I noticed lots of companies try to get you to agree settle out of court, but what benefit it is to consumer and why it is allowed since it seems to favor those with more resources?
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Arbitration is an alternative to court proceedings to resolve a dispute. In court, both sides have lawyers and present cases to a jury that decides the matter. This is expensive, and very public. Arbitration is simpler, both sides present their case to an expert, and the expert decides. While this sounds better and potentially as fair, most arbitration clauses let the company pick the expert, so that’s hardly unbiased.
It prevents harmed parties from leaving of other harmed parties- so aside from preventing class-action suits, it prevents you from learning if a company has a history of litigation for the same issue.
If you don’t want arbitration, assuming the contract is legal, the company can simply refuse you do business with you. Access to the product or service is the benefit to the consumer. It’s allowed because we, generally, do not have a right to access private goods and services. The exceptions being if the discrimination is based on protected classes, of which refusing arbitration is not.
Arbitration resolves disagreements between parties of a contract by having a third party determine who is right. It doesn’t involve courts, so there’s no discovery (sharing important internal documents), no transparency, no rule of law.
It’s almost never beneficial to consumers. Companies try to force it because it is, almost always, extremely beneficial to them and only them.
It’s legal because the Supreme Court says it’s legal, pretty much. It’s allowed, in large part, because the US Congress has done almost nothing to stop it. Thankfully, it *has* recently passed some laws that limit arbitration in the really really awful cases (like sexual harassment/assault), but that still leaves the vast majority of forced arbitration clauses functional.
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