Friday, February 12, 2016

Why online small claims courts don't work

If you search the internet for phrases like "online small claims court," you're bound to find all kinds of solutions that claim to remedy disputes better than small claims courts, but the fact is that every one of them is no better than small claims court.  In fact, some are actually worse.

If you really want an online alternative to small claims court, your best bet is an online settlement service.  Here's why:

  1. You still have to use a judge: No matter if it's court, mediation or arbitration, online or offline, all those systems require adjudication. Adjudication means that someone, or some people, are authorized to review and judge the merits of your case.  When you allow some other person to hear your case, you take the risk of them being biased, ignorant about your situation or, to put it plainly, just not very smart.

    An online settlement service has no judge. The system handles everything for you and the other party. The two of you never communicate.  The system does all the work for each of you and provides all the solutions each of you need to settle the case.
  2. Your judgement isn't final.  in all other systems, even the ones offered by state and local governments, the judgement you receive can be appealed by the other party, which means you can go through the entire process all over again, including paying more fees and wasting more time.

    All decisions from an online settlement service are final and cannot be appealed.  Once the matter is settled, each party can download a Certificate of Final Resolution that states, in writing, that the matter has been settled to each party's satisfaction. The CFR also includes a "hold harmless" clause that states neither party may ever litigate the matter again.  No appeals.  It's over and both of you can get on with your lives.
  3. Courts don't honor credit cards. If you lose in court, you must pay the full amount in cash or by check. That can put the losing party in a tough position, or even worse, prevent him from paying at all (and many judgements do go unpaid).

    Online settlement services allow payment by credit card, which makes paying the judgement in full much more likely. When the losing party realizes he can pay the judgement over time, he's much more likely to pay in full.
  4. Online court systems are slow. Like any government institution, online courts move at glacial speed. Your case review could take weeks or months.

    Online settlement services can be over in as little as a day.  It's true! If both parties respond efficiently, the entire matter can be disposed of -- forever -- in as little as one day.
Before you sign on to any "online small claims court," be sure to do your homework.  It may not save you time or money. In fact, it could cost you plenty more of each.

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