A Comprehensive New Book Exposes One of the Worst Pieces of the Modern Legal System
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Tort plaintiffs don’t have the best reputation. Think of the often-mocked woman who sued McDonald’s after she was burned by its coffee in 1992. Or, more recently, the case of one woman who sued after being overserved tequila on a Carnival cruise. She then was hurt when she fell, and sued the cruise line to recover for her injuries; the jury awarded her a six-figure judgment. When people hear about cases like this, is it any wonder that many have such negative opinions about attorneys?
But lawyers and lawsuits have also achieved stunning gains on behalf of the average consumer. Think of the tobacco litigation that publicized how cigarettes were poisoning Americans—a fact that Philip Morris and R.J. Reynolds well knew even as they collected profits. A Ford Pinto lawsuit helped bring to light the design flaw that was igniting cars and burning people to death. Asbestos lawsuits have helped to provide some compensation to mesothelioma victims. Even the McDonald’s lawsuit involved a real victim and a real injury, an elderly woman who was hospitalized for eight days after receiving third-degree burns, needing to receive skin grafts—and she was injured after McDonald’s had already received over 700 reports of customer injuries from the extreme temperatures at which it served its coffee.
Certainly, not all litigation is perfect. Some lawyers, in fact, can and do take advantage of tort victims in order to line their own pockets. But time and time again, regular Americans who have been harmed by big business have sought redress for their harms in court. Critically, court records are usually public, and court sessions open to the public. Consumer harms have therefore often become well known and widely reported by way of litigation in the courts.
But as the former federal prosecutor Brendan Ballou details in his new book, When Companies Run the Courts: How Forced Arbitration Became America’s Secret Justice System , this system of justice and public accountability has now effectively been largely eliminated across wide swaths of the economy. In its place is a pernicious system that purports to offer an easier, faster path to a resolution—but all too often is irretrievably biased toward finding that resolution in favor of corporations and at the expense of the consumer or employee. This is the system of forced arbitration.
As Ballou relates, forced arbitration has many flaws. Arbitrators who are employed time and time again by the same companies with a large number of contracts that require arbitration may be loath to rule against them and lose out on their next paycheck. Arbitration can keep plaintiffs from banding together into a class action, and in that way attracting a lawyer to take on their case for a large enough contingent fee. Arbitration is expensive. The associated fees can effectively bar a plaintiff from pursuing his or her case. Arbitration is also secret. When victims are forced into arbitration, others are denied the opportunity to learn from their experiences and avoid a financial loss, or a personal injury. Arbitration has also become a massive phenomenon, siphoning countless cases off from the courts into a shadowy, opaque system that nobody can ever truly fully observe.
Ironically, arbitration has come about ostensibly through willing agreement. Or so companies argue. In reality, provisions giving “consent” to arbitration are often contained within lengthy contracts and go unnoticed. Consumers also might not understand how these agreements might eventually affect their rights. As Ballou recounts, one husband whose wife had died of an allergic reaction sued the restaurant that had served her, along with Disney , who owned the restaurant property. Disney moved to compel the case into arbitration because years ago, the husband had subscribed to Disney+, and the subscription agreement contained an arbitration provision. Only after the case gained widespread media attention did the firm representing Disney agree to withdraw the motion .
Research shows that it’s not even realistic to expect consumers to be aware of all the provisions in form contracts that they’re asked to review and sign on a regular basis. One study , for example, looked at privacy policies posted on websites, which are just a subset of the agreements that consumers are asked to consent to. The study estimated that it would take the average consumer 244 hours a year to read all of them. That’s over 30 eight-hour workdays each year. While some contracts do contain provisions that allow consumers to opt out of forced arbitration, consumers may not understand why it’s important to take this step, and often fail to affirmatively take the necessary action to do so.
Arbitration’s takeover of the traditional functions of courts, as laid out by Ballou, has broader societal implications as well. The decisions reached in arbitration are often secret, and arbitrators are not usually required to write the sorts of publicly available opinions justifying the reasons for their decisions in the way that courts must. The courts are therefore deprived of a massive number of cases which could help shape and further consumer law were courts allowed to consider those matters instead of arbitrators.
What can one person do against all of this? First of all, when faced with a form agreement, consumers should look for the ability to opt out of forced arbitration provisions. Urge legislators to take action to limit mandatory arbitration, as when Congress enacted a law in 2022 prohibiting sexual harassment and sexual assault claims from being forced into arbitration. Share news stories like the one about the widower who subscribed to Disney+; even if companies care more about public opinion than doing what’s right, their vulnerability to public pressure can sometimes be used to result in a better outcome for the consumer. And read Brendan Ballou’s excellent book to learn more about what’s at stake.
