tl;dr
Coinbase's new User Agreement includes provisions for individual arbitration, batch arbitration, and the process for handling disputes. The agreement outlines the creation of batches for similar claims, the management of each batch by a designated arbitrator, and the option for simultaneous handling...
Insights into Coinbase's new User Agreement:
1. Individual Arbitration: This means that most disputes between you and others will be handled by one arbitrator instead of going to court. It's like having a special judge for just your problem.
2. Batch Arbitration: If lots of people (at least 25) have similar problems against many others, and they all use the same lawyer to file their claims, then these cases will be grouped together into "batches." This is like putting multiple homework assignments into one big folder for easier handling.
3. How Batches Are Made: If there are between 25-1999 disputes, they'll be split into 20 equal groups. For 2000 or more disputes, each batch will have 100 cases. This ensures that no single batch has too many cases to manage.
4. Handling Each Batch: Each batch will be looked after by a different arbitrator unless you both agree otherwise. You'll pay one set of fees for organizing and handling the whole batch. The hearing where all the issues are discussed and decided will usually be just one session, which is more efficient than having many separate hearings.
5. Consolidation: Cases that should have been part of this process can't be combined with other similar cases unless the rules specifically allow it.
6. Court or Arbitration: If a small part of these rules (about not using class action lawsuits) doesn't work, only that part can go to court. But most issues must still be handled by arbitration.
7. Cooperation: You promise to help JAMS and each other as much as possible during the process. This means you'll try to make things easier for everyone involved, which saves time and money.
8. Simultaneous Handling: If it's practical, more than one batch can be dealt with at the same time. It’s like doing multiple homework assignments on the same day if your teacher allows it.
9. Separate Awards: Even if you're in the same batch as others, each person will get their own decision from the arbitrator. It’s similar to how each student gets their own grade for a test, even if they were in the same class.
This kind of agreement is commonly used by companies like Coinbase to protect themselves from class action lawsuits. Here’s why:
- Cost and Efficiency: Handling individual disputes through arbitration can be more cost-effective than dealing with a large group of people in court. Arbitration is often faster and less expensive than litigating in court.
- Control Over the Process: Companies can choose the arbitrator and the rules for the arbitration process, which gives them more control over how their disputes are resolved compared to going through the standard legal system.
- Confidentiality: Arbitration proceedings are usually private and confidential, unlike court cases which are public record. This can protect a company's reputation and sensitive information.
- Predictable Outcomes: The rules of arbitration are often more predictable and consistent compared to the varied outcomes that can occur in court. Companies might find this aspect reassuring.
By using these clauses, companies aim to manage disputes more efficiently and effectively while also limiting their exposure to large-scale legal actions like class lawsuits.