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arbitraryaccton A new weapon in arbitration: sheer volume

The $1500 doesn't go to the customers, it goes to the courts. It's effectively a fine that a customer can arbitrarily impose on a company.

arbitraryaccton A new weapon in arbitration: sheer volume

"this could definitely get ugly for companies that misbehave"

It doesn't just have to be companies that misbehave. If you don't like your competitor, maybe you'll sponsor that $250 per user to allow their userbase to throw arbitrations at them.

You can burn your competitor down at a ratio of at least 1:5 if you do something like this. If you take some fees for every case you win or that ends up settling, the ratio will be far better than 1:5

The arbitration system as it stands is a tool that allows anyone with enough money and intention to smite any company by pulling together unhappy users and paying arbitration fees for them.

arbitraryaccton A new weapon in arbitration: sheer volume

Not allowed

arbitraryaccton A new weapon in arbitration: sheer volume

Yes, when you file an arbitration against a company, regardless of how legitimate your filing is or how likely it is to be thrown out of court, that company is out at least $1000. If you wanted, you could pull together 10,000 HN users to file arbitrations, and HN is going to be hit with a $10M hammer regardless of whether there is any legitimacy to the claims.

I believe the amount varies state to state, but is generally over $1000

arbitraryaccton A new weapon in arbitration: sheer volume

Arbitration is extremely disruptive. If someone takes you to arbitration, you pay $1k non-refundable, simply because they want to take you to court.

If you do end up in court, it's another $20k just for JAMS fees. Again, non-refundable, doesn't matter if you win or lose.

So if someone is trying to take you to arbitration over less than $20k, it really doesn't matter AT ALL if they are right or not, it makes sense to settle for whatever amount you can convince them to agree to.

You can kill a company with frivolous arbitrations, just by having enough people willing to file one. Doesn't matter if those people have been wronged.