective attorneys please.
You're right. It says "Each will separately pay their own counsel fees and expenses." I was focused on the part that said "Company and Contractor will each pay one-half of the costs and the expenses of arbitration." Wouldn't a $50k judgement be considered an expense? I suppose not, but it's all quite confusing for non-lawyers.
The 50% clause was confusing enough that when I went to someone for advice, they mentioned that it would limit my upside. Here's the full advice I got from them. (They were relaying what their father said, who is a lawyer.)
> He said $10k is a little small to bother recouping Bc you might burn thru 20% just retaining a lawyer + covering half of initial arbitration fees
> And arbitration—if it happens, and if it’s extensive—will absolutely burn thru the rest
> He said your best bet was a friend or young out-of-law-school kid without a crazy hourly rate to help out, make a few calls, make sure the company is willing to move forward with arbitration
> But, if they are, it might not be worth it…
> Unlike mediation—where a neutral third party tries to guide the parties to a resolution before arbitration—arbitration is adversarial, involves a legal decision, and will require things like discovery (surfacing all the relevant facts + documentation etc.)
> He said arbitration can be as expensive + complex as regular ol’ litigation
> Grain of salt from a non-Washington lawyer who probably did most of his work in a different scale / context, but in case it’s helpful
> Your agreement says you half to cover half of arbitration costs, separate from your lawyer, unfortunately. Some agreements split cost disproportionally between winner + loser, but this one doesn’t (I think, skimmed), and even if it did it would be a risky / ambitious gambit
However, that can still limit your upside. If the arbitration fees are $5,000, then you're paying $2,500 win, lose, or draw, and so that has to be factored into your calculations.
And if it's not, you're back in arbitration...
When Peña downloaded the Bird app and agreed to its terms in August 2018, he unwittingly indemnified Bird against any lawsuits. Bird now claims that Peña owes the company $322,171, the amount it has spent so far defending Los Angeles against the lawsuit.
https://news.ycombinator.com/item?id=30908416
That said:
that same law says you can get attorneys’ fees too, the company knows that they could be facing a 50k+ judgment at the end (almost entirely comprising attorneys’ fees), and then that often incentivizes earlier, higher settlements.
This is awful, in my opinion. We really should consider redesigning our legal systems once every century or so. This sort of thing is a result of lawyers making their own rules for too long.
As an example... When I was selecting a mortgage company a couple years ago one of the large providers who is newer, and started out in higher ed loans, seemed to have a very sloppy process. They did a lot of things via email that likely shouldn't be done which opened up the avenue for them to send my SO and I emails of PDFs that included our SSNs in them. Needless to say I stopped the mortgage process with them right there and, ended up using a local credit union. However, I threatened legal recourse in a state that doesn't have great privacy laws based on the obvious "leak". When they asked for proof I pointed out that the email headers contained 5 intermediaries that were out of their control between sending and receipt. The company sent us each a check for $4k and part of my stipulations were that we would not sign anything in exchange. I was surprised how easy it was and almost felt as though I left money on the table. But I'm curious if you see a particular area that consumers can push back on when companies are negligent with customer data?
The problem is that, generally, the law thinks in terms of damages. So this mortgage company was being reckless with private information, but were you harmed by it? If the answer is "no," oftentimes the claim is dead on arrival.
Of course, we all know that a data breach might not yield harm for 12+ months (when the data is sold on a black market and then used nefariously). But the law isn't well equipped for these types of situations.
I'm sure that the answer is "both of course", but just want to hear how these kinds of early settlements pan out in your experience. I imagine that the ~$50k judgement you used as an example might be for lawyer fees when it has gone to judgement, but is it even worth most lawyers' time if it doesn't go that far? Couple hundred bucks to send a letter vs hundreds of bucks an hour doing something more consistent? Or is all this pretty boilerplate stuff?
Worse yet, could they string you along and wait till the last minute to settle, thus increasing your lawyer fees potentially beyond the value of the original claim?
And, again, typically, you don't "owe" attorneys' fees. It's a contingency (percentage) agreement. So if you settle at the 11th hour for $10,000, you have agreed to pay the lawyer a percentage of that figure, not necessarily what they would have asked for as attorneys' fees at a trial/hearing.
IANAL, but my understanding is that the default rule in the US is "each party pays for their own lawyers, regardless of who wins"[0]. Of course, the specifics would depend on the actual terms of the settlement agreement.
[0] https://en.wikipedia.org/wiki/American_rule_(attorney%27s_fe...
I'm going to say something like "if we win, my client is going to get $6,000, and I'll have a claim for fees of $20,000 (based on my time in the claim so far)." So then I'm going to use that as a basis to make a settlement demand of $30,000.
And then we play negotiation ping pong. I'm likely going to discount the portion I attribute to my fees because they're uncertain (what if I lose?). And then the client ultimately makes an individualized decision wheter we settle and on what terms.
Could you please elaborate on how that works? To continue your example story, let's say you decide that rather than $20k you're willing to settle with taking $15k for your fees; and let's say they counter your $30k offer with "$20k take it or leave it". Do you then give the client a choice of "you get $5k instead of $6k if we settle, your choice between that or going to court"? Which could equally be "you get $1k instead of $6k" if you earlier decided to only lower your fee for settling from $20k to $19k?
Or does the client actually get more power than that somehow / at what stages do they get info & get to make what decisions or proposals?
(edit: and I'm just asking for curiosity since I'm not in the US, but maybe you could also clarify if what you're saying is true for the US or just for your state?)
The reality is, if you bring an action, the worst case outcome is basically: You lose. Yup, losing sucks. But... that's it. It's not going to trash your credit record, cause your significant other to leave, get you held back a grade, result in being grounded, kill your job (barring bring arbitration against your employer, of course, even if law forbids it), etc. etc. Your brain may incorrectly assess the stakes as being far higher than they are because of the form of the matter. You may need to consciously control those patterns.
But if you want to be able to hold companies accountable, this is a big tool in your belt and if more people used it we'd probably see companies being less bold in screwing their customers over. It's a losing proposition for them from the moment you file. I certainly don't encourage frivolous filings, but by all means, when it isn't frivolous, think of it as a pro-social, pro-consumer action that you can take to bring companies to task and in at least in some small way represent other consumers who they probably screwed over too, but don't have the wherewithal to file arbitrations of their own.
-listen to your story : 1 hr.\\ -read your documents .5 \\ -follow up questions .25 \\ -draft request for arbitration .5 \\ -review rules .5 \\ -respond to correspondence, select arbitrator 1. -respond to answer from Defendant .5 \\ -schedule arbitration .25 \\ -hearing 2. \\ -request payment .5 total: 5.5
This is an extremely conservative estimate. At $100/hr, that's $550. Good luck finding a lawyer who will charge $100/per and it's much more likely that time estimate is off. Double it, plus... So your legal costs at a minimum are going to hit $1000. On a $2000 claim.
and if payment isn't made, there's a whole 'nuther round...
These cases just aren't economical for lawyers, unless you specialize in them and do nothing but crank them out.
They also said they do the work on a contingency basis. If that is common practice one is out only their time if speaking to an attorney.
If there's a health issue with a kid, I send the arbitrator an email and ask for 7 more days. No formal "motion for continuance pursuant to local rule 8.9(c)(3)(f)."
Lastly, I agree that this a tool. I like to think of arbitration, in this context, as the best customer service tool out there. Remember back when the hack was that you send a letter to the office of the president and that got you a competent response? Arbitration is like that on steroids.
I’m not a lawyer or a legal expert or even believe the judicial system is always fair. But at least it’s open and rules are well laid. So as a layman, why should I believe arbitration? (Genuine question; not a judgment)
I can't remember what article I read ages ago, not this one, but this one seems to say the same thing from skimming the top https://news.bloomberglaw.com/daily-labor-report/jpmorgan-fa...
Instead of companies defending one class action suit, they (potentially) defend 1000s of individual disputes in arbitration and it ends up costing them more.
I'm just guessing here, I have no idea, if OP didn't settle and lost, it would have cost the company more than what they paid to settle.
These days I'd image you could do the arbitration over a video call. Easily worth my time for $2000.
[1] https://www.wallacefrancis.com/the-great-arbitration-scam
Sure, arbitration is fine -- give two parties more options to come to an agreement. But mandatory binding arbitration that explicitly contractually removes any way to resort to a full court? That's what I think is wrong.
If two parties don't come to an agreement in arbitration then they should always have the option to go to full court and incur the costs and headaches of doing so. Having that option would, I think, make arbitration far more desirable than it currently is.
The part that really irks me is not about possibly losing, but all the time wasted in the process. I see a lot of protections in the spirit of "get your money back", but no one is going to compensate for the time spent to get that money.
Depending on the amount of money, customers might not attempt to file these cases so that they can cut their losses early. Companies knows these too, which is why contracts and customer support channels are often designed to waste your time. I know people who would still go after companies purely on principle, but that is a tiresome way to live.
One click to sue would be great. Class-action lawsuits are on the right track but they scale on behalf of courts and companies, not consumers.
An absolutely laudable and supportable position. Firms get away with garbage behavior because almost no one takes out the trash, so to speak. If they did, the behavior would shift dramatically.
What about having to pay the attorney fees?
I've seen this attitude in the padnemic and it's certainly weird. Health departments ride on that, and fail to do professional due diligence.
Context: There was a vaccine finders group for my region.. I mentioned a few helpful hints for those concerned at going to get the vaccine. (Being in contact with others is a risk). I suggested respirators (N95s, KN95s,KF94s). But the response I got before was "what is your credentials?! you're not a doctor! health department person x doesn't say that". I could point to numerous studies showing the effectiveness but if you're not a credentialed person.. sigh.
When I talk about the health department people, many of them just parroted what they heard from the CDC's dubious advice.
They're risk averse. You don't have to threaten a lawyer and you shouldn't). Just letting a lawyer know you exist and have a legitimate problem that could blow up in their face, can often be enough to magically resolve issues. They almost always have a public email address.
Maybe it's better to go after them with the parent posts laws, but sometimes you just want your issue resolved. I can tell you that very few teams will argue once they get an email from the General Counsel.
See also, patio11's post about being a dangerous professional[0]. One of the best pieces of writing on the subject.
[0]: https://www.kalzumeus.com/2017/09/09/identity-theft-credit-r...
Wait. You could lose. Doesn't that mean YOU could be responsible for THEIR lawyer fees too? EG. If you lose, your lawyer shrugs their shoulders and walks, you are stuck paying the 50k?
You’re generally only responsible for the defendants legal fees if your suit was unfounded and purposefully used to disrupt or harm your legal opponent, rather than to seek remedy in good faith.
The defendant can be made to be responsible for your legal fees because those fees were “caused” by their action/inaction which was the unlawful source of harm that you are suing about.
Because the defendant “caused” the lawsuit as a direct result of their original actions against you. All costs that follow from their original harm are owed by them to make you whole.
If you bring a lawsuit as a plaintiff and lose, as long as it was a reasonably well founded lawsuit, there’s nothing to point to and say “ah ha! You injured me with your lawsuit that I won”. Because everything that happened was perfectly within everyone’s right (to bring a reasonable lawsuit but fail to secure a win).
Your comments here are incredibly enlightening, thank you for sharing! Can you speak to how to find a good attorney for this kind of thing, or really for any legal needs? Like where to go to find people willing to do arbitration and maybe how to determine if they’re good. I’ve hired a lawyer in the past for some employment contract work, and it was worth every penny, but found out it was rather difficult to find someone who could help. I had to cold call a lot of people who weren’t interested or said they weren’t qualified. It felt like the lawyers or firms I spoke to were mostly looking for a longer term relationship.
It's very challenging finding a lawyer in a lot of these consumer protection spaces, because, for a whole host of reasons, there's not a lot of money here.
Having said that, one piece of advice I always like to give when looking for any professional is to use your network. If you have people in your network you trust, use them as a starting point. So, for example, I don't do criminal law. But, as a lawyer, I know lots of criminal lawyers (insert joke), and I also have a well-tuned BS detector when talking with other lawyers. So even though I can't help you, you'd be smart to reach out to me because I can help you find the right person much more effectively. And if I can't, then I reach out to a criminal law attorney I know, link you up, and let that person make a recommendation.
In short, use your network to leverage experience and knowledge to zero in on a good attorney. It will probably take a few degrees of connection, but if the chain is solid, you should get a good end result.
For example, I recently had a client who needed a criminal law attorney in a state where I don't practice. So you have two issues: one, I don't know that legal community, and two, I don't do criminal law. But, I reached out in my network to a prosecutor in New York. Now this prosecutor can't represent my client, but now I have a criminal law attorney in the right state, and so his network is going to help. My buddy (lawyer 2) reaches out to his network, and one of his trusted contacts says "call lawyer 3)." My buddy (lawyer 2) doesn't know lawyer 3, but he trusts his network and the referrer. Long story short, my client ends up represented by lawyer 3, and well taken care of.
I am planning to go to AAA with a claim against an online ticket sales company that scammed my mother - I have screenshot evidence that they violated an FTC consent decree in the process. Amusingly the consent decree also mandates them to keep detailed logs on their behavior for 10 years so they should have excellent records as well.
I already spoke to senior attorneys at the FTC about it, but they couldn't really say anything back, and my understanding is that arbitration is the best option for my family to seek relief.
Would you be interested in this or have a recommendation for an attorney? I had planned to do it alone but your comment made me completely reconsider.
My email is in my profile
Question: sometimes I'll have attorneys approach me at court when I'm on a case that's an obvious winner (and has statutory legal fees, which I can't claim because I'm not represented) and offer to take the case on so they'll get the fees, and then split the fees with me (and let me keep the damages).
Is there any reason why this would not be legal? I've not done it yet simply because I like to litigate everything myself to make a point that it's possible, but sometimes you get a judge that really hates unrepresented people and a lawyer would change the game.
Fascinating! I've only ever seen this criticized as a horrible idea. Are you operating in a specific area that you're skilled in? I assume you must have a decent win ratio.
Ethics rules vary state to state. And, generally, a lawyer cannot split attorneys' fees with a non-lawyer. However, I'm aware of some jurisdictions that have exceptions to this rule, and perhaps, depending on the details, that might give them an out from the general prohibition.
But what you're describing is exactly the point I'm making. Having an attorney can often be a way to uncap your upside potential. If you can make the numbers work with the lawyer, then it's a win-win.
If I ever need an arbitration attorney, do you recommend (1) focusing on finding someone local or (2) finding someone specific to arbitration regardless of location?
Also, if I lose, am I on the hook for the attorney fee? Or do I ask the attorney to take the risk and only collect a fee if we win?
Put differently, I feel much more like a fish out of water when I'm out of an arbitration context I have a lot of familiarity I'm with than when I'm under a different state's laws.
Thankfully we didn't (directly, I know it's our money in there somewhere) buy a warranty when we got our house last year.
I knew the AC was on its last legs from inspection, and no problem, since it was an older 80% old refrigerant system, probably closing on 30 years old. Figured it could wait one summer, in between all the other purchases with a new home.
Then last year Seattle decided to have a heat wave. Maybe not much for those in Phoenix, but four days in a row of 105F+. That's still hot.
And it's even hotter when you have no AC, as ours died a couple of hours into day 1.
So I call the HWC. They "are having trouble" finding someone for "emergency service". Their idea of "emergency service" is "we have a company that will be out there in four WEEKS".
So I found someone who could come out that day, for a surcharge. Reasonable. And the AC was dead. But this company were nice - the tech said "no promises, no commitments" and he did some shifty magic and got it running for about six more hours before it was permanently to the graveyard.
So we started getting quotes for a new HVAC system.
Responses from the HWC company:
- we won't pay if you don't use our suppliers
- we won't pay if you don't choose from our list of models (which were all low end, 80%, 1 stage systems)
- even if you use our supplier, we won't pay above an agreed amount
- if you used another contractor for ANY maintenance work on the existing system, we won't pay
- if the maintenance schedule wasn't followed (whether you owned the system/property at the time), we won't pay
Three (and a half) words are common across each of those bullet points, as you can probably surmise.
That's a mischaracterization about the problem with arbitration. People are not scared of it. People are not afraid. It's shameful that you use language like this accuse the people of being afraid and scared. You can't claim to be an attorney and then say you didn't understand the meaning behind the words you chose to use.
Consumer arbitration is corruption. People correctly understand that when one side is paying money to the judge, that the system is corrupt. It's about buying the judge, the court room, and the whole system.
The problems with consumer arbitration are well documented. Being scared is not one of those problems. People are angry.
https://en.wikipedia.org/wiki/Consumer_arbitration
Apart from anything else, it creates information asymmetry - your opponent certainly won't tip their hand to you until they feel the time is right.
And you leave yourself open to bluffing. If you blab everything, and then the other side steps it up and comes after you harder, you'll be left wondering - they know everything, but they're doubling down - am I missing something? Gee, they must have a stronger case than I thought.
I’ve had people tell me outright lies, which puts them in a difficult negotiating position when you can prove it. But the lies would not have been told (and my negotiating position not strengthened) if all the evidence was laid out up front.
Hiding information from an adversary has few downsides, as long as you keep your goals clear. You can always provide more information later. But you can never take information back.
In hindsight, it may not have mattered. After all, I was going up against lawyers. thathndude, who has the top comment and is a lawyer, has a different perspective.
If you take nothing else away from this article this a great point.
I once had an issue where two different electricity companies believed they were supplying our University flat. This turned out to be due to the mess of naming systems involved in Edinburgh flats where two apparently identical flats had meter numbers. Eventually I was able to extract this information from the call handlers but only after a ridiculous number of calls.
This got far better when I started taking names and extension numbers so that I could skip the intro session on each call and speak directly to someone who knew the situation. Taking careful notes of who I spoke to and when.
For about 2 years later I'd still get the hard sell from some debt collectors telling me that I could just pay the £2000 and it would all be over...
In the end I got pissed and kept asking for more senior people til I got to some director of something or other, I explained what had happened, that I had all the evidence (bank statements showing I'd paid, their inability to meter coherently etc) and that my next call was going to be a solicitor and ofgem if it wasn't resolved.
They zeroed the account (which worked in my favour somewhat since I had used some of it, came and got an accurate meter reading and apologised.
Turned out later I was caught up in this shitshow on their side: https://www.ofgem.gov.uk/publications/npower-pay-ps26m-faili...
So yes, keep everything is good advice.
I recently had a case where my client, who uses a service dog, was denied a hotel reservation because of the dog. The hotel’s attorney called me and said “I spoke with the other person, she said this never happened, and he never said it was a service animal.” Well, my client, due to his disability, uses a telephone system that records all of his calls. I sent over the recording, and it clearly showed that he identified a service animal, and the person just said “no.” Now that lawyer knows his client’s a liar.
It's simply brilliant. It plugs into any recorder with 3.5mm plug and because it's device you have in your ear it works with any call (normal phone call, WhatsApp whatever). Reporters routinely use it with Olympus voice recorders to make phone interviews.
I highly recommend.
Make sure you are aware of the relevant laws regarding recording phone conversations.
Having said that, thanks for the equipment tip!
Yes. If you're recording a call and it says "Your calls may be recorded" from their end that would be an open and shut argument that they've given permission for you to record the call.
The earpiece has a good microphone that captures both sides.
I was skeptical at first, but It just works. It records both sides of conversation well.
https://www.pcmag.com/news/google-is-banning-call-recording-...
iOS used to have this capability for jail-broken devices way back in the day; not sure if it still does.
I'm guessing that the state-level consent laws make it difficult for Apple and Google to bake in phone recording.
In my case, someone had mistyped a meter number (matching mine) when signing a new contract with a power company. I got a message from my existing provider that I would be transferred there. I called the new company to explain that it was a mistake, and they seemed happy to fix it. I had to jump through some hoops (get a key to the power panel for the building to take a picture of my meter and stuff), but thought it was okay to get it resolved.
But it didn't work, later I got a letter addressed to the apartment, saying I owned the new company money. I gave them a call, and they didn't really want to fix it, just get their money, and make me do additional stuff to prove I hadn't signed with them. It was then I could say something along the line of "We don't have a contract, which is YOUR problem. As far as I'm concerned I'm getting free electricity until you fix this". Of course I could only say this because legally they can't cut the power here during winter.
But when it became their problem of losing money, it was fixed without issues.
I often wonder, how much time and fuel is wasted on this nonsense in the US. Couldn't they have just.....sent him the money directly? You know, like in literally every other country in the world?
The amount of money spent on overnight mailing in the legal profession is astonishing.
I don't know if this is true (I heard it from a local), but for decades there was not a single ATM on the Falkland islands. The local bank said ATMs just don't work on remote islands. So a Stanley petrol station took the matter into their own hands and just bought one. ATMs don't care if you're on an island, you just plug them in, put money in them and then people take it out. I can at least verify that that part is true because I was there, saw the machine and got money out of it.
Another personal anecdote is an industrial application where safety critical updates had to be received on DVD-Rs that were routinely left unsupervised with untrusted intermediaries in very shady parts of the world. I suggested putting a message authentication code to ensure it hadn't been tampered with. The industry professional I was talking to would hear none of it, thinking the only way would be to transfer the entire contents of the disk over a very expensive satellite link to the head office and have it compared bit by bit. That MACs are a real thing that actually works, and that sending the data back and forth and comparing isn't actually secure unless a MAC is also used was like water off the goose.
we do...
Yep, it doesn't work like that at all in the US. A threat of going to court might get you the refund. No way are are they paying for your time voluntarily.
Normally these things are written so that it’s impossible for the company to do anything wrong (at least all the ones I’ve ever read).
I have seen so many contracts with unenforceable clauses, made up gibberish, illegal demands. Then a fancy pants "if any part of this contract is unenforceable, the rest shall remain in effect" or some such.
Two things here.
First is? While I have seen courts toss the whole contract regardless, mostly because key invalidated clauses unbalanced the contract, I'd like to see this legislatively made illegal. Why?
Because second thing is, I've seen companies write contracts knowing some clauses are unenforcable, but putting them there to scare, to intimidate.
Literally, it is an attempt to play "their game". Especially with ridiculous terms of service, eg, not a real contract in most parts of the world.
So don't play their game. Don't presume the contract is valid, or legal, especially when the balance of power is unequal.
"It is better that ten guilty persons escape than that one innocent suffer". We should _definitely_ err on the side of leniency on this. If my employment contract isn't watertight because of a law change, or a discrepency in an unrelated clause, should my employer be able to renege on my pay because the contract is invalid?
An example, intent. If there is a 20 email long chain, discussing a clause in a contract, that counts too. What was the intent of both parties?
And don't let clauses such as "this contract is in whole the agreement between all parties" deter, because courts don't care when establishing intent.
So, what was the intent of the contract? Was an offer proffered, then follow by contract? What was the intent of the offer?
Courts look at invalidated clauses, and then attempt to rebalance the contract.
These clauses are just scare tactics, and have been happening since Rome, where most of our laws originate...
I have seen so many lawyers argue "might as well put it in, can't hurt!".
Sometimes the best contract is a one liner scribbled on a napkin. All this excess is counter to the public good.
What if the contract includes a statement: "this agreement consititute the entire agreement between the parties and supersedes, merges, and replaces all prior oral or written agreements, negotiations, offers, representations, etc. with respect to the subject matter. No course of dealing between the parties, no usage of trade, or outside evidence of any nature shall be used to modify, interpret, or supplement blah blahb lahblhbjajk"
Yeah that 20 email chain? The contract specifically says it can't be included in the agreement. Bringing that up was a fun conversation when negotiating the contract...
2) Context counts.
Contracts are interpreted documents. What both parties meant in clause 1.3.1, must be interpreted, to be enforced by a court.
A 20 long email chain provides context. What did the parties really mean, when they signed?
So are you suggesting that when considering the validity of a contract, externalities should be considered (e.g. the 20 email chain), but the actual document that was signed should not be considered?
What I effectively did say, is that contracts exist in context. That context counts.
See my other reply.
I don’t presume this at all, but saying ‘this clause is unenforceable because x, y and z’ is much more work than saying, ‘look, your own contract says you failed to uphold your end of the deal’.
Mostly because you likely have to search through tons of laws to find x, y and z. As convoluted as contract language is, a whole legal handbook is much more so.
Yes, and sadly decluttering and simplifying law isn't trivial, or perhaps even doable.
To be sure, it’s not the rainbows and butterflies solution that the businesses would like you to believe it is. But it’s also not the insane, unending trampling of rights that anti-arbitration folks claim it is.
> 4) Don’t get a home warranty.
Sellers are basically obligated to provide them, because it's what everybody does. They serve to lubricate a deal with a checkbox, while releasing the seller from some obligations.
I'm pretty sure selling RE agents get a percentage on referrals (in US). I sold a house without an agent and phoned one of these companies to simply buy a warranty to hand to my house buyer. They were baffled how to do this without my agent id number until some manager said just sell it to him.
The whole thing is a reception line of parasites waiting for some homebuyer blood.
A couple of years ago a family friend in Florida says "Oh yes, we never make an offer until the second showing." Ha ha ha.
And several friends and family have purchased real estate in the last few months; again no home warranty offered or expected in those transactions.
I've been shopping since September last year and watched the market shift as low interest rates stopped recently. There was a seasonal dip in December 2021, but it was still about 20% higher than even highs of previous years as people scrambled to get good loans before they ended. It was definitely a seller's market. My agent said many winning deals were waiving financing contingencies and even inspection contingencies to sweeten the offer. Home warranties would have been one of the first things dropped.
Not total reimbursements, and I don't recommend the warranties unless you likewise have a complete set of appliances past their expected lifetimes. But like anything else, use a tool in the right place, in the right way, and it serves its purpose.
As an aside, shortly before I filed, I told one of the customer service reps to cancel my contract. They said a manager would call me (I assume a retention specialist) but they never did. Coincidentally, my credit card expired and I just figured I'd cancel the contract that way.
For months I got emails and eventually calls from them telling me my credit card expired. I'm like, "I just had to file an arbitration case against you fuckers. Can't you read my account notes?" But after dealing with those reps, I concluded that no, they can't read my account notes.
Contacts are awesome. I got humanitarian aid logistics training and the teacher taught us: always make a written contract, for any agreement. You don't need to be a lawyer to make a useful contact. The process of writing and signing it clarifies the situation to you and the counterparty. Most disagreements can be solved in informal arbitration, especially when one party can show, look we agreed to this and then I did this and you did that. Humans do better removing emotion and ego when there's some rules written down.
I also faced a situation where the contract a former logistician had entered into had become wildly unfair to the vendor, not through his fault. He started giving me problems and I offered to break the contract and find a new compromise that met my needs and his. Happiness all around, for a small amount of reasonable, ethical cost to my organization.
This always annoys me; a 100 sellers for every person working in any type of customer care/support role seems to be the norm. If you can actually get in contact with someone in customer care/support their job always seem to be to brush you off nicely, not really help you.
In my case, asking nicely, like in this case, was a huge fail.
How do you record the phone conversations?
I remember Android doesn't really allow you to record the other party audio, only your own. Unless you write your own caller app that processes the audio, but not sure how easy it is to send the audio to default phone caller after. Apple probably does it too.
There needs to be a dedicated "caller" app, and that app must be visibly different from default caller app.
2022-May-31 @ 11:09 AM: Spoke with X via phone, was informed their system was down and they could not accept my claim.
Recordings of the calls themselves can get murky legally, and are technically challenging, but in my experience factual notes are sufficient.
If you're involved in a multi-million dollar lawsuit, sure you'll nitpick with lawyers about the content of the call, but for a few grand, no one's going to argue with you.
There's also too many headaches with recording calls. Dealing with one party vs. two party states, etc.
It's mind-blowing to me how the US still relies heavily on these.
That seems like your main problem. Fix that. That's insane and not possible here.
...
> [...] I counter-offered 80% plus arbitration filing fee reimbursement. The next day, they responded back with an acceptance and sent over a release form. Case pretty much closed. I didn’t get 100% back, [...]
So author had to jump through hoops and in the end only got a percentage of what was owed. The text is written in the format of a feel-good success story, but the result is the oposite. What is described is a broken system, if the only punishment for the crime is to do what they should have done in the first place then there is no incentive for companies to do the right thing to begin with. Customer protection laws absolutely need a clause for double the reimbursement and I'm shocked that this person's country (I'm assuming it is the USA) doesn't have it. Without such a clause it is best for the company to just deny ALL claims and profit out of the people too lazy to go through arbitration.
This has nothing to do with corporations. If you decided to only do business with natural persons you’d have the same burden of proof.
I had a situation almost identical to this where I had an AC that gave out and after a month with the warranty company, I just fixed it myself. Because it was July. In the southern United States. I didn't even know about arbitration. I just assumed the black whole of rotating customer service agents and canned answers is the end of the line.
Paying 20% of what is not your responsibility to pay is still losing. It's just losing less.
In addition, there was the author's time without hot water, time spent on customer service, time spent figuring out how to file an AA case, and stress.
Any sort of out clause that the have to not pay a claim, they will try to use. In this case, it was "you didn't get a preauth." This makes it by no means a binary, black/white issue contrary to what a stereotypical HNer believes.
As far as a national consumer protection law that doubles reimbursement, good luck. I'm shocked that foreigners are shocked when they hear that the US actually has very few national laws. The country is big, diverse, and the regional histories that bought the states together, and grew, is too varied. The system is set up so that the states handle most legal issues. I for one am fine with that.
Bizarre.
A bit OT:
But ESPECIALLY the rental market - professional or private - is horrible on this. Before purchasing my home, I had rented 7 different apartments over the years.
No mater how thorough I'd be on washing out apartment, or how careful I'd be with it, they would always find something - and claim deductions on the deposit.
This worked for the first apartment I rented - after that I got wiser, and took pictures of everything before actually moving in. Better yet, with the landlord or representative as witness. Document everything. I even recorded the phone conversation - informing that the conversation would be recorded, and if that was a problem, we'd take everything in writing.
This saved me lots of deposits. Like clockwork, I'd be informed that they found something - sending evidence. I'd reply back with my evidence, and suddenly everything's OK.
Remember I read that in a novel as a teenager, and since then I've always complained if I get rejected. Almost always work, as they then finally actually look at your situation. And if it doesn't work, I keep going until they realize making me whole will be less costly than the time I make them spend.
Had to look it up, the novel was "The Rainmaker" by John Grisham.
Rate the expected value of all insurance services at $0, that's my approach. (I guess you could call that giving up on step zero!) Why bother doing business with people whose profit model consists of taking your money now so they can decline to return it later? The better they are at their jobs, the worse a deal it is for you.
I will continue happily paying my insurance premiums, and ardently hope that I never get any of that money back.
Of course, there may be specific types of insurance/warrantee programs that are a bad idea for one reason or another, but that's not an argument against insurance in general.
A lot of people must give up here. I had a car totaled by a hit-and-run driver and the insurance company wanted me to settle for $10k less than the car was clearly worth. (I had lots of proof of this.) It took a month of me telling the adjuster "I'm not settling" before I got that $10k. It was the most infuriating customer-company relationship encounter I had ever had. I felt like the person was intentionally misunderstanding me and making false statements. I tried to get to their manager a few times, but they wouldn't. It was clear that the person's manager was in complete agreement with the course this situation was taking.
So I asked to see comps. Sure enough, all but one of the comps was in that ballpark, from about 3-4 under, to nearly 30.
Except one. Which was about 140 miles away, and listed for $11,500. Clearly a salvage or rebuild or something (water damage, whatever, obviously not accurate). Dragging the average down like a boat anchor.
"The ad doesn't say Salvage Title so it's a valid comp."
They just kept repeating that like a broken record.
I definitely recognize the "broken record" part of your comment!
What the author did. Take them to arbitration.
If you were an idiot and opted out of arbitration you’ll need to spend a lot of money going through the courts. If you didn’t, you may be able to get representation on a contingency basis.
I manage a property in a college town. Most of my tenants are first time renters just moving out of the dorms, so they've never learned these hard lessons before. I try to help them out by telling them about how they can get screwed on deposits, and tell them to take pictures of any damage they find and print it out so I can sign it.
I just hope they take that lesson with them after they leave my place.
Also I remind them that they have a right to a walk through at the end of the lease and never charge an item on a deposit that I haven't discussed with them first. I always give them a chance to fix it first. Usually they just say "bill me" (probably because it's their parents money) but sometimes they will fix it or they will help me fix it. It's a lot more work on my part, but on the flip side I'll have tenants messaging me a decade later thanking me for being honest and kind. So I guess it's all worth it.
I sat in a PMs office in a high rise I was moving out, waiting for them to take care of something.
I noticed my move-out inspection report (which we were ABOUT to do), oddly already filled, some. "Blinds - dirty, needed cleaning", "Carpet - stains not removed, needed cleaning", about half a dozen items which according to their "costs incurred" ate up most of my deposit. Oddly, since I knew they hadn't been in the apartment recently, even without my consent, because I'd been packing and cleaning. I'd even brought with me receipts for the carpet cleaning etc.
PM comes in, grabs some papers and a clipboard from her desk, including the form. "Let's go get started".
"Oh, while I was waiting, I apologize, my eyes must have caught that some of the paperwork on your desk was for us, so I looked over at it, and saw it was already filled out for the inspection?"
Umm, ahh, stammer, stammer. "Oh, how strange. I must have, uhh, photocopied a previous form without realizing it wasn't empty."
Didn't make any sense on any level, but whatever. We started with a new form, and I made sure that none of that BS made its way back on.
E.g. not having the authority, being the wrong person and sending you in another direction, putting the onus on you to move things forward, not responding to emails and calls, ignoring questions and selectively answering, not making contact details or policies available, and so on.
But, what about an extended car warranty?