A recent article in the (Huntington, WV) Herald-Dispatch illustrates clearly why so many corporations require their customers to give up their right to file a lawsuit, either individually or as part of a class action, if they have a dispute with the corporation, and instead engage in arbitration. Arbitration provisions are now standard—and mostly unavoidable—in cell phone service contracts, rental car agreements, credit card contracts, and many more.
As explained by Pulitzer Prize-winning reporter Eric Eyre, the Supreme Court of Appeals of West Virginia held in 2017 in Citizens Telecoms. Co. v. Sheridan that Frontier Communications customers who had filed a class-action lawsuit alleging that Frontier did not provide the high-speed Internet service it advertised could not pursue their claims in court, but had to arbitrate, based on the arbitration provision contained in Frontier’s service agreement.
Eyre reports that more than 150 customers have claims that will be arbitrated individually. Two claims have been arbitrated so far, with Frontier losing one and winning one. A customer’s recovery in the arbitration process is limited to $10,000, but the customer who prevailed was awarded only $870 in damages, which the arbitrator determined was what the customer paid over a 29-month period during which Frontier provided inadequate service. That is almost certainly far less than what Frontier would have paid in a settlement or what a jury would have awarded as damages, and demonstrates that even a "loss" for Frontier in arbitration is still a win.
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