E-scooter firms silence injured riders’ legal claims
The Bay Area has become a hub for innovation, but some of the area’s most progressive and forward-thinking companies — such as the e-scooter startups — are relying on outdated legal tactics to silence those being hurt by their technology.
What hasn’t gotten as much attention as electric bikes catching fire is that riders are learning — painfully — they may have little recourse against these private rental companies if they’re injured.
The apps’ “click-to-agree” clauses — which can consume more than 250 cellphone screens to read fully — force users to settle all disputes through confidential binding arbitration, effectively giving up their constitutional right to have their disputes resolved in a jury trial. Some of the user agreements say renters must take responsibility for all accidents and damage, and must accept a $100 limit on the companies’ liability.
It’s a legal straitjacket — and the latest example of a disturbing trend in consumer, service and workplace agreements that exempt corporations and their chieftains from jury trials enshrined by the U.S. Constitution’s Seventh Amendment. Instead, consumers are required to pursue their claims through arbitration, in which corporations can choose the venue and the arbitrator, all while preventing potential class action suits from arising.
By atomizing individual cases, forced arbitration has devastating effects on the consumer’s chances of getting a fair shake.
A Stanford University study of 9,000 financial arbitration claims found that corporations routinely gravitate toward arbitrators with a record of deciding in favor of the corporations
that selected them. This creates a feedback loop in which the most-biased arbitrators are guaranteed future business, incentivizing them to rule against consumers.
When used for workplace disputes, forced arbitration rulings rely on a secretive process that keeps complaints of sexual harassment or racial discrimination from getting much-needed wider scrutiny.
The effectiveness of forced arbitration in minimizing risk to corporations offers insight into why Bay Area scooter companies have been so quick to adopt these policies. It’s not to streamline innovation, but to keep them from having to pay their fair share when their negligence gets someone hurt.
At the American Board of Trial Advocates, we recognize that voluntary arbitration can be a viable alternative in certain fields after a dispute has arisen and both parties (aware of all of their options) agree to arbitration. Our concern, however, is when consumers and employees sign away their rights unknowingly or because of a massive disparity in negotiating power.
That’s why our organization has endorsed the Forced Arbitration Injustice Repeal Act recently introduced in Congress, an important step in leveling the playing field. It would bar pre-dispute arbitration agreements and class action waivers in consumer rights, employment, antitrust and civil rights cases.
These disputes should be settled in the open, with the evidence vetted by both sides. We are strong believers in using jury trials to reach solutions that are both just and satisfying to all parties. We’re encouraging the public to call on Congress to support the act. And, locally, share your concerns with your city council, which regulates these e-businesses.
Technology should be allowed to flourish but not to fuel a quick-profit business culture that may ignore safety defects and customer complaints. The best protection remains ensuring that everyone knows their rights and that access to a courtroom remains unimpeded by corporate obstacles and red tape.