Congratulations to Canada for its online Small Claims Court that will become mandatory next year. The Civil Resolution Tribunal (CRT) in British Columbia is slated to hear small claims cases online next spring. The jurisdictional threshold for “small claims” has yet to be established; however, the mandate is that it will eventually rise to approximately $20K USD. CRT adjudications will have the same effect as court orders and will provide the population inexpensive, fast, and easy access to justice for a range of civil disputes.
It is expected that CRT will divert 15,000 small claims cases from the courts each year and will be a big cost-saver for the court administration budget as well as a dispute resolution accelerant. The public will have access to an online guide to navigating CRT that will reduce the need to retain counsel. CRT noted that: “As Canada’s first-ever online tribunal…(we) will give British Columbians convenient access to justice 24/7, so that they can move on with their lives.”
The Canadian initiative closely parallels a study of online courts conducted in the UK under the aegis of Lord Justice Briggs. Richard Susskind chaired the Civil Justice Council’s Online Dispute Resolution Advisory Group, serving as IT advisor to Lord Justice Briggs. Susskind’s Group determined that “For low value claims, we are concerned that our current court system is too costly, too slow, and too complex, especially for litigants in person.” Sound familiar?
Susskind noted various online dispute resolutions already in place around the world that provide greater access to justice by obviating the need for costly counsel; compressing the time for resolving disputes; providing online access; and reducing court administration costs. His report cited Canada’s CRT and Rechtwijzer 2.0, an online service of the Netherlands Ministry of Justice and Security that helps with matrimonial disputes and other civil matters as examples of effective online dispute resolution (among others). Susskind’s team also noted eBay’s online dispute resolution system that resolves 60million trader disputes per year.
Susskind and his colleagues went beyond simply advocating for online dispute resolution: “We should consider not simply improving our court system or even salvaging our traditional ways of resolving low-value claims. We should be prepared to rethink the way in which society handles civil disputes and problems.” Sounds good to me.
Meanwhile, On This Side of the Pond…
One would imagine that the US would follow-suit. After all, this is the land of Silicon Valley, a place where technology is as American as mom, baseball and apple pie. Besides, the US has a huge access to justice crisis and clogged courts. Online dispute resolution would ameliorate both. Why, then, are we not following our Canadian neighbors and European allies?
Simple answer: lawyer self-regulation.
The UK and Canada–among other developed nations–have re-regulated the legal industry or are in the process of doing so. The UK has sanctioned “alternative business structures” (ABS). That means that non-lawyers can have an equity stake and share profits with lawyers in firms; engage in inter-disciplinary practice; and firms can even go public. And though Canada has yet to fully embrace ABS, most provinces are actively engaged in modifying their rules to permit entity-level regulation. The reason: to ensure the public interest is protected regardless of how lawyers or legal service providers seek to organize to deliver their services and to facilitate competition (read: provide scalable alternatives to law firms) and avoid any perception that the regulator is seeking to protect a monopoly for lawyers.
Regrettably, the ABA and, more particularly, voluntary State Bar Associations, have set roadblocks to detour efforts to adopt some form of ABS in the US. Let’s look at a few examples.
- LegalZoom: LegalZoom now boasts almost 3.5million customers including more than 1million small businesses. But the company has had to confront numerous unauthorized practice of law claims, all of which it has won. Had the company not been so well capitalized and thoughtfully structured, any one of those cases would have put it out of business.
- ABA/Rocket Lawyer (Law Connect): This was a promising pilot project in three states involving the ABA and Rocket Lawyer. It was designed to reduce the cost and to increase ease of access to brief legal consultations (attorney engagement could follow as necessary). Two of the pilot jurisdictions, Pennsylvania and Illinois–voluntary Bars–threatened to secede from the ABA if the pilot was not nuked. The third participating jurisdiction, California– a mandatory Bar–lauded the program and resisted its demise.
In the wake of the Supreme Court’s holding in North Carolina State Board of Dental Examiners case, (a state occupational licensing board that was primarily composed of persons active in the market it regulates has immunity from antitrust law only when it is actively supervised by the state), perhaps State Bars will be more circumspect about challenging competition.
That is the retail segment of the market. On the corporate end, it’s a different story. Corporate clients, large consumers of legal services, call the shots. So while there may not be ABS de jure, signs point to de facto practice. Litigation finance–commonly used by corporations as well as large law firms; a proliferation of well capitalized service providers; and blurred lines about what it means to “engage in the practice of law” all point to consumer demand for heightened competition and cost reduction in legal delivery. And the ABA is loath to take on those large consumers.
Conclusion
US courts are clogged and facing budget constraints. Lawyers are too expensive for the vast majority of small businesses and individuals. And technology exists that could ameliorate those challenges. It’s time the US follows the lead of the Canadians, Brits, and others and introduces online courts to handle small claims. This would be part of a broader move to reregulate the legal industry and modernize dispute resolution that is overly protracted and costly.
And while some lawyers will inevitably point to potential downside risks of online tribunals and lament the further erosion of their hegemony over legal delivery, re-regulation and better use of technology will ultimately serve society–and lawyers–well. Enhanced public access to justice will promote the rule of law without which lawyers–and society as a whole–are out of business.
Author’s Note: Thanks to my friend Colin Lachance for his helpful elucidation of Canada’s re-regulation efforts.
