Paying a bill on Cornell’s CASHNet is clunky. The first payment page has no record of your outstanding balance, so you must memorize the amount before submitting. The only accepted form of payment is by bank transfer – a silly way to pay a $40 student activity fee. The form for entering your bank information does not allow you to paste your account or routing numbers, inviting mistakes.
After that slog, you might be forgiven for not reading the fine print. When you click through you agree “to arbitrate all disputes and claims between you and Higher One, Inc. before the American Arbitration Association under the Federal Arbitration Act, and not to sue in court in front of a judge or jury. You further agree that you may only be able to bring a claim against [Higher One, Inc.] in your individual capacity and not as a plaintiff or class member in any purported class or representative proceeding.”
By agreeing to arbitrate all disputes “in your individual capacity,” you sign away your right to justice via the public legal system. Instead, any crime committed against you by the bursar’s contractor Higher One Inc. must be settled by a private legal system well-insulated from ordinary consumer protections. You are more likely to lose your case, and you cannot pool resources with—or even benefit from the precedent of—other victims.
CASHNet and Higher One, Inc. hold a great deal of your sensitive financial information. Say, due to criminal negligence, they leaked information in a Cornell-wide breach akin to the breach of credit information leaked by Equifax in 2017. Under the ordinary legal system, a group of victims can band together to hire legal representation and sue in a class action. Class actions adjudicate cases that affect many people by letting a group of representatives of the class organize legal representation in a case whose result applies to everyone in the class. If those representatives win by proving they were harmed, the ruling applies to every member of the class, and everyone at Cornell would get recompense.
This is what happened after the Equifax breach: If you’re one of the 147 million adults whose credit profiles were illegally leaked, you are entitled to $125 for the illegal disclosure of your financial information and you don’t have to hire your own lawyer to claim it. Binding individual arbitration upends this. Arbitration has worse outcomes for victims, period. Worse yet, under individual arbitration you cannot pool resources to share legal representation with other victims. Each and every Cornellian in pursuit of justice would need to acquire their own independent representation, which has also been shown to produce worse outcomes. Each case is then litigated in isolation from every other: All evidence your peers submit you must independently come by, the results of each case leave no precedent for any other and those results are secret.
This is absurd. If you belong to a class of people all wronged in the same way by the same entity, it only takes one person proving they were harmed to prove that all were harmed. By dodging the public justice system, arbitration allows corporations to get away with more wrongdoing. By preventing class action, individual arbitration allows corporations to get off nearly scot-free for profitable wrongdoing to many people. After all, only a small fraction of Cornellians would have the time and money to acquire legal representation and prosecute a case, and yet a smaller fraction would win their cases. No precedent means no justice for anyone who can’t afford a lawyer.
This is a strong motivation for a company like Higher One, Inc. to cut costs by acting recklessly. With individual arbitration agreements, they won’t have to address most of those harmed. Equifax realized this after discovering their own criminal negligence. As news of their breach broke and panicking people scrambled to determine whether they were affected, Equifax set up a fake information portal attempting to trick users into signing away their rights to class action. This is the legal strategy of the sleazy.
I’m not the only one who thinks this. Cornell’s own ILR faculty write that arbitration agreements in general and individual arbitration in particular have been a disaster for consumer rights.
“By delegating dispute resolution to arbitration, the Court now permits corporations to write the rules that will govern their relationships with their workers and customers and design the procedures used to interpret and apply those rules when disputes arise,” they argue. “These trends are undermining decades of progress in consumer and labor rights.”
Before I paid my last bursar bill, I sent firstname.lastname@example.org an email about my concern with agreeing to individual arbitration when paying with CASHNet. “[If] I am harmed by their actions or access to my banking information, this agreement strips me of recourse under the legal system. […] Do you think this is right?” I received a response from a bursar administrator directing me to pay in person with cash, check or money order.
Forcing people who don’t want to sign their legal rights away to pay with cash, check or money order is moronic. But for now, that’s how I’ll be paying.
This post originally appeared in the Cornell Daily Sun.