The Mercury News

E-scooter firms silence injured riders’ legal claims

- By Craig M. Peters, Cynthia McGuinn and Michael P. Maguire Craig M. Peters and Cynthia McGuinn are Bay Area attorneys. Michael P. Maguire is president of the American Board of Trial Advocates.

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some of the area’s most progressiv­e and forward-thinking companies — such as the e-scooter startups — are relying on outdated legal tactics to silence those being hurt by their technology.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.

 ?? BAY AREA NEWS GROUP FILE PHOTO ?? A man rides a rental scooter in downtown San Jose.
BAY AREA NEWS GROUP FILE PHOTO A man rides a rental scooter in downtown San Jose.

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