By Lyle Moran
Illustration by Tim Foley/ABA Journal
Los Angeles Superior Court Judge David Cowan has seen firsthand how contentious small claims cases can get.
Self-represented litigants unfamiliar with court procedures often become frustrated with the way hearings are conducted, he says, and take it out on their opposition by engaging in irrelevant personal attacks.
The heated nature of such proceedings is a major reason why Cowan says he harbored some doubts about a court initiative launched in late February requiring litigants in small claims cases to try to settle their disputes through an online platform before appearing for court hearings.
Court leaders say the online dispute resolution program, known as LA-ODR, is part of their ongoing efforts to enhance access to justice for self-represented litigants through the use of technology. A 2019 California Justice Gap Study found that 55% of Californians at all income levels experienced at least one civil legal problem in their household in the prior year, but nearly 70% of them received no legal assistance.
The urgent need to process cases remotely amid the COVID-19 pandemic also was an impetus for small claims ODR and for the LA court’s May 2020 announcement it was expanding the use of Tyler Technologies’ Modria ODR platform to help resolve child custody and visitation issues.
The court’s small claims program enables parties to use electronic devices such as smartphones to confidentially share documents and communicate at times convenient to them about the issues in play. The parties are also guided through a series of questions about their cases and can use free online mediation services to help them work through their differences. If litigants reach a settlement, the ODR system, developed by TurboCourt, generates the forms necessary to finalize the deal and electronically files the agreement with the court.
Cowan, who supervises the civil division of the nation’s largest trial court, says he’s been pleasantly surprised by the early results. Nearly 1,000 cases had been registered for ODR within the program’s first two weeks, and negotiations had started in roughly two-thirds of those cases, Cowan said at the ABA Section of Dispute Resolution’s virtual spring conference in April.
As of August, nearly 300 small claims cases had been resolved through the ODR platform without the need for any court appearances, according to subsequent figures provided by the court. While those numbers may seem like a drop in the bucket for a court that in the 2018-2019 fiscal year saw roughly 59,000 small claims cases filed, Cowan says every case that gets efficiently resolved through ODR is helpful, and he emphasizes that it often takes time for new systems to gain traction.
He also notes that ODR gives litigants the chance—for free—to work out agreements without their needing to make their way through Los Angeles’ notorious traffic to hearings, a perk that would likely be appealing even without a raging pandemic.
And beyond the consumer benefits, ODR enables the court to focus on cases that don’t get settled online and need judicial attention. “I think it definitely is an additional means of providing access to justice, and at the same time not closing any doors to justice, either,” Cowan says. “It seems like a win-win for everybody.”
The LA Superior Court is one of at least 89 courts across the nation that have turned to online dispute resolution in recent years with the dual goals of strengthening access to justice for litigants and more efficiently processing cases. The growing interest in ODR among courts has been fueled by the success of some early pioneers as well as the pandemic, which prompted many courthouses to close their doors for months and resulted in large case backlogs.
But courts’ forays into ODR have not come without hiccups. Some courts are struggling to get their initiatives off the ground because of technological challenges and opposition within the legal community. Additionally, there are ongoing consumer advocate concerns about whether the issues self-represented litigants face in the traditional courtroom setting can be effectively addressed by ODR platforms—and even ODR supporters acknowledge that there is always room for improvement.
While ODR has been used by e-commerce businesses such as eBay and PayPal to help buyers and sellers resolve their disputes for more than a decade, it has taken far longer to gain a foothold in U.S. courts.
According to the National Center for State Courts, this country’s first court-connected ODR system did not launch until 2014, which is when the 14A District Court in Washtenaw County, Michigan, began piloting a platform to resolve certain traffic offenses. Its system was developed by Michigan-based Court Innovations Inc., which calls its ODR platform Matterhorn and was founded by University of Michigan law professor J.J. Prescott.
Other courts started to slowly add ODR programs in the subsequent years, but there were still only 19 sites by the end of 2017, and most were in Michigan, according to an ABA Center for Innovation Report released last year. Experts credit Court Innovations Inc. and forward-thinking court leaders for Michigan’s early leadership in ODR.
It was in 2018 and 2019 when the pace of ODR adoption by courts picked up significantly, with 47 sites being added, according to the Center for Innovation. This brought the total number of court-connected ODR locations to 66 spread across 12 states as of the end of 2019.
Another 23 court-sponsored ODR offerings were launched in 2020 and the first four months of 2021, according to an NCSC report released in May, and most of these programs began providing services during COVID-19.
Illustration by Tim Foley/ABA Journal
While there are differences in the various ODR platforms courts are using, most offer core features along the lines of those present in Los Angeles. ODR users can log in from mobile phones, home computers or other electronic devices. Often, they answer a series of questions about the nature of their dispute so the platform can determine what legal issues and potential remedies might be in play. The platform also allows litigants to communicate and share documents securely, and many have neutral human facilitators to help resolve matters. Engaging in a virtual mediation is increasingly an option for litigants as well. If the parties remain at an impasse or don’t meet a deadline for settling via ODR, the traditional court hearing process moves forward.
These court-sponsored platforms provide services for a wide array of case types. Traffic was by far the most common of the 14 case areas offered as of the end of 2019, according to the ABA report, with 34 sites offering ODR for those disputes. Other common case types include warrants, civil debt and small claims.
These practice areas are among the ones in which a high percentage of litigants are self-represented, and this results in many civil cases being uncontested and ending in default judgments or dismissals. Proponents claim ODR can make it easier for these self-represented parties to participate in the legal system because it allows them to handle their cases without having to go to a physical courthouse, a journey that can require taking time off work and finding child care. Litigants who use ODR platforms also typically don’t accrue the costs associated with traditional litigation. Additionally, supporters say ODR can help consumers resolve their legal matters more efficiently and without the uncertainty of stressful issues hanging over their heads for extended periods.
“The time to resolution online is days—not weeks, not months, not years,” says Colin Rule, the co-founder of Modria, an ODR provider that was later acquired by Tyler Technologies.
Proponents argue ODR’s benefits are supported by results in the field, including from some of the early adopters among courts.
In late 2016, Franklin County Municipal Court in Ohio launched an ODR platform focused on City of Columbus tax cases. This subset of small claims matters historically had a high rate of default judgments against defendants because of their lack of participation. In the first year of implementation, 78% of tax cases handled within the ODR system developed by Matterhorn were resolved “either through short-term agreements that resulted in full dismissal (55%) or through some form of long-term payment plan (23%).” These statistics were included in a 2017 report from the Joint Technology Committee, which was created by the Conference of State Court Administrators, the National Association for Court Management and the NCSC.
The joint committee also reported that nearly 30% of users accessed the Franklin County ODR system outside of court hours, and roughly 17% of users resided “outside the county and/or state and would likely have had significant difficulty resolving their cases without the ODR process.”
The positive trends the committee highlighted continued in subsequent years and prompted the court to begin offering ODR for additional case types, says Alex Sanchez, manager of the Franklin County Municipal Court’s small claims and mediation division. “All in all, we met all of our goals for the platform, both in increased access and in reducing the default judgment rate for our small claims cases.”
Also in late 2016, the 20th Circuit Court in Michigan’s Ottawa County began piloting ODR for child support compliance issues. In that county, a parent who fails to pay child support typically needs to appear at a show-cause hearing and could have a warrant issued for their arrest if they do not attend.
The Matterhorn ODR platform Ottawa County started using allowed it to communicate with noncustodial parents regarding compliance with child support orders, including through text messaging. In the first year of ODR implementation, show-cause hearings for failure to pay were down 27%, and failure-to-appear arrest warrants were down 36%, according to the Joint Technology Committee report.
Those trend lines have continued in the years since, according to Kevin Bowling, the court administrator for the 20th Circuit Court. Additionally, for those noncustodial parents who have participated in ODR, the number of them making child support payments has increased by 25% to 30%, Bowling reports.
He says it was especially beneficial for his court to be able to offer families ODR options amid the COVID-19 pandemic, including through a new online system launched for parenting time matters in August 2020.
Beyond the consumer benefits, supporters say ODR platforms can also help relieve the administrative burden court systems face in processing cases, particularly in high-volume practice areas.
Officials in Utah, which began rolling out ODR for small claims in 2018 as part of a pilot, say the in-house platform the state developed has benefitted courts in myriad ways.
Illustration by Tim Foley/ABA Journal
Judge Brendan McCullagh from the West Valley City Justice Court recalls that prior to implementing ODR, the two-hour blocks of time scheduled for small claims matters would often be booked with up to 50 cases. He says a large majority of these matters would ultimately result in defaults because of one or both parties not being present, but working through the cases to see who was present would eat up valuable courtroom time. ODR helps cull the failures to appear and defaults from the court process because those matters are now managed administratively, according to McCullagh, and the cases that the parties can easily resolve online also no longer require the use of courtroom time. “That leaves us with the cases that really do need to be tried,” McCullagh says.
He says ODR also assists with the small claims cases that come before him for hearings because the process enables the parties to pinpoint the key issues in play. He credits neutral ODR facilitators who communicate with the litigants for their work in that realm and for reminding the parties to bring to court the evidence they believe supports their claims. “So we actually get better-prepared people when it is time for court,” McCullagh says.
An NCSC review of Utah’s ODR system released in December 2020 confirmed the judge’s observations and highlighted that the average time to disposition for ODR cases decreased by five weeks or more for all disposition types other than dismissals.
Judges and private sector officials also report that the large backlogs many courts have in certain case types are often what prompt them to consider ODR options in the first place. Jamie Gillespie, general manager of ODR at Tyler Technologies, says the court shutdowns sparked by COVID-19 only increased the appeal of online dispute solutions in the court system realm. “Everyone realized we are going to have to do something, and this is a really good option to try to help maintain our backlog,” she says.
Along those lines, Cowan expresses hope that the LA Superior Court’s ODR platform for unlawful detainer matters, developed by TurboCourt, which it planned to launch this fall, will help the court work through a backlog of such cases due to COVID-19-related eviction moratoriums.
Despite the ODR successes some court systems have experienced, others have struggled to successfully get their online platforms off the ground.
For example, a pilot program in Florida that got underway last year was slated to feature six judicial districts, but three of the state circuit courts involved withdrew from participating prior to launching services to the public.
The withdrawals came “after numerous delays related to the vendor’s inability to provide a functional platform,” according to a January 2021 report from the state’s Online Dispute Resolution Workgroup. Matterhorn was the vendor for the three circuits that withdrew and one of the three that moved forward with the pilot; Modria was the vendor for the other two circuits that moved ahead with the pilot.
The onset of COVID-19 also presented difficulties in Florida. “There were numerous factors that affected the outcome of the ODR pilot, including product delivery issues, lack of interest in modifying existing court processes, the prevalence of other remote alternatives to ODR such as videoconference-aided court, and stretched resources as a result of COVID-19, among others,” the Florida report said. “These outcomes reveal the need for courts to make careful assessments regarding the purpose and utility of ODR prior to implementing such a service.”
Matterhorn CEO MJ Cartwright agrees that the pandemic made it difficult for some Florida courts to implement ODR systems while simultaneously working to move other functions online.
“The courts we were working with there were overwhelmed,” she says.
However, Cartwright notes the Matterhorn platform for resolving civil traffic infractions online used by the 11th Judicial Circuit in Miami-Dade County has produced positive results. ODR users in that circuit spent an average of 6½ minutes resolving their legal issues compared with the 68 minutes non-ODR users spent, according to the Florida workgroup’s report.
Even though some courts faced challenges, the Florida Supreme Court announced in March that it was expanding the ODR pilot to all interested judicial circuits so it could gather additional information. It blamed COVID-19 and “other factors” for the initial pilots resulting in “insufficient data to fully assess ODR.”
The New York State Unified Court System also has encountered difficulties in launching ODR. Several years ago, it considered implementing ODR for consumer debt collection cases. But legal service providers “mounted an all-out assault on the project, claiming that an ODR process would put vulnerable populations at risk for careless or unscrupulous creditors,” according to a national Joint Technology Committee report. This strong resistance prompted the court system to halt its efforts in the consumer debt area and explore using ODR for a different case type, the report said.
New York ultimately decided to focus on small claims cases, and earlier this year, Manhattan’s Civil Court launched an ODR pilot program for eligible matters via the Matterhorn platform. Anthony Cannataro, who was the administrative judge of New York City’s Civil Court when the small claims ODR offering went live, acknowledges there were “growing pains” with the new online offering in its initial months. The challenges included some technological issues the court system needed to have its outside vendor address.
Cartwright says COVID-19 hindered the launch of ODR in New York, but her team was confident it could help the court with any concerns.
Cannataro, who has since become a justice on the New York Court of Appeals, also says there was minimal usage of the ODR system by litigants in the early going. He expressed hope that expanding the types of small claims cases that could be handled through ODR and offering the program in other geographic locations would boost participation.
“We are not giving up yet,” Cannataro said in the spring. “We are going to try to work out the kinks and move more cases through.”
However, consumer advocates say courts should weigh carefully whether to implement ODR systems in the first place. They especially worry about the use of ODR in debt collection cases, which typically have an attorney representing the plaintiff and a self-represented defendant.
April Kuehnhoff, a staff attorney at the National Consumer Law Center in Boston, says this power imbalance can lead to defendants feeling pressured into entering repayment agreements without raising legitimate defenses they may have. “So throwing an unrepresented party into this negotiating space online really threatens to re-create a lot of the abusive situations that happen in hallways or in courtrooms around the United States.”
Dora Galacatos, executive director of Fordham University School of Law’s Feerick Center for Social Justice, says she also has concerns that the top goal of court-sponsored ODR programs appears to be generating settlements between the parties. This can lead to consumers in debt collection cases entering into “catastrophically ill-advised” agreements even when they have strong defenses, according to Galacatos, whose center was among the groups who opposed New York’s attempt to introduce debt-collection ODR.
“I think that ODR has not promoted the fair administration of justice, which is trying to reach outcomes and adjudicate cases based on the merits of the cases,” she says.
Kuehnhoff says one way courts can address advocates’ concerns is by thinking about how the ODR platforms can be used to facilitate and strengthen consumer access to legal representation. Court systems should also involve consumer advocates in discussions about implementing ODR initiatives early in the process, rather than near the end, which Kuehnhoff says has happened in some instances.
“I think the advocates need to be there from day one,” she says.
Kate Marr, executive director of Community Legal Aid SoCal, headquartered in Santa Ana, California, says she understands and shares the consumer advocates’ worries about ODR. But she also says she thinks there is a place for online dispute resolution under the right conditions. A few years ago, her organization created an ODR platform for small claims cases filed in Orange County Superior Court, the development of which was financed by a $152,200 grant from the Legal Services Corp. The ODR platform was developed by the Justice Education Society of British Columbia.
Marr says the neutral facilitators her organization’s ODR program uses help protect against power imbalances, and many litigants have already gone through a small claims adviser initiative Community Legal Aid SoCal offers to provide more information to the public about such cases. Her organization can also connect litigants with additional resources if it feels like they are unprepared for the ODR process or would not do well using the online platform.
“I think that our ODR program has safeguards built in because it is housed at a legal aid organization,” Marr says.
Even courts that have experienced some success implementing ODR programs acknowledge there are always opportunities to strengthen the consumer experience.
For example, New Mexico’s initial version of ODR for consumer debt cases required the parties to conduct negotiations through online messages on a web-based platform. In December 2020, the state courts announced that both sides in a case could also use smartphones or tablets to receive text or email updates about their online negotiations and use enhanced chat functions to communicate in real time. Additionally, defendants are now able to make an initial proposal through the ODR platform, developed by Modria, rather than having to wait for the plaintiff to make the first settlement offer.
These changes and others helped boost ODR participation numbers and generated more settlements, according to Second Judicial District Court Judge Jane Levy, who chaired a judicial group that developed the latest version of New Mexico’s ODR.
Nonetheless, on July 1, New Mexico began pausing referrals to ODR for newly filed cases. Levy says this was done so that the court system could work with its vendor to make its platform available in Spanish and possibly other languages in addition to making the system compliant with the Americans with Disabilities Act.
“It felt like if we were really going to do this right and really figure out how to make ODR a really good tool for access to justice, we needed to step back,” Levy says. “To run ODR is to constantly try to improve it.”
Meanwhile, Utah’s court system participated in a usability evaluation of its small claims ODR platform. The review was conducted by the Innovation for Justice Program at the University of Arizona’s James E. Rogers College of Law, and the results were released in September 2020.
In light of data indicating 64% of defendants do not log in to Utah’s ODR platform after receiving a summons, the Arizona research team recommended the ODR registration process be streamlined. The report also recommended that Utah make it easier for ODR users to upload and share documents, noting the process for doing so was not intuitive.
Brody Arishita, the Utah state court system’s application services leader, said court officials welcomed the feedback and were working to implement some of the recommendations. Stacy Butler, director of the Innovation for Justice Program, commends Utah officials for being willing to engage in the usability evaluation of its ODR platform. “The only way to make it better is to learn what is not working and fix it,” she says.
Overall, Butler describes ODR as presenting both risks and opportunities for courts and other groups trying to address issues in the civil justice system. “We can take that broken system and just move into a new technology platform, or we can use the dawn of ODR as an opportunity to repair some of those breaks in the system,” she says.
This story was originally published in the October/November 2021 issue of the ABA Journal under the headline: “Lawyers and Judges Optional? Online dispute resolution promises to increase access to justice, but challenges remain.”
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