2 Comments

This is one of those issues where your post makes far more sense than Fischer’s, which is his typical ignorant tripe. There are most assuredly significant problems with consumer class actions. There are most assuredly significant problems with coerced arbitration. Fischer, sadly, is clueless about any of them.

The problem with AT&T v. Concepcion isn’t whether arb is better than class actions, but whether contracts of adhesion in ordinary consumer transactions will rule the available recourse. Of course it will, and in many instances, will provide bad enterprises with a means of stealing millions, a dime at a time. And that still doesn’t make class actions that give their members a voucher for $1.39 to buy a new pickup truck a good alternative, which is why some crusaders (like Ted) are out there trying to keep class actions honest.

Now there’s a real solution.

My sense of the arbitration debate is that people equate judge, jury and litigation with justice. A trial is a device to make a decision and as such has type I and type II errors. Given a plaintiff $300 million for shortness of breath is a breathtaking error. Beyond that is the fantastically high cost of litigation that leads to extortionate settlements that benefit entrepreneurial lawyers.

The problem with shg’s comment above and with Elisabeth Warren’s wacky theories is the brushing off of the effect of competition. Whether some tiny element of a price is wrong in some sense, a viable provider has to keep his price in line with his competitors. Further providers of things with substantial markets have to engineer their wares to exacting standards, which development is beyond the kin of average people.