Should Lawyers Look to Online Dispute Resolution To Resolve Disputes With Clients?

Online dispute resolution is rapidly gaining traction. Modria, a leading online dispute resolution (ODR) platform, boasts that its service is used to settle more than 60 million cases annually. Yet even though ABA task forces have studied, and appear to endorse ODR, I’ve not found much mention of the potential uses of ODR to resolve disputes between lawyers and clients.

Currently,in most state ethics codes, lawyers may include binding arbitration clauses in representation agreements resolution of legal malpractice disputes. But should lawyers consider including ODR clauses instead – not necessarily as binding requirements but perhaps as prerequisites to litigation. Consumers are already familiar with the ODR process as its used widely in e-commerce, so they would understand the need to adequately documenting their claims. And while granted, the relative ease of ODR could invite groundless fee disputes from clients, that’s probably preferable to posting negative reviews or filing a grievance.

Attorneys could benefit from ODR also, using it to attempt to collect debts owed from clients. I realize that going after fees always raises the prospect of malpractice or a grievance, but because ODR is less intimidating than a court process, perhaps clients would be less likely to retaliate. Or not – this may be purely wishful thinking. And even if attorneys don’t make the option of ODR available through participation in a third party service, bar associations could offer online fee dispute resolution. Many bars offer this service already but ODR would make it faster and more efficient as well. 

Back in the old days, trust account requirements assured clients that their lawyers wouldn’t take advantage of them. After all, if lawyers slacked off on the job, clients could terminate them and demand a refund of unearned payments sitting safely in trust. Today, trust accounts aren’t necessary for trust.  Online businesses like PayPal and ebay have shown, a robust, online dispute resolution mechanism, combined with the “chargeback” features of credit cards, provide consumers with all the assurance they need to engage in transactions online. Soon, many of the non-lawyer matching platforms will likely offer online dispute resolution (if they don’t do so already; I haven’t checked recently) which are more familiar to consumers than the clunky and outdated “trust account” mechanism that lawyers have no choice but to implement.

Have you ever participated in ODR, or used it in your practice? What do you think?


  1. Paul Spitz on September 5, 2014 at 9:53 am

    It’s an interesting idea. I have a multi-national practice (that’s what you get to say when you have one client overseas!), and ODR would be easier when your client base isn’t entirely local. Of course, the best dispute resolution is no disputes at all.

  2. shg on September 5, 2014 at 10:42 am

    I was rather surprised to see your opening sentence that ODR was rapidly gaining traction. It was my understanding that it’s been a massive flop. So I took a look at your link about the 60 million cases per year, and realize now where you went awry.
    That doesn’t refer to Modria, but to the system created by the founder for paypal, which is now owned and used by eBay as well. It refers to their usage of the system, not Modria. And as all paypal and eBay users know, the system is a nightmare, but it’s the only game in town.
    What’s most telling about the failure of ODR is that Colin Rule needs to resort to such trickery to try to promote Modria, as it can’t stand on its own. As much as I agree that ODR would be incredibly useful, it has to work first and no one has figured out a way to overcome systemic problems and create a viable system. And so, they conflate to create the appearance of success instead, as the reality of “gaining traction” just isn’t true.

  3. myshingle on September 5, 2014 at 11:07 am

    You know, I recently heard some very favorable stats about ODR in litigation, and an uptick in use – but when I went to look for a cite for this post, I couldn’t find one quickly so I resorted to the Modria link. Now I guess I know why I couldn’t find anything.

  4. iJustice on September 6, 2014 at 9:01 am

    Here in the UK as we offer online dispute resolution as part of the preparation of the court claim using the court as last resort. If a claim has to be filed the ODR remains open running in parallel to the court process in the hope of settling before a trial.

    Dispute resolution is essentially a complex process of information management, information processing and communication. Therefore, online technology lends itself for this task and is the most proportionate and appropriate solution for the small claimant.

    Our iJustice online platform focuses on supporting ADR for debt disputes allowing all parties to add, view and respond to material.

    The platform offers a progression from the pre-action® ADR® service for disputed claims or following completion of your N1 court claim form for defended claims.

    It contains tools allowing for written communication and discussions including online chat, consisting of users exchanging written text messages, all in the same space of time, i.e. the parties immediately respond to each other’s messages (synchronous discussion). It also offers private, threaded discussion boards that are asynchronous or in other words there is a time lapse between the posting and reply. For these threaded discussion boards there is no requirement that the users are online at the same time.

    Furthermore it is possible to segment the online platform into spaces, such that Space A is only accessible to one party and the mediator, Space B is only accessible to the other party and the mediator and Space C is accessible to both parties and the mediator.

    In this way the platform can be used to replicate the three-room procedure by virtual meetings on an online platform. The obvious advantage of such virtual meetings is that they can be held at a distance, obviating the need to travel and if the meetings are “held” asynchronously, whenever the participant in the mediation has a convenient moment.

    Electronic file management means that all documents pertaining to the case in question are stored electronically in a systematic order. Electronic file management software permits individual documents or passages to be easily retrieved, displayed or printed.

    Electronic file management with a case reduces the time wasted searching for documents and it avoids the carrying of large amounts of paper.

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