Ira Steinberg, Partner and Co-Chair of the Consumer Claims Defense Group, shared his insights with Polygon regarding Valve's decision to remove its mandatory arbitration clause from its Steam agreements.

Excerpts:

Valve’s decision to remove its arbitration clause is notable because most service agreements include an arbitration clause. (However, Greenberg Glusker’s Litigation Group partner Ira Steinberg, told Polygon that there’s currently a “trend of companies reconsidering arbitration.”)

The idea is that the sheer number of arbitration cases would force Valve to settle with all of them with the same resolution, instead of arbitrating them all individually. Arbitration is usually less expensive than litigation, but on this mass scale, it can easily become overwhelming for the company the disputes are with. “In states like California where businesses must pay most of the arbitration fees in a consumer claim, the business would be required to pay a filing fee for each individual claimant,” Steinberg said. “With fees of approximately $1,500 per claim, a claim with thousands of individuals could cost millions in filing fees.”

Resources

• Polygon