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Issue:

Miscellaneous

 

Written by:

Francis C

 

Date added:

March 13, 2015

 

Level:

University

 

Grade:

A

 

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16 / 4223

 

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These provisions are included in contracts for cell phones, credit cards, and employment among others. The affects of the bar on class actions in these contracts shield the corporations from liability for damages for small dollar amounts. This shield results from the fact that suits for low damage amounts are individually more expensive to initiate than the plaintiff can potentially recover, particularly in the context of arbitration because arbitration can be very expensive to initiate...
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Almost all jurisdictions require at least an $80-100 filing fee to instigate a law suit and arbitration complaints generally cost several hundred dollars to file in addition to the cost of paying the arbitrator, which can range from $600 to $1,600 a day. Corporations with class action waivers are therefore able to inflict small damages on employees or customers with no legal risk as long as the damages are lower then the cost of arbitration...
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