UPDATE - Linden raises possibility of virtual arbitrations in new ToS
By Eric Reuters
(Adds comment from Linden executives)
SECOND LIFE, Sept 18 (Reuters) - Linden Lab changed Second Life’s terms of service on Tuesday, allowing residents to settle minor disputes with the company via binding arbitration by a variety of means, including legal proceedings inside Second Life itself.
In a post on the official Linden Blog, Robin Linden introduced “binding, non-appearance-based arbitration” as a new way for the company’s customers to settle claims totaling less than US$10,000. Under the policy, arbitrators can accept petitions “by telephone, online, or based on written submissions, and the Resident and Linden Lab will not make any in-person appearance at the arbitration hearing.”
Under the previous terms of service, residents were obligated to travel to San Francisco to submit to arbitration.
“Online” submissions raises the possibility of binding legal proceedings inside the virtual world. “We’re extremely excited about arbitration centers coming to Second Life,” said Catherine Smith, a spokeswoman for Linden. “If the arbitrator selected can conduct arbitration in Second Life, we’re very much open to using Second Life to resolve disputes between Residents and Linden Lab.”
“The change is clearly a result of Judge Robreno’s order finding the previous arbitration clause in the terms of service unconscionable,” said Benjamin Duranske, a lawyer who writes about legal issues in virtual worlds at Virtually Blind.
Second Life’s terms had been in legal limbo since a Pennsylvania judge ruled that the terms were not legally binding in May. In motions in the case Bragg v. Linden Research, Judge Eduardo Robreno called Linden’s terms a “contract of adhesion.”
“The previous arbitration clause required participation in a very expensive alternative dispute resolution process that made bringing claims in the 5-10k range essentially valueless,” Duranske said. Bragg had argued the cost of going to arbitration would have exceeded the value of his claim against Linden Lab. “Now, if you have a claim for five thousand dollars, there is a much cheaper way to bring that claim against Linden Lab,” Duranske said.
“Though this will make it easier to bring small claims, it makes it more expensive and burdensome to bring a big one,” Duranske said. Under the new terms, lawsuits must be filed against the company in San Francisco. Residents risk a US$1,000 penalty for bringing suit against Linden Lab outside of its home jurisdiction. “So they get the case a few blocks’ walk for their lawyers, in front of judges who have heard of SL,” Duranske said.
Residents logging into Second Life are presented with the new terms in a pop-up window, with a choice to accept or decline them. “Residents who do not agree should decline the updated TOS and are prohibited from using Second Life,” Robin Linden said.
