Susskind poster child Modria gains profile in the US for online dispute resolution system

A Silicon Valley online dispute resolution company founded on PayPal and eBay technology has made headlines in the US this week after The Associated Press (AP) called it “the next wave of technology in which the law is turned into computer code that can solve legal battles without the need for a judge or attorney.”

Modria, referred to earlier this year in a high level UK disputes report led by Professor Richard Susskind, is a cloud-based platform founded in 2011 by Colin Rule and Chittu Nagarajan – also founders of the online dispute resolution systems at eBay and PayPal. Those systems now process over 60 million disputes a year, according to Modria, 90% of which are solved though automation.

Through its ‘resolution center’ Modria collects customer information and the details of their complaint. It then maps that information to a corporate’s resolution rules, including policies on refunds, returns, exchanges and chargeback policies, before delivering a resolution.

Unhappy high value customers with no previous disputes may be offered an automatic partial refund and a gift card to retain their business, while the site facilitates a dialogue between the seller and customer to resolve more complex disputes.

Rule told the Legal IT Insider: “Today, Modria is helping eCommerce companies deliver fast and fair resolutions for their customers, just like we did back at eBay and PayPal.  But we’re also extending those tools and approaches to help government agencies and courthouses to deliver fast and fair resolutions to citizens.”

Officials in Ohio use Modria’s software to resolve disputes over tax assessments outside of court, while other clients include the American Arbitration Association and the Dutch Legal Aid Board.

Modria was used as an example of a working online dispute resolution system in a Civil Justice Council (CJC) report published by Professor Susskind in February 2015, which called for a dedicated state-run online court to operate alongside the traditional court system.

The report proposed a radical and fundamental overhaul of the court system, saying: “Online dispute resolution is not science-fiction. There are examples from around the world that clearly demonstrate its current value and future potential, not least to litigants in person. On our model, an internet-based court would see judges deciding cases online, interacting electronically with parties. However, our suggested online court has a three tier structure, and we expect most disputes to be resolved at the first two stages without a judge becoming involved.”

Tier one would focus on dispute avoidance through online evaluation; tier two an attempt to reach agreement online; and tier three dispute resolution via online judges, largely on the basis of papers received electronically.

The report recommended that Her Majesty’s Courts and Tribunals Service set up a pilot as soon as is practicable with a view to rolling out an online court based on the findings. It made it clear that it was not endorsing or recommending Modria or any other examples of online dispute resolution.

Rule added: “The internet is changing our expectations for how problems should be resolved.  We’re now used to making purchases and getting information online with just a few clicks, 24 hours a day. It’s inevitable that we’d bring those expectations to our interactions with the legal and governmental sectors as well.”