The Memo: Disney World and infinite arbitration

Earlier this year, a guest at a Disney World restaurant suffered a tragic and fatal allergic reaction. Now, Disney is facing a wrongful death lawsuit from the late customer’s husband, who claims that the restaurant workers were fully aware of his wife’s allergies. He is suing both Disney and the owners of the restaurant for more than $50,000 and is also seeking reimbursement for other damages related to suffering, loss of income, and medical and legal costs. 

However, Disney argued that the case should be dismissed and settled out of court. And what led to this bold conclusion? Well, back in 2019, the claimant signed up for a one-month free trial of Disney+ and, in 2023, bought theme park tickets via their Disney account. By making an account, the claimant agreed to Disney’s Terms of Use, which include a clause stating that users agree to settle any disputes with the company out of court, via arbitration. However, following significant public backlash, Disney has agreed to hear the claim out in court: "We believe this situation warrants a sensitive approach to expedite a resolution for the family who have experienced such a painful loss. As such, we've decided to waive our right to arbitration and have the matter proceed in court." 

Companies tend to prefer arbitration as a method of dispute resolution as it’s typically a faster and more private process, as all filings and proceedings must remain confidential. The issue with arbitration for the average individual, however, is that, unlike the court system, parties have to pay arbitrators who typically charge a steep hourly rate... 

But it’s not just Disney; other online retailers, streaming services and gig economy apps have so-called ‘infinite arbitration’ clauses in their fine print. For example, an Uber customer faced a similar issue following a car crash, and was unable to take their case to court as they had unknowingly waived their right to take legal action when previously ordering a pizza from Uber Eats. So, while the result of the dispute is still yet to be seen, this is nonetheless a harsh reminder that T&Cs are often difficult to navigate – let alone negotiate – without legal advice or even a law degree.