By Monica Goyal

 

Two startups recently came to my attention that offers creative solutions to help people resolve legal disputes.

 

Their methods include online reputation shaming, game theory tactics, and settlement negotiation, all in the hope of achieving better, faster settlements for far less expense than more traditional ‘in-person’ methods. The two online dispute resolution services I’m referring to are PeopleClaim and Fair Outcomes.

Monica Goyal

 

Shame on You

 

PeopleClaim’s service speeds resolutions along by putting the reputations of complaint targets on the line. For a small fee of $7.96, PeopleClaim will send a complainant’s (sender) complaint to its target (receiver), allowing the receiver an opportunity to negotiate a settlement directly with the sender or to send PeopleClaim a rebuttal.

 

 If neither party registers a settlement with PeopleClaim within two to four weeks of the original complaint being sent (depending on the claim), PeopleClaim will post both the complaint and the rebuttal, if submitted, on its site for anyone to see. If no settlement is registered within 90 days of the original complaint, PeopleClaim will refund the sender his/her money.

 

Receivers have an incentive to engage the sender and resolve the dispute before the deadline so that the complaint does not get published on PeopleClaim’s home page. One worrying feature of the site is that it doesn’t post the identities, pseudonyms or real, of the complainants. Receivers of complaints suffer the risk of reputational damage, but complainants do not, giving them no incentive (except, apparently, for the risk of banishment from PeopleClaim for filing a false claim) to complain in good faith.

 

Fair Game?

 

Fair Outcomes uses game theory and other models of decision-making in their four dispute-resolution services (you can read a good introduction to game theory here). It currently offers four services, which purport to facilitate resolution of disputes in joint ownership, property division and ecommerce, as well as general disputes.

 

Its Fair Buy-Sell system, useful for allotting assets between former joint owners of property, is an automated negotiation system into which both sides negotiate the price of a jointly owned asset or set of assets. The buyer enters the value that he/she would be willing to pay, and the seller enters the value for which he/she is willing to sell the asset. If the two values are within a certain range of each other then the system sets the midpoint of the two submissions, or some other value agreed-upon by both sides, as the price of the asset. This system encourages both sides to negotiate in good faith because proximity of the two values leads to a faster settlement.

 

Disputes in Fair Outcomes are kept private (i.e. cannot be found on search engines). If a party wants to complain publicly about another after using Fair Outcomes, there are many other avenues for doing so.

 

Conclusion

 

These two sites facilitate settlement in different ways: PeopleClaim by introducing risk to reputation, and Fair Outcomes by incentives to negotiate in good faith. Fair Outcomes is likely to be more effective in disputes over property, in which both parties’ stakes in their online reputations is relatively low. Neither service is likely to help you in the case where the other party does not want to pay, because the reality is they do not have the teeth of the law, or the ability to call out the sheriff on you.  But at the price point they offer their services, it may be an avenue to explore before going to the lawyer.

 

What both of these sites offer is a sneak-peak into the incredible changes that are occurring in the legal profession. Undertaking settlement negotiations using traditional lawyers are not only expensive, but the process is often lengthy and exhausting for both parties, regardless the outcome. By simplifying the settlement process, web-based legal services like PeopleClaim and Fair Outcomes are changing the landscape for (in my opinion) the better.

Monica Goyal is a Toronto-based lawyer and a technology entrepreneur who founded My Legal Briefcase 

Written with Josh Patlik, a Social Media Intern with My Legal Briefcase and a student in the University of Toronto’s International Development Studies

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