Marotta-Wurgler on Ending the Use of Customer Arbitration

Marotta-Wurgler on Ending the Use of Customer Arbitration

A recent article published in the New York Times discusses Amazon’s change to its legal complaints process for its customers. Until recently, Amazon customers were required to pursue disputes with the company through a private arbitration process.

The article argues that companies began using the practice of arbitration as a way to prevent customers from participating in a class-action lawsuits. Companies use language in their contracts that mandates customers buying their services use the company’s arbitration process only. For many consumers making disputes, it does not make financial sense to hire a lawyer and pursue an arbitration claim as an individual. Legally, companies are allowed to do this by arguing that arbitration was fair for consumers. The Supreme Court has upheld the use of this legal technique.

Florencia Marotta-Wurgler, Reporter on the Consumer Contracts Restatement is quoted in the article, saying, “This is a big deal. For so long, the tide had been going the other way, with companies adding arbitration clauses to their contracts.”

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