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Experts Call for 'Online Court' to Handle Low-value Civil Court Cases

Special Reports

Low-value civil court cases in England and Wales could be dealt with by an online disputes system similar to that used by eBay.

The new online dispute resolution (ODR) system could be up and running by 2017 and operate alongside the traditional court system according to a report, by a working group set up by the independent Civil Justice Council (CJC). The resolution would be for low-value civil court cases in England and Wales.

The report sets out examples of similar systems already in operation across the world, including those run by online retailer eBay, and the Financial Ombudsman Service (FOS), which resolves over 500,000 disputes between consumers and UK-based financial services firms each year.

The new system, to be known as HM Online Court (HMOC), would be operated by the existing HM Courts and Tribunals Service (HMCTS) and be made available in non-criminal cases with £25,000 or less in dispute, according to the report. The HMOC aims to extend their scope - beyond dispute resolution to include both dispute containment and dispute avoidance. The aim is that better containment and avoidance of disputes will greatly reduce the number of disputes that need to be resolved by judges. It could also be extended to "suitable family disputes" and "appropriate cases that come before today's tribunals", the working group said. It would also reduce the expenses generated by a court.

Small claims cases worth up to £10,000 account for almost 70% of hearings in civil courts in England and
Wales. However, the number of small claims going to
hearing has fallen over recent years, from 51,046 in
2003 to 29,603 in 2013.

The report is not tinkering with the existing system, but aims to introduce a fundamental change in the way that our court system deals with low value civil claims. Online facilitators would be used to help parties reach an agreement, and if that failed, online judges would rule on cases without the need for courts to be booked or for the parties involved to appear in person to give evidence. There are examples from around the world that clearly demonstrate its current value and future potential, not least to litigants in person."

Three-tier dispute resolution
The report proposes a three-tier dispute resolution system, with greater involvement from non-judicial ‘facilitators’ to encourage resolution at an earlier stage.

A first tier online evaluation’ would help users in dispute to classify their problem, gain greater awareness of their rights and obligations and to understand any potential options and remedies.

Tier two would be ‘dispute containment’, using "online facilitators" to help the parties reach agreement through mediation and negotiation online using telephone conferencing where necessary. This stage could also involve some automated negotiation.

Tier three would be ‘dispute resolution’, employing the use of judges to consider suitable cases online, largely on the basis of papers received electronically,
but with an option of telephone hearings where necessary.

Prof Susskind said the system had the potential to resolve tens of thousands of cases every year and cost less for the parties involved and the taxpayer. He also
expected most disputes to be resolved "at the first two stages without a judge becoming involved".

eBay System
Among the examples highlighted by the report include eBay's ODR system. A remarkable 60 million disagreements amongst traders on eBay are resolved
every year using ODR.

There are two main processes involved. For disputes involving non-payment by buyers or complaints from buyers that items delivered did not match the description, the parties are initially encouraged to resolve the matter themselves by online negotiation. They are assisted by clearly structured, practical
advice how to avoid misunderstandings and reach a resolution.

Guidance is also given on the standards by which eBay assesses the merit of complaints. If the dispute cannot be resolved by negotiation, then eBay offers
a resolution service in which, after the parties enter a discussion area to present their argument, a member of eBay’s staff determines a binding outcome under its Money Back Guarantee. This e-adjudication process is fast with strict time limits. The claim must be escalated to eBay within 30 days from the actual or latest estimated delivery date and, to encourage a full opportunity for self-resolution, no earlier than 8 days since the complaint was first raised with the seller

Principal author Prof Richard Susskind said eBay disputes were "minor", like many civil court cases. Although the eBay resolution system is not without its critics or perceived bias. At present the eBay systems works when a Buyer complains about a seller
or goods. In these cases eBay usually finds in favour
of the buyer (they extensively advertise the service as
‘buyer protection’.) This could also raise the risk of
sham litigation or a Claimant impersonating the
Defendant.

ODR v Small Claims Court
ODR’s aim is to broaden access to justice and resolve disputes more easily, quickly and cheaply, particularly for the growing number of litigants in person   Currently, small claims in the civil court system are designed for less complex cases - those usually up to a value of £10,000, and personal injury and housing
disrepair claims up to a value of £1,000. Small claims cases make up almost 70 per cent of the total number of hearings in the civil courts, even though the
number of small claims going to hearing has decreased over the past 10 years from 51,046 in 2003 to 29,603 in 2013.

Despite the simplified and informal procedures, it can take more than six months for a small claims case to reach a hearing before a judge.

According to the report, the proposed HMOC would provide those bringing these cases with a less daunting, more user-friendly means of resolving disputes, particularly those bringing cases on their own as 'litigants in person'.

Technology
The proposal for the creation of an online court comes five months after a senior judge called for courts to cut down on paper documents and move into the digital age. Over a decade ago Lord Justice Woolf, in his report Access to Justice, identified the importance of better IT to the future of the civil justice system and in 2009 Lord Justice Jackson noted that the courts still did not have an IT system which was adequate for the delivery of civil justice at proportionate cost. While Lady Justice Gloster, who sits in the Court of Appeal, said the amount of files used in trials was similar to when she started her legal career 40 years ago.

Conclusion
What is clear is that the system does need to be streamlined, and while substantial savings can be made, the changes will require judges to be trained and authorised to decide cases online. In addition to funding for the facilitation and evaluation services.

The establishment of HMOC will require (and offer the opportunity for) the creation of a new body of court rules and practices. In tone and content, these
should be consistent with the broader aspiration of a court service that is intelligible, accessible, speedy, and proportionate in cost. This, in turn, calls for rules
that are simple, clear, and compact. There is also scope here for embedding the rules in the ODR system itself, so that, for example, when users complete forms online, the systems will require that this is done in a compliant way and any consultation will proceed only when formalities have been met.

HMOC should have a procedure whereby online judges have the discretion to refer cases to the conventional court system, where, for example, there is
an important issue of legal principle involved or where it is considered that the credibility of witnesses or evidence would be better judged in a physical
courtroom. Decisions made by online judges should be subject to the same rights of appeal as equivalent decisions made in the conventional court system.

The paper recommends that HMCTS should formally pilot ODR as soon as is practicable. With consultation with the legal profession and consumer groups necessary before any final decisions are made.

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