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Web Surfers Seek Justice Online

Dispute resolution Web sites offer quick settlements

By D. O. Volente
ConsumerAffairs.com

February 20, 2008

Ironically, it was a retired judge in suburban Maryland who dreamed up a way for warring factions to resolve their petty issues online. The judge started what he calls VirtualCourthouse.com, a Web site that allows parties to work out their differences online with an arbitrator or mediator. You might call it "Judge Judy.com."

The judge estimates that about 70 percent of civil cases can be resolved this way, in less time and at lower cost than traditional litigation.

"That's a process that takes probably three to four years from the time that dispute first started until it's concluded, involving many, many man hours, a lot of expense, a lot of time and a lot of repetition, mainly paper repetition," said Retired Judge Arthur M. Ahalt, who lives in Annapolis. "In a vast majority of those disputes, the results are fairly predictable, but the parties don't realize that."

Virtual Courthouse is part of a movement toward online dispute resolution, or ODR, of basic alternative dispute resolution cases. The trend includes sites like Cybersettle.com, where a computer, not a person, determines the value of the case, and eBay's in-house ODR system.

Many lawyers and ADR professionals are enthusiastic about ODR, but some say its utility is limited. Others question whether disputes may be settled fairly without the arbitrator or mediator -- the "neutral," in Virtual Courthouse parlance -- seeing the parties.

Ahalt, 65, began developing Virtual Courthouse in 2001, two years after taking early retirement from the circuit court. He had some experience in Internet business, having helped develop an electronic filing system called JusticeLink that eventually merged with another company and was bought by Lexis-Nexis.

That experience, combined with his time on the bench, including a stint as manager of the civil docket, led him to create Virtual Courthouse. In 2004, after a few years of development, Virtual Courthouse went live.

In the past four years, the site has handled about 1,000 cases -- 80 percent of them from Maryland and another 10 percent from the District of Columbia, Ahalt said. Virginia, Delaware and other mid-Atlantic states account for most of the rest.

At first, Ahalt did most of the dispute resolutions himself. Now he is a neutral in less than 20 percent, with his goal to handle only 5 percent of cases.

The ideal case for Virtual Courthouse has only two parties, involves a dispute over money (as opposed to other forms of relief) and is not emotionally charged, he said. Fender-bender lawsuits fit the bill; custody cases and nasty disputes between neighbors do not.

A plaintiff starts the process by registering with Virtual Courthouse, which e-mails the defendant to see if he or she will agree to ODR. If so, the parties pick a neutral from Virtual Courthouse's list of more than 100 in Maryland and 12 other jurisdictions.

Ahalt lets neutrals list themselves in Virtual Courthouse's directory for free and doesn't qualify them in any way; when the parties sign on to use the site, they take responsibility for checking out their neutral, he said.

After choosing a neutral, each party types in a statement of the case and uploads scanned images of any necessary documents, such as doctor's bills. The neutral then decides what the case is worth.

The process usually takes less than 45 days and Virtual Courthouse's record for the fastest case resolution is a blistering 15 minutes from start to finish. But that doesn't mean the neutrals are making slipshod decisions, Ahalt said.

"How long does it take to read that an individual suffered a soft tissue injury in a rear-end automobile accident and went to a chiropractor 15 times and incurred bills of $2,600?" Ahalt asked. "How long does it take a neutral to read that? I mean, there's no dispute as to who's responsible. It's just an issue of how much is reasonable compensation for this individual."

Plaintiff's lawyer Rick Jaklitsch of the Jaklitsch Law Group in Upper Marlboro, Md., said he has used Virtual Courthouse to settle 20 cases. Although his clients tend to get slightly lower awards through Virtual Courthouse than they would if they went to Prince George's County District Court, they get their money a lot sooner, he said.

Defense lawyer Karen Sussman of Sussman & Simcox Chartered in Gaithersburg, who has participated in Virtual Courthouse as both a neutral and an attorney, said her clients are happy with her when she is able to resolve their cases quickly online.

Virtual Courthouse "probably wouldn't be recommended for cases with huge stumbling blocks and issues that are time consuming, but it's a great place for parties to present their arguments when they feel like they want to get something in front of somebody but they don't want (the) delay and the expense of getting it resolved," Sussman said.

For online arbitration and mediation decisions and for simple online case evaluations, Virtual Courthouse charges each party a filing fee of $50 and the arbitrator or mediator charges the parties $300 total. Out of that $300, the neutral keeps $250 and pays Virtual Courthouse a $50 administrative fee.

Lawyers can also elect to start online but have an actual hearing in person. About one-quarter of the cases that go through Virtual Courthouse end in a flesh-and-blood mediation or arbitration, Ahalt said.

For more complicated online case evaluations and all face-to-face ADR, the neutral sets the rate. Even in those cases, however, Virtual Courthouse handles the neutral's billing. Neutrals tend to like that idea, as well as the idea of having all the case documents online, Ahalt said.

As for the attorneys, some attorneys say they charge their clients the same 40 percent of the award to settle their case via online arbitration as they do if the case is resolved by in-person arbitration.

Ahalt said face-to-face contact isn't all it's cracked up to be. He said that minor injuries are generally not visible to a judge, jury or arbitrator, so it doesn't matter if the decision-maker sees the victim or not.

And there are ways to overcome the impersonal nature of ODR, Jaklitsch said. For example, when he has particularly sympathetic victims in a Virtual Courthouse case, he has the clients swear to affidavits explaining how their injuries have affected their lives. Although it is not common, Virtual Courthouse also can handle video and audio so lawyers can upload footage of clients or witnesses.

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