
Let Consumers Sue Companies - jseliger
https://www.nytimes.com/2017/08/22/opinion/let-consumers-sue-companies.html
======
flexie
In the EU you cannot bind consumers by such arbitration clauses: [http://eur-
lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A3...](http://eur-
lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A31993L0013)

Consumers can usually sue corporations at a court in their own jurisdiction.
Many European countries also allow class action law suits. Yet, we have few
law suits against corporations. There are other reasons for this:

\- consumers are not awarded punitive damages,

\- court fees are higher (usually a percentage of what you ask for),

\- if the consumers lose they pay not only their own lawyer, but (to an extent
decided by the court) also the lawyer representing the corporation,

\- many European countries have consumer "watchdogs" / ombudsmen, i.e. public
entities that have the authority to start cases against corporations,

\- many European countries have a variety of consumer complaint boards that
handle small claims efficiently and at low cost.

Few who know consumer matters in both the US and the EU would trade the
European system for the American.

~~~
dclowd9901
The EU system seems to be very anti-consumer. Or is that what your summary
statement is intended to elicit? (tough to tell, as it could mean either/or is
the better system)

~~~
jacquesm
No, it's anti lawyer. Consumers are doing fine. Consumer watchdogs have actual
teeth and when companies are found to have misbehaved the penalties can be
quite severe.

The difference is that consumers don't usually get rich from suing companies,
we don't have a 'legal lottery' for every little thing that spoils your day
and that you feel grieved about. That higher barrier keeps the courts free for
stuff that is important and at the same time makes sure that we don't end up
with a climate where everybody is suing everybody else all the time.

~~~
forapurpose
> Consumers are doing fine.

By what measure?

~~~
jacquesm
Consumer satisfaction indices are published with some regularity, the United
States is usually somewhere between the 20th and the 30th position of such
rankings.

Now obviously the United States is huge and there is huge diversity between
the various demographics and localities but it is beyond dispute that
consumers in Europe are doing fine (and that consumers in the United States
are not doing much worse on average).

It would be strange to find anything different, taking into account that we're
talking about the wealthiest segment of the world.

~~~
virmundi
Does anyone know of a resource that aggregates the EU stats to compare US be
the EU?

~~~
nolok
Eurostat ? ("Eurostat is the statistical office of the European Union situated
in Luxembourg. Its mission is to provide high quality statistics for Europe").

They have stats for anything and everything, most renewed annually, in all 3
working language, in complete free access, and provide aggregate for EU17 and
EU28.

Here is a link to their "browse stats by theme" page:
[http://ec.europa.eu/eurostat/data/browse-statistics-by-
theme](http://ec.europa.eu/eurostat/data/browse-statistics-by-theme)

------
rayiner
Class actions can be effective where the class members are relatively large,
sophisticated entities. _E.g._ the data-breach class action brought by banks
that is mentioned in the article. But in the consumer-protection space, we
should consider alternatives. Where the class members are individual
consumers, litigation ends up being lawyer-driven. Cases settle for pennies on
the dollar of potential damages, and end up serving neither to compensate
consumers nor really to deter illegal conduct.

Notably, in the EU, the tendency is to have more "ask for permission before
doing something" regulation, and less "ask for forgiveness after doing
something wrong" litigation. _E.g._ unlike in the U.S., there are laws setting
forth detailed safety requirements for consumer products, and agencies
responsible for enforcing those requirements. I suspect that approach yields
the desired level of product safety at lower cost than the American approach.
Similar approaches could, of course, be applied to consumer financial
products.

~~~
Sangermaine
>Where the class members are individual consumers, litigation ends up being
lawyer-driven. Cases settle for pennies on the dollar of potential damages,
and end up serving neither to compensate consumers nor really to deter illegal
conduct.

You're completely misunderstanding the purpose of class actions, and are using
an oft-repeated error. The article itself explains the value of class actions.

Class actions are an ideal instrument for redress of harm where the harm to
any individual is small, but the harm is widespread, meaning that a company is
cheating or hurting many people but it's not worth any one individual's effort
or expense to sue them.

This is the source of the fallacy you commit: the idea that this involves
large compensation for consumers. Consumers ARE compensated in class actions,
it's just that their individual harm is small so their individual payout is
small.

So if, say, Comcast has been secretly overcharging customers $10/month, it's
not a big enough problem for any one of them to sue. But as a class of
millions of Comcast consumers, it may be worth it, and can have a real punch
at that level.

This is the other part of your error: of course class actions are "lawyer-
driven" because, again, the harm to any individual is small. It's the lawyers
and firms pursuing the class action that are doing the work and organizing the
action, often on contingency. Related to your first mistake, you and many
others see the lawyers getting a big payment as "stealing" from the class when
they are being compensated for the work they did and winning restitution for
harms that no individual consumer would pursue, and the class members STILL
get fairly compensated for the small harm done to them.

Finally, and perhaps the largest part of your error, this does and, in the US,
is really the only way to, deter illegal conduct because, again, this illegal
conduct is premised on the idea that it's too small for any person to care or
find it worthwhile to fight. By organizing a class action you enable consumers
to hit back and stop this kind of behavior, and put companies on notice that
they can't try these underhanded tactics without risk.

I agree that a regulation model would be preferable to this kind of
litigation, but until we have regulation we must use the litigation tools we
have available.

Be very wary of screeds against class actions, they're almost certainly
corporate propaganda.

~~~
DannyBee
"Class actions are an ideal instrument for redress of harm where the harm to
any individual is small, but the harm is widespread, meaning that a company is
cheating or hurting many people but it's not worth any one individual's effort
or expense to sue them."

Actually, you are misunderstanding the purpose of class actions. You may see
it as s some ideal, but it's not why they were created. They were created to
simplify similar cases into one case for the purpose of not having two trials
when you could have one.. That's it. It was literally for the efficient
administration of justice. Not to do what you suggest the purpose is. Take a
gander at the history of the federal rules of civil procedure, this is very
widely documented and known.

This is one reason the supreme court was able to say "no more". They are just
a collection of court rules.

I'd also argue they are not the ideal instrument, as they rarely actually
achieve any real gains for the individuals.

~~~
astrocat
>I'd also argue they are not the ideal instrument, as they rarely actually
achieve any real gains for the individuals.

I can't say whether or not the process is ideal, but I can say that the
benefit to individuals is irrelevant. The COLLECTIVE - the whole society -
benefits in a big way when the behavior of a large corporation doing very
small harm to thousands or millions of individuals is punished and deterred.
The bar for success can't always be directed at individuals; there are very
positive societal level benefits that are small to individuals but huge to the
whole ecosystem.

~~~
DannyBee
"but I can say that the benefit to individuals is irrelevant. "

Again, never the original purpose, and while a good goal, class actions are
surely ineffective at this.

" The COLLECTIVE - the whole society - benefits in a big way when the behavior
of a large corporation doing very small harm to thousands or millions of
individuals is punished and deterred."

Also as mentioned, I think this is very true, but class actions have pretty
much not had that effect at all. There are very few areas where class actions
have been effective at accomplishing this.

------
hedora
I never understood why binding arbitration was legal for non-negotiated
contracts.

Also, by reading this you agree all disputes between us will go through an
arbitration firm of my choosing.

~~~
slededit
The courts actually prefer it as a lower cost alternative.

~~~
bradleyjg
It's not up to the courts. Congress passed a law, the Federal Arbitration Act,
which explicitly instructs the courts to treat arbitration provisions at least
as favorably as any other contract provision. In the absence of a conflicting
Constitutional provision, the courts have no choice but to enforce the statute
Congress passed.

~~~
otterley
Correction: American Arbitration Act (aka AAA).

~~~
isolli
Wikipedia disagrees:
[https://en.wikipedia.org/wiki/Federal_Arbitration_Act](https://en.wikipedia.org/wiki/Federal_Arbitration_Act)

~~~
otterley
Yikes! I stand corrected. Thank you. I was confusing it with the American
Arbitration Association.

------
mxfh
Just look at how the EU consumer protection directives are working over here.
You're simply not allowed to waive your guaranteed rights as a customer in
some sort of EULA or TOS. And if you are forced to, the whole contract is void
in it's entirety and you're free to walk away from it.

~~~
waqf
Although bear in mind that class-action law suits, which are the focus of this
article, are typically not a right you have in the EU in the first place
([https://en.wikipedia.org/wiki/Class_action#Class_actions_out...](https://en.wikipedia.org/wiki/Class_action#Class_actions_outside_the_United_States)).

~~~
mxfh
One caveat you typically have with them, is that you forfeit your right to
file a lawsuit for individual damages.

So I see hardly any advantage for the individual customer who got some
individual issue of magnitude and is forced to choose between this or
arbitration outside of the juidical system.

~~~
neoeldex
IANAL, but I don't think it's possible to forfeit your right to sue. Maybe
under some conditions, but never in the generic way.

------
wimgz
“only a lunatic or a fanatic sues for $30.”

A bit off topic here but this is IMHO a great challenge for AI: making a
lawyer affordable for the masses when they are bullied by banks, airlines,
etc.

If it costs you $5 , why not sue for $30 ?

~~~
throwaway76543
Because the risk of paying litigation expense is in the four, five or six
figures.

Chasing a return with a potential risk of loss several orders of magnitude
higher is insane.

~~~
clavalle
I think the point is that the potential risk starting so high is keeping
people from seeking proper justice.

~~~
throwaway76543
Yes, that is my point

------
leoharsha2
I sued a company where I worked. They were not paying my final dues after I
left the company. It took me 1 year and lots of visits to court just to get my
final dues. Finally after a year of all such waste of time, they came to me
and asked for a settlement to which I agree and I got part of my money.

In India, even if you know you will win the case, it is not worth it. It will
take your mental peace. Although I highly recommend to sue companies in other
countries, In India we should think twice before suing anyone.

~~~
damnfine
If they also had to hire consuel and appear in court, the burden was equally
large on them. If everyone sued, the burden would cause change. Acceping
things as they are is how you keep things bad.

~~~
ryanbrunner
Except that in the plaintiff's case, he is devoting 100% of his time while
court is in session, while the company is devoting a fraction of their
resources.

------
s73ver_
There is no valid reason why a company should require someone to sign away
their rights, and it absolutely should not be allowed. Otherwise individuals
might as well not have those rights at all.

------
clavalle
Capture of the machine of the justice system by the wealthy is one of the most
impactful and persistent market distortions in human history.

If people cannot bring the power of government to enforce appropriate costs
against players with more market power government of the People, by the
People, and for the People has failed.

~~~
innocentoldguy
It isn't just a capture of the justice machine by the wealthy, though I agree
this is the case too. It is also an issue with the government, courts, and the
laws themselves. How is a citizen supposed to petition the government over
injustices and grievances, and be dealt with fairly according to the law, when
the government itself sets the financial barriers to entry so high? How can a
poor person get justice when the courts are set up to favor lawyers over
citizens? You can represent yourself in court, of course, but any mistakes you
make in not filing the right form here or declaring the right motion there
will most likely result in a huge injustice being done by the courts, simply
because you, as an average citizen, don't know how to navigate all the legal
minutia.

Have the wealthy really captured the courts, or have the government, judges,
and lawyers set up a situation in which only the rich get justice?

------
coolaliasbro
"First, opponents claim that plaintiffs are better served by acting
individually than by joining a group lawsuit."

Then why should it matter if plaintiffs want to act collectively (ie, put
themselves at a disadvantage according to the quote above)--wouldn't that
benefit the opponents?

------
rrggrr
FACT: products liability law reduced accidental deaths in the workplace.
(source:
[https://www.cdc.gov/mmwr/preview/mmwrhtml/mm4822a1.htm](https://www.cdc.gov/mmwr/preview/mmwrhtml/mm4822a1.htm))

There is no reason similar laws wouldn't work for consumers privacy. Tort law
needs to be applied aggressively to data privacy.

~~~
6502nerdface
> FACT: products liability law reduced accidental deaths in the workplace.
> (source:
> [https://www.cdc.gov/mmwr/preview/mmwrhtml/mm4822a1.htm](https://www.cdc.gov/mmwr/preview/mmwrhtml/mm4822a1.htm))
> There is no reason similar laws wouldn't work for consumers privacy. Tort
> law needs to be applied aggressively to data privacy.

How exactly does that source support the FACT? The words "liable" and
"liability" appear nowhere in it. They credit the reduction in workplace
fatalities to a number of factors, including technology, expanded enforcement
powers of federal inspectors, mandatory standards, and the creation of OSHA
and NIOSH. They make no mention of product liability or tort laws.

~~~
rrggrr
Relax sparky. The chart demonstrates the decline only. Don't go looking to
government to praise the private sector or free market solutions when their
budget depends entirely on the opposite being true.

At 40,000 inspections/yr it wasn't much OSHA with their tiny, often negotiated
fines that caused the decline. ANSI is pretty much the gold standard for
safety, not OSHA regs, so their non-mandatory standards don't get a lot of
credit. It wasn't a magical fairy tapping a gossamer wand atop a dangerous
machine.

It was thousands of plaintiffs attorneys suing the shit out of manufacturers
who designed and sold products that could be made more safely. It was the tort
laws that let them to sue. It was the insurance companies who extracted hefty
sums to write products liability policies on manufactured machinery. And it
was the innovators who used sensors, locking mechanisms, new training methods
and private inspection procedures that have made the US a workplace safety
leader.

The government legislated accountability. The free market made it happen. It
can be the same with data privacy.

------
jseliger
This is a great idea. Contracts of adhesion that dominate our lives should not
automatically and totally be stacked in favor of companies.

------
redm
I don't disagree with the sentiment of the article given the examples
provided, i.e. Wells Fargo. That said, given the climate for frivolous
lawsuits brought by "shakedown" attorneys, it opens the flood gates for
something far worse.

Maybe a better compromise is to allow for binding arbitration UNLESS the
company is found guilty of fraud or other illegal activity, such as Wells
Fargo.

Alternatively, perhaps tort reform to prevent frivolous lawsuits would remove
the need for arbitration.

~~~
preinheimer
I found this Adam Ruins Everything episode on the McDonald's Coffee Lawsuit &
Tort reform really interesting:
[https://www.youtube.com/watch?v=Q9DXSCpcz9E](https://www.youtube.com/watch?v=Q9DXSCpcz9E)
if you'd like to jump to where they talk about frivolous lawsuits it starts
here
[https://www.youtube.com/watch?v=Q9DXSCpcz9E#t=03m15s](https://www.youtube.com/watch?v=Q9DXSCpcz9E#t=03m15s)

Some notes:

\- Tort reform is largely a concept pushed by big business trying to avoid
getting sued when they do wrong.

\- The number of frivolous lawsuits in the US is actually pretty low.

\- The lady burned by the McDonalds coffee was really hurt, and was only one
of many many people burned by McDonalds coffee, who refused to serve it less
hot.

~~~
steveeq1
> The lady burned by the McDonalds coffee was really hurt, and was only one of
> many many people burned by McDonalds coffee, who refused to serve it less
> hot.

What the documentary left out, was that it happened over a 10 year period
where 700 out of 171 BILLION customers got burned from mcdonald's coffee. This
is statistically nothing.

> Tort reform is largely a concept pushed by big business trying to avoid
> getting sued when they do wrong.

While I do not know who created the youtube video you posted, the "Hot Coffee"
documentary that is frequently mentioned about the liebeck case is actually
created by a special interest group, "Association of Trial Lawyers of
America". If you think this movie doesn't have an agenda as well, I have a
bridge to sell you. A video that does a better job of clearing up the
misconceptions of the case is here:
[http://www.hotcoffeetruth.com/](http://www.hotcoffeetruth.com/) .

> The number of frivolous lawsuits in the US is actually pretty low.

I have a hard time believing this. Frivilous lawsuits are easy to do in
america and my friends (annoyingly) do them all the time. In fact, they brag
about the ease of doing it. My personal estimate is around 70% of "I was
injured" lawsuits from my friends were just made up to cash out.

Finally, "hot coffee" lawsuits happen all the time in america at temperatues
as hot or hotter than what was given in liebeck case. And the cases almost
always get thrown out by judges and juries because they are regarded as
"frivilous". Source:
[https://en.wikipedia.org/wiki/Liebeck_v._McDonald%27s_Restau...](https://en.wikipedia.org/wiki/Liebeck_v._McDonald%27s_Restaurants#Similar_lawsuits)

The liebeck case was the exception, not the rule.

~~~
will_brown
>What the documentary left out, was that it happened over a 10 year period
where 700 out of 171 BILLION customers got burned from mcdonald's coffee. This
is statistically nothing.

That is the problematic thinking right there. You are sacrificing 700 people
to be burned so badly by coffee they require skin grafting based on it being
_statistically insignificant_.

While no doubt many cases settled, many didn't and in those cases McDonalds
was ordered to turn the temp down so spilled coffee would at least not result
in scalding that require skin grafting. It is not small thing or statistically
insignificant that McDonalds ignored many court orders, but why did they
ignore the court order? Because the same cost benefit analysis you presented,
they'd happily continue their practicies of selling 171B coffees and paying
out 700 claims, than change the coffee temp and _potentially_ lose any coffee
market share.

As I mention above this well known case is unique because it awarded punitive
damages, equaling 1 day of coffee sales, solely because the company repeatedly
ignored court orders (i.e. Told the court to go fuck itself), further what is
never mentioned consistent with the anti-litigation PR is that the judgement
was appealed and ultimately lowered.

------
Pica_soO
I wish there was a way to preemptive lawsuit a industry, before it even
undertakes a operation. Basically, a group of people bets with lawsuits on the
damages done to society by a industrial operation, forcing anyone to endeavor
such operations to build a huge deposit of settlement and legalfees to cover
the threat - on for example cutting down "rainforrest". As state actors have
proven lousy wardens on these goods of society, maybe the interest of private
stakeholders might put such a bounty on the head of damaging activity's, that
these cease or be replaced with less "dangerous" replacement endeavors,
previously not viable in a market economy that rewards distributed short term
damages to everyone.

~~~
nmca
That is an interesting idea.

------
ct520
There's this one cool site to query outcomes of arbitration. No bueno.

[http://levelplayingfield.io/](http://levelplayingfield.io/)

------
DannyBee
I'd love to understand what the end hope is. Very few class action lawsuits
have resulted in any sort of permanent change. Also note the whole reason for
class action lawsuits was efficient justice, and class action lawsuits are a
fairly recent creation, so that's not entirely surprising. However the
lawsuits that tend to change things tend to be "government vs".

Maybe it gives consumers a good feeling to be able to sue everyone, but is it
actually helping anything?

Even in the past, people were not able to sue the telecoms or banks into
having good customer service, or into not doing illegal things. Rarely, if
ever, have they recouped the profits these companies made doing whatever.
Instead, all the companies just treat it as "cost of business". I'm not sure
it's really been a vehicle for effective change anymore.

Certainly arbitration won't be either, but maybe groups of super annoyed
people may have better luck forcing the government into action than people
placated by class actions where the government can wash its hands say "well,
they already took care of it!"

~~~
frgtpsswrdlame
Perhaps this is a situation where we shouldn't let the perfect get in the way
of the good. Class actions return money to wronged parties. That's good so we
should remove the arbitration cruft that is preventing that.

~~~
DannyBee
I guess i don't think the situation was good!

They didn't return anywhere near a good amount of money to wronged parties.
Lawsuits were being settled for not even pennies on the dollar. (arbitration
also isn't cruft, but it's definitely getting an undeserved bad rap)

Actually, the situation i long for is before the creation of the LLC, where
shareholders were responsible for paying for the corporations lawsuits. LLCs
are fairly recent invention, and also one that hurt consumers a lot.

IMHO, No better way to get wells fargo to stop doing illegal things than have
the people who own X% be forced to pay for it. That'll change a board right
quick.

~~~
matt4077
Who do you think ends up paying, if not the owners of the company? As long as
the company isn't bankrupt, incorporation doesn't change anything.

Full liability of owners isn't feasible in the current system, because it
would expose every single investor to unlimited liability.

~~~
DannyBee
"Who do you think ends up paying, if not the owners of the company?"

Errr, the company is liable as a separate entity from the owners. That's the
whole point. Ignoring insurance, etc, the owners/shareholders will not be
liable. The entity will be, completely and legally separate from the people
you are talking about.

If I own a company, and my bank account has a billion dollars in it, and the
company has 1 million, and they end up fined for 2 million, even as the owner,
i don't pay.

"As long as the company isn't bankrupt, incorporation doesn't change
anything."

Of course it does. Your argument is a very indirect one, since the
owners/shareholders quite literally don't pay. Thus, any payment by
shareholders comes in lost money in the market or something, which is both a
very indirect thing, and rarely matches the actual cost.

"Full liability of owners isn't feasible in the current system, because it
would expose every single investor to unlimited liability."

The first part seems very disconnected from the second. The fact that every
investor has unlimited liability does not make it infeasible. Maybe unwanted
by the investor, but not infeasible. Right now, the risk of them going
bankrupt/etc has been foisted on everyone else who they may injure. I get why
the investors don't want that risk. That's their problem.

I'd be fine with "LLC up to some amount of revenue/profit, you must convert to
liable corp afterwards".

------
samstave
Probably not the perfect topic for the following question, but close enough
for me to ask;

What is the deal with class action lawsuits WRT the monies lawyers get vs the
plaintiffs.

I was a victim of fraudulent banking practices in 2008/2009 which resulted in
the illegal foreclosure of my home in San Jose. I "won" my class action
lawsuit and was "awarded"$1,100 for my victory on having a $489,000 house
stolen from me by the bank. (Never missed a payment, never late, had credit
score of 780 - this experience ruined me)

So I "won" that legal battle - but was unable to have my credit score fixed
through the win...

So the question is: class-action lawsuit victories look to me to be a complete
sham, so why would we value them as anything other than a "fuck you for not
having enough money" enterprise - and where do the lawyers get off on their
"right" to profit off such actions at the expense of others?

------
socrates1998
I agree, these arbitration clauses are just another way corporations get away
with screwing over consumers.

------
richardknop
This isn't already possible? That's not right that companies can hack the law
like this. Consumers should be able to sue.

~~~
kazagistar
Citizens United was the end of democracy in Americal, and this is yet another
piece of the fallout.

~~~
rayiner
The Federal Arbitration Act, codifying Congressional preference for
arbitration instead of court proceedings, was enacted in 1925.

------
Khol
The oddest takeaway from this for me is that these arbitration clauses are
banned for contracts for members of the military.

------
wbracken
Alternative viewpoint:

[https://www.consumerfinancemonitor.com/2017/08/22/director-c...](https://www.consumerfinancemonitor.com/2017/08/22/director-
cordrays-op-ed-disregards-many-inconvenient-facts/)

------
Animats
_In 2010, the Consumer Financial Protection Bureau, which I direct, was
authorized to study mandatory arbitration and write rules consistent with the
study. After five years of work..._

Talk about a schedule overrun. That project should have been finished in 2011.

~~~
iamatworknow
I work in an industry tied closely to the actions of the CFPB, and they've had
a lot on their plate ever since they were founded. They continuously get
attacked by industry groups (formally through lawsuits and informally through
what is more or less industry propaganda). I wouldn't be shocked if they spent
the majority of their time and resources just defending their right to exist.

------
exabrial
Call me cynical, but it seems most class action lawsuits end up paying $100m
to a lawyer group and $5 to each individual :/

------
amelius
I was under the impression that class-action lawsuits were already a
possibility for consumers.

~~~
ascagnel_
Contracts in the US are allowed to include clauses forbidding class-action
suits and mandating binding arbitration in their place.

------
tareqak
A slightly related issue that I find somewhat unsettling is how easily big
companies that are being sued by state or federal governments are able to
settle in out of court proceedings.

From my understanding, the argument for allowing settlements is to help one or
both parties somehow save face, time, or money. However, what everyone
(including people who are not affiliated with either party) loses out on is
the possibility to establish a precedent. Some of the cases that come to mind
are the HSBC case where some people who were following the court proceedings
started to sense and publicly state the real possibility of actual criminal
wrongdoing ([https://www.wsj.com/articles/hsbc-agrees-470m-settlement-
ove...](https://www.wsj.com/articles/hsbc-agrees-470m-settlement-over-alleged-
u-s-mortgage-abuses-1454689803)). Compare that to a guilty plea by BNP Paribas
here ([https://www.theguardian.com/business/2014/jun/30/bnp-
paribas...](https://www.theguardian.com/business/2014/jun/30/bnp-paribas-
pleads-guilty-criminal-charges-sanctions) and
[https://www.justice.gov/opa/pr/bnp-paribas-sentenced-
conspir...](https://www.justice.gov/opa/pr/bnp-paribas-sentenced-conspiring-
violate-international-emergency-economic-powers-act-and)).

In comparison, see what happens to an individual
([https://www.cnbc.com/2014/03/19/soc-gen-rogue-trader-
kerviel...](https://www.cnbc.com/2014/03/19/soc-gen-rogue-trader-kerviel-
heading-for-jail.html)), and how people try to avoid it
([https://www.bloomberg.com/news/articles/2017-06-09/ex-
socgen...](https://www.bloomberg.com/news/articles/2017-06-09/ex-socgen-
banker-charged-in-insider-case-tied-to-airgas-takeover)).

TL;DR: Big companies get to settle all to easily in cases brought forward by
government attorneys without admitting guilt or wrongdoing, which is in
contrast individuals (even wealthy ones) who often basically become the
targets of what effectively becomes (sometimes faux) moral crusade. Companies
end up:

1\. Doing something that breaks the law, but in a sufficiently obfuscated
manner. 2\. Getting caught by government usually via the observation and study
by keen citizens and/or outright whistleblowers. 3\. Involving their legal
team to both prepare for fighting the case, and to give PR guidance and
statements. Marketing and salespeople downplay the concerns from both
consumers and customers. 4\. When the case becomes sufficiently uncomfortable,
settle it with government for some fraction of the total estimated damages and
not admit to wrongdoing. 5\. Write off the settlement amount in the most tax-
friendly manner possible via in-house or third-party accountants. 6\. Get
praise internally and externally for being _scrappy_ and _disrupting_ the
_establishment /government/noun-used-as-a-pejorative_ (yes, you too dear HN
contributor/lurker). 7\. Rinse and repeat 1-6.

I think a few of the things that Uber and AirBnB have had to settle
essentially map to the steps I outlined above.

Note: a. The sources above that I cite might not be the best ones to support
my claim, but the general issue and the unwillingness to resolve it properly
remain. b. I realize that step 6 is mean/snarky/typecasting. My aim was to
remind the reader that audible/silent praise/rebuke do have power, and that
_doing nothing does register as a signal in some situations_.

------
necessity
Don't do business with companies that have such contracts? If there is no
choice in a given sector then the issue is a monopoly not the contracts.

~~~
s73ver_
That's not usually a choice, and it's not due to monopoly. Just about every
company out there is adding these clauses to their contracts. And consumers
have no power to combat them.

~~~
thejerz
You have the power not to enter into the agreement. No one is forcing you to
download a song from iTunes or open an account at Wells Fargo. If you don't
like the terms, don't enter into the agreement.

~~~
david-cako
Your suggestion is effectively a suggestion that anyone who wants to not
implicitly agree to such terms simply doesn't participate in the developed
world.

This makes zero sense. It's on par with saying "dude just turn off
javascript".

Is the answer to political corruption buying a boat and taking refuge in the
pacific ocean, or is actually correcting the problem?

~~~
necessity
>This makes zero sense. It's on par with saying "dude just turn off
javascript".

That's what you actually should do, I use NoScript and it's perfectly fine.
Stop bitching and demanding people force others into the things YOU want.

~~~
david-cako
What things do you think I want? Do you think I roll out of bed looking
forward to using obfuscated javascript on every site I visit?

at least 5-10% of websites shit the bed on me with uBlock turned on. can't
imagine what noscript is like.

------
pfarnsworth
Letting consumers continue to sue is not the answer. It only incentivizes more
litigiousness, which is part of the things that are ruining American society.

What we need instead is for the government to pursue these crimes on our
behalf. The fines should be draconian with no options for them to dilute it
the way the SEC does. And the fines should go towards some fund that
specializes in charities instead of going to government coffers so that we
don't incentive behavior like civil forfeiture.

~~~
vivekd
So letting people who were legitimately wronged receive justice and fair
compensation in court for that wrong is "litigiousness" and therefore bad?

First, I think you misunderstood what litigiousness means.

Second, merely labeling something as litigious doesn't make it a bad thing.

Litigiousness refers to frivolous lawsuits not legitimate ones. However large
corporations have done a campaign of trying to label everything litigious to
try and save money.

Personally, I like the fact that courts exist to let people redress wrongs. If
regulation was so effective at stopping bad behavior, how did banks, one of
the most regulated industries in the world, manage to open up phony bank
accounts for customers with no regulatory involvement? In fact how did they
cause the financial crash with no regulatory intervention?

Regulation is a bad joke and I'm convinced it's just a PR stunt by the
government to make it look like it's doing something.

