- The First Hurdle: Identifying the Mandatory Arbitration Clause
- Proof of Use: Establishing Your “Consumer Status”
- The Similarity Factor: Does Your Issue Match the Group?
- Navigating “Conditions Precedent” and Informal Resolution
- Mass Arbitration vs. Class Action
- Checklist: Five Steps To See if You Qualify Today
- Don’t Let the Fine Print Stop You
Mass arbitration works differently from a class action lawsuit. Instead of a single claim automatically representing all affected people, each person actively opts in to file an individual claim that becomes part of a coordinated effort. At Class Action U, we help consumers use mass arbitration to challenge companies that try to shield themselves from lawsuits through their fine print.
The First Hurdle: Identifying the Mandatory Arbitration Clause
The first step in determining your mass arbitration eligibility is finding the mandatory arbitration clause in the company’s terms of service. Most apps, credit cards, and subscription services include a dispute resolution section requiring customers to resolve disputes through arbitration rather than a lawsuit.
You can usually find these terms by scrolling to the footer of a company’s website and clicking a link labeled “Legal” or “Terms and Conditions.” In mobile apps, the same information may appear in the settings menu.
Arbitration is a legally binding process in which an independent decision-maker, called an arbitrator, reviews the case and decides how to resolve the dispute. While companies often include arbitration clauses to limit legal action against them, those same clauses can also create opportunities for consumers.
If many people agreed to the same arbitration terms and experienced a similar issue with the company’s product or service, attorneys may coordinate together each person’s individual arbitration claim as a mass arbitration. This allows consumers to hold the company accountable on a much larger scale.
Proof of Use: Establishing Your "Consumer Status"
To qualify for mass arbitration, you must have used the company’s product or service and been subject to its terms of service. You may have agreed to these terms when you created an account, downloaded the app, signed up for a subscription, or activated a credit card.
Generally, you will need evidence showing that you used the service during the time the issue affected consumers. If you suspect you’re eligible for mass arbitration, be sure to keep copies of any digital records related to your use of the product or service. This evidence may include receipts, account statements, or confirmation emails.
The Similarity Factor: Does Your Issue Match the Group?
Mass arbitration is designed for situations in which many consumers have experienced a substantially similar issue with the same company. This could involve the same data breach, the same hidden fee, or the same defective product feature.
Law firms typically organize these cases by grouping together many individual arbitration claims. In many situations, attorneys will wait to file the claims together as a mass arbitration until a certain number of eligible consumers have come forward. This number varies but is often between 25 and 100.
If your situation is different from the issue affecting the larger group of consumers, it may not qualify for mass arbitration. In that case, you may still have legal options. However, the claim would likely need to proceed on an individual basis rather than as part of a coordinated group filing.
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Navigating "Conditions Precedent" and Informal Resolution
Many terms of service require consumers to take certain steps before filing an arbitration claim. One common example is a requirement to send the company a written Notice of Dispute describing the issue and the desired resolution. This gives the company an opportunity to resolve the matter informally through negotiation before arbitration begins.
Missing these types of procedural requirements is a top reason consumers are disqualified from proceeding with legitimate claims. You may lose your eligibility for mass arbitration if you skip any steps outlined in the company’s terms, so it pays to be informed.
Mass Arbitration vs. Class Action
In a class action lawsuit, one or more consumers file a claim on behalf of a larger group of people affected by the same issue. Most class actions follow an opt-out model, meaning affected consumers are automatically included unless they choose to remove themselves from the case. Generally, all they have to do to receive compensation is submit a claim form after the lawsuit reaches a settlement or verdict.
Mass arbitration works the opposite way. It typically involves an opt-in model, which means each person must actively sign up and file their own arbitration claim. If you don’t take the initiative to file a claim, you will not be eligible for compensation.
Whereas the court resolves a class action lawsuit for the entire group at once, a mass arbitration involves separate claims with individual resolutions. Because each case stands on its own, payouts in mass arbitration can sometimes be higher than the smaller amounts often distributed across large class action settlements.
Which One Do You Fit?
Mass arbitration and class action lawsuits both allow large numbers of consumers to pursue claims against the same company. However, the way people participate in each process is different.
Which process typically applies depends on the company’s terms of service. If the company requires disputes to go through arbitration, you may need to pursue your claim through mass arbitration rather than a class action lawsuit.
Checklist: Five Steps To See if You Qualify Today
Follow these steps to determine if you qualify for mass arbitration:
- Determine how the issue affected you. This might include unauthorized charges, exposure in a data breach, or problems with a faulty product feature.
- Check for an arbitration clause. Review the company’s terms of service to see whether it requires disputes to be resolved through arbitration instead of a lawsuit.
- Verify when you used the product or service. Confirm that you were a customer during the time period when the problem affecting other consumers occurred.
- Gather proof of your transaction. Collect records showing that you used the product or service during the relevant time period, such as receipts, account statements, or confirmation emails.
- Join a coordinated legal effort. If your situation matches the broader issue affecting other consumers, reach out to the attorneys organizing the mass arbitration and work with them to file your individual claim.
Don't Let the Fine Print Stop You
Many companies include arbitration clauses in their terms of service to discourage consumers from taking legal action. Mass arbitration can turn that strategy against them by allowing many consumers to pursue accountability as a united front.
If you’re interested in potentially joining a mass arbitration, Class Action U is here to help. View our list of current mass arbitrations to see whether you may qualify to participate.
