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Would you trust an online court to arbitrate your trading disputes?

By Dan Wilson November 17, 2014 - 1:28 am

According to a report in the New Scientist, more and more people are turning to online courts to arbitrate in the online disputes that occur from ecommerce.

The main service under the microscope, and there are others, is Swiftcourt based in Sweden. Founded by lawyer Johan Hultgren, he says: “We’re doing more private transactions than we used to do. Since there’s no physical contract, more conflicts will arise and these will be over lower amounts.

Critically, the service permits customers to avoid complex and costly court procedures. But it’s only matched to higher end transactions. Swiftcourt aims to resolve cases with six weeks at a cost of at least 100USD. Perhaps of most importance is the fact that the judgements are then enforceable by debt collection agencies in Sweden.

This could be of benefit to sellers of higher cost items in due course. Imagine a situation where you could refer an eBay case to an independent body in the event of a claim from a buyer. If sellers could trust the arbitrator to actually digest their evidence, it could be a more suitable and successful option in cases of buyer fraud and with dealing with unreasonable buyers.

It seems to me that in the UK right now, such problems that arise can easily fall under both eBay’s own systems and Small Claims. But it could be a new horizon in ecommerce. And if companies did emerge that were reliable, doubtless there could be an opportunity in the UK too. For buyers and sellers.

  • 2 years ago

    Interesting process. Rather long-winded and decision by law students!!!! Not convinced although I accept there should be a system. How much would people be willing to pay for a UK system? A percentage? A fixed fee? Who should decide the outcome….a lawyer….an independent mediator?

  • Adrian,

    Interesting thoughts. The process in itself is of course highly adaptable and flexible to fit specific transaction areas. Although, we do need to ensure the legal process in order to reach the enforceability. In regards to law students, this is as well a flexible choice, where we can adjust the competence needed in relation to the competence asked for. The fee for solving disputes should, in my point of view, be a fixed fee based on the value in question in order to keep it as simple and transparent as possible. Since the process in itself is effective and streamlined, it’s easy to calculate the processing time, i.e. the costs.

    Swiftcourt will soon come to UK and it will be interesting to find out how the buyres and sellers in UK think about Swiftcourt as a tool to do safer transactions.

  • Glenn
    2 years ago

    Couple of years ago I was in dispute with a courier company regarding a lost shipment and it was only after I issued an ultimatum that unless I received full compensation with 24 hours I would commence civil proceeding for recovery and costs.

    I advised that I would be claiming via Money Claim Online (MCOL) which is a HM Courts & Tribunals Service Internet based service for claimants and defendants.

    I knew that I had an extremely strong case and had no concerns about them calling my bluff and would only have threatened civil proceeding if I thought I could win.
    The moment you register a claim there are costs and if you don’t win you could easily find the cost of commencing action being considerably higher than the amount in dispute.

    As it happens the courier company paid up within the hour.

    • Steve
      2 years ago

      Lucky you. Anything that improves the current system in the UK can only be a good thing.

      Earlier this year (via a “Well Known Courier Booking Agent” in the Midlands) City-Link collected from me (value approx. £1,000) and then they promptly “lost” it. Tracking shows little and when asked, CL claimed at the time that the driver was interviewed but now no longer works for them (bit odd as 3 months later that same driver delivered an item to me), and all threats of legal action fell on deaf ears.

      I eventually issued a MCOL to the “Well Known Courier Booking Agent” (who I had paid for the collection) and they played the delay game. Case is now transferred to my local court (200 miles away from Defendents address) and a hearing is booked for the New Year.

      My bet is they won’t turn up. Odd thing is after doing a Companies House search I discovered the Defendent has £3.75m (YES, 3.75 million in CASH) in their bank account.

      Seems amazing that with that amount of cash in their account they would fight a negligence claim for such a small amount, particularly when both them and CL are insured.

      First person to guess who the Defendent is wins a Banana! :)

    • Glenn
      2 years ago

      Steve
      Good luck with your case. Make sure you have an itemised list of every expense incurred in pursuing your claim, including time spent preparing your case and Court attendance. My experience tells me that they will almost certainly look to settle on the day of the Court case. It’s a well established practise to drag things out until the very last minute in the hope that the claimant will give up.

      I made it very clear that I would be charging £25 per hour in case preparation fees and that once I started I was committed to a Court hearing so that I could publish the result. They just love to try and settle with no blame attached, so that they keep on trading with nobody none the wiser.

    • Steve
      2 years ago

      Thanks Glen and point taken, I agree that they may be using delay tactics to drag it out in the hope I give up (absolutely NO chance!). I have added a small amount to cover time I spent on the many letters, telephone calls, claim fees, interest, etc.

      Even if I win the full amount claimed it will never properly compensate me for the time spent but I would still be happy to get paid on the steps of the court and maintain their confidentiality (hence my not mentioning this “Well Known Courier Booking Company” by name) as I am not in the business of making claims and don’t give a toss about letting the world know how negligent they can be. At the end of the day I consider all this a total waste of my time. I simply want to draw a line and move on.

      I have to say that if anyone else is in a similar situation you will need to be commited to the process as they don’t blink when you threaten to start a legal claim. IMO it probably wouldn’t be worth the hassel for a small amount.

  • Andy R
    2 years ago

    Anything would be fairer than Ebay.

    Even though we could prove the item was delivered, they once refunded a buyer who had used the empty box scam.

    Submitting the posting documentation showing the correct weight made no impact.

    So yeh, anything other than Ebay / Paypal, a court hearing in Sweden, kangaroo court in Australia, or a tribal meeting in Swaziland. All would be improvements.

  • 2 years ago

    I would like to mention that we developed a new ODR system in Brazil. You can check it out at http://arbitranet.com.br/.

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