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Judge.me - A Private Small Claims Internet Court (judge.me)
230 points by TelmoMenezes on May 23, 2012 | hide | past | web | favorite | 120 comments

Fascinating concept that potentially can work: private arbitration is a matter of contract, there is nothing in law limiting the ability of parties to agree to be legally bound by a determination reached by a private party (i.e., arbitrator) with whom they contract to make such a decision, and the law provides well-established enforcement mechanisms by which arbitration awards can, if necessary, be taken to court and converted into judgments without too much fuss.

Judge.me also seems like it has taken a credible first cut at a form of execution that is at least workable. It has avoided the very thorny choice of law issues that can arise where the contracting parties are in different locations by essentially having the parties agree up front to be legally bound by what amounts to a free-floating form of law to be applied by the arbitrator regardless of what technical choice of law issues would normally prescribe. It has avoided the problems that can arise with discovery procedures in arbitration by limiting the whole arbitral process to a 1-day to 3-day exchange of evidence by email exclusively. It has also kept processing costs low by reserving for itself the right to choose and assign the arbitrator, by drawing its arbitrators from an established pool as contractors, and by dispensing with the need for witnesses, transcripts, rules of evidence, and all other technical aspects of judicial hearings (again, the parties agree up front to these limitations and that is why they can be legally bound by them even though they are highly unusual by court standards).

What all this means is that this is an innovative way to extend technology to dispute resolution but it will, of course, only appeal to those who can abide by the limitations. To me, this means that the system may lend itself well to small-dollar disputes but not to anything involving complex facts or larger claims. The absence of live testimony and the absence of discovery are particularly limiting in this context - if you can't find out too much about what the adverse party is going to claim and if you can't get your hands on evidence he holds to rebut it, you may be severely prejudiced. At some point not too far up the dollar scale, this likely becomes too risky (this would depend on the individual facts of a case). Beyond this, arbitration generally does not fit too well into non-monetary claims and judge.me would not be an exception to this. Still, for small-dollar cases, it would seem to be an interesting alternative to the small claims court systems in place throughout the U.S. and elsewhere.

The big challenge here will be to see how technology can be used to allow the service to overcome some of the limitations noted above while still keeping it streamlined and cost-effective. I am not sure this can be done but this is an interesting first step and there clearly would be a huge demand for cost-effective handling of claims at a higher level. It will be fascinating to see how this develops.

Thank you for this great review, but could I please correct you on one point: Parties can submit evidence in attachment to their email testimony. If they feel a need for spoken testimony, they can upload a private YouTube video and include the link in their testimony as well.

"the law provides well-established enforcement mechanisms by which arbitration awards can, if necessary, be taken to court and converted into judgments without too much fuss."

What I heard from another entrepreneur in this space (there are several competitors) is that small claims court is effectively not legally binding in most jurisdictions, because very few judges are going to issue a bench warrant or seize your house even if you blatantly don't pay the judgment against you. So even if there is a contract here, it doesn't seem like this would be any different unless there is enough money at stake that it's ultimately no longer under the small claims umbrella if the contract gets violated.

/Not a lawyer

You don't need to arrest someone or seize property. You can just put a lien on it, which is a recorded document that you are legally entitled to be paid first if the person sells their house property, or you can garnish the person's wages or bank account.

If you win a small claims judgement, you have options to pursue collect yourself, like having a lien placed on their house, or having wages garnished. You're right in that it's not like the court will proactively help you collect, but there are tools at your disposal so that a judgement is valuable.

If people on the losing side of a small claims decision are willing to ignore it, why would they be any more likely to abide by the result of a judge.me decision?

(edit: re-reading what you wrote, I think that is your point)

Couple ideas:

Judge.me should have a public list of shamed people who haven't paid their bills. If it gets big enough this might be relevant, people might look at judge.me to see if a person they do business with is reputable. Or maybe it could somehow be reported to the credit bureaus.

Another one is if Judge.me holds the potential payments in escrow before the judgement takes place.

User profiles are indeed the long term goal. This would result in a pure private law instead of the hybrid model we have now where we still need government courts for enforcement.

Just so you know - your 'How it works' page contains a large number of phrases that you presumably intended to mark [as links] bu which aren't links. Looks a bit odd.

Yes, I still have to write the [content pages] for those.

Judge.me should have a public list of shamed people who haven't paid their bills

Would sort of work against their marketing claim that arbitration activity on their service is private.

If arbitration is with a contract, the winning side might have a stronger case in a real court.

Also note that this is arbitration, which is one way a dispute might be settled. Another possibility is that a court will order a mediation, which is not quite the same thing. In a mediation, a neutral third party facilitates a negotiated settlement between the two parties, but has no power to dictate the outcome. In fact a mediation can conclude with no agreement, in which case the next step is a trial or judicial decision (or maybe an arbitration? I suppose it depends on how the contract is written).

This seems like it was put together with a lot of care and thought, so I don't want to be a downer, but - I have some serious philosophical issues with the way this service is currently being presented. Arbitration is not judgement; and an arbitrator is not a court, not even a small-claims court.

I mean: I think it's great that Judge.me is totally upfront about all the other details in their service, and they seem to be on the level as far as their legitimacy according to the New York Convention. What's more, this is really a very useful service - hiring a high-priced lawyer (international law is not a common specialty) for international arbitration over a small $1500 freelance gig seems silly and wasteful.

Still - though I have some faith in the value of this product, and I even feel as though it's relatively reliable and would likely work in most cases for its clients, I sense that there are some problems lurking behind the service simply because of how it represents itself. What I'm envisioning is a situation where the company finds itself a party to some legal action; my feeling is that, no matter where you are in the world, actual judges themselves have very little sympathy or goodwill toward companies that represent themselves as courts.

Again, sorry to be so negative about this; these are just my own feelings about it.

I appreciate your feedback Koeselitz.

The "Small Claims Court on the Internet" marketing line is only used on the homepage, the actual information, arbitration clause, case filing and arbitration agreement make it very clear that we offer international ex aequo et bono arbitration.

The subtitle also clearly states "alternative to court".

Oh hey, I didn't know you were on HN as well. I'm a bit more optimistic about how this will work, based on knowledge of existing commercial arbitration, but it's a reasonable question to ask.

2 Interesting things:

From the arbitration agreement:

Services performed by Judge.me are governed by the laws of the State of Hong Kong. Purchasing the services of Judge.me or any reliance on any condition, representation, warranty or implied warranty (none of which are stated and all being expressly disclaimed) signifies an agreement to submit to the personal and subject matter jurisdiction of the courts situated in Hong Kong. Participants waive any and all rights to challenge venue or to remove the action to any other court.

Hong Kong?

Also, what happens if judge.me goes out of business? How will parties who enter into a contract with the judge.me arbitration clause resolve conflicts?

Hong Kong is where my main arbitration partner lives.

The seat of arbitration only matters if you want to challenge the judge.me award.

I would strongly suggest to change the seat of arbitration to either New York or London if you want to convince companies to trust this service. Both places are preferred by companies worldwide to settle international disputes.

Very interesting to hear that about New York. Are international disputes an exception to the general preference for Delaware?

The seat of arbitration and the choice of law are two different things. Parties prefer London or New York for all challenges related to the arbitration process (stay the hearing, challenge the award, etc) but this does not exclude the actual arbitration from applying Delaware law.

By selecting a different arbitrator. Look up sample arbitration clauses; most do not specify specific arbitrators.

Because the ones that don't specify something else, like an accrediting agency.

Anyways: net-net: if "judge.me" goes away, then disputants will either agree on some other arbitrator (like AAA) or end up in court.

Is there such a thing as a State of Hong Kong?

Technically, it's a Special Administrative Region of the PRC, and not a sovereign state, but I don't know if can be legally referred to as a "State".

Does it matter? Hong Kong has a judicial system with a long track record.

It’s confusing to have legal agreements that refer to non-existent entities. What would you think of a contract governed by the laws of the Kingdom of California?

Just so you know ahead of time: no company you do business with that has actual counsel is going to accept an arbitration clause affirming an agreement to use "judge.me" as its arbitrator.

Still, potentially useful for ad hoc arrangements between smaller firms.

Sure, nor will they accept bitcoins as payement. Now. That's just the status of all ideas when they are born.

You know, you're right. I was imprecise. Let me restate:

Just so you know ahead of time: no company you do business with that has actual counsel is going to accept an arbitration clause affirming an agreement to use any specific arbitrator you've chosen; in all likelihood, most real companies will flatly refuse mandatory binding arbitration.

> in all likelihood, most real companies will flatly refuse mandatory binding arbitration

That's not correct, Thomas. All kinds of big and small companies include mandatory binding arbitration provisions in B2B and especially B2C contracts.

(In B2C contracts, a big part of the appeal of an arbitration provision is that the U.S. Supreme Court recently said, in AT&T Mobility v. Concepcion [1], that B2C contracts can essentially eliminate consumer class-action lawsuits by requiring individual arbitrations and jumping through a few minor hoops.)

[1] http://en.wikipedia.org/wiki/AT%26T_Mobility_v._Concepcion; see also http://scholar.google.com/scholar_case?case=1708881634152670...

I don't mean to dispute that B2B contracts often include arbitration clauses (though obviously I did just that; sorry). Clearly they do. I'm disputing that an (e.g.) freelancer has a chance in hell of getting arbitration into a real company's master agreement that didn't already include arbitration.

You're the expert: what do you think the odds are here? My experience is limited to watching the redlines ping-pong over simple choice of state law in our own contracts.

I think this is a cool idea for a business, by the way.

If I were representing the "real company" Thomas mentions, I would absolutely recommend that my client consider a suitably-designed arbitration provision for a freelance designer agreement.

Not least, I'd welcome the chance to put disputes into an informal, comparatively-inexpensive forum, where the risk of a runaway jury deciding the case mainly out of sympathy for the freelancer is essentially eliminated.

I would almost certainly object, though, to the ex aequo et bono standard that judge.me proclaims --- that standard, in essence, gives the arbitrator carte blanche to do whatever seems good in his or her eyes, regardless what the contract or the law says. That, coupled with the extremely-limited right of appeal of arbitration decisions, could definitely be a show-stopper.

For those interested, as part of the materials for a law-school course I teach, I've posted an extensively-annotated model arbitration provision [1].

[Disclosure: My wife is a full-time labor- and employment arbitrator.]

[1] http://www.techlawnotes.com/docs/Common-Draft-2012-02-15.pdf...

Your concern is exactly why public arbitrator profiles are my number one priority now. Arbitrator reputation should overcome the randomness concern.

Also: in a professional services context? It's your experience that mutual binding arbitration is common in B2B professional services contexts? My thinking here: even a website redesign puts outside people into contact with confidential business information, poachable employees, company IP, and liability if the website e.g. includes IP from other companies.

> It's your experience that mutual binding arbitration is common in B2B professional services contexts?

It's certainly not uncommon.

> even a website redesign puts outside people into contact with confidential business information, poachable employees, company IP, and liability if the website e.g. includes IP from other companies.

All the more reason for arbitration, which by agreement can be made private and confidential, whereas confidentiality in litigation can be very dicey under open-court laws [1].

[1] See, e.g., http://www.nytimes.com/1990/04/23/us/texas-high-court-cuts-i...

Well then! Live & learn. Glad you commented. Thanks!

I've signed many contracts in my life that included an agreement to use a specific court in case of legal action. I'm in Europe, maybe that's unusual in the States?

Lawyers functioning as counsel for real companies will either (a) demand their own choice of law or (b) accept from a small list of known-acceptable choices of law.

It's hard to imagine any corporate counsel ever accepting binding arbitration using an arbitrator they hadn't hand-selected; with choice of arbitration rules comes concessions regarding discovery, regarding appeal, fees, rules of evidence, potentially regarding maximum awardable damages, the list goes on & on.

Choice of arbitration procedures is a much bigger wild card than choice of governing state law. An arbitration clause is more or less a binding promise not to sue, but instead resolve any dispute under an opaque and drastically simplified set of rules. Arbitration clauses are also, as far as I can tell, very much more enforceable when they occur in contracts between businesses.

This sounds like an obvious win when the dispute is over at most 5 figures of web site design; who would want to deal with years of court drama over that? The problem is, real lawyers won't be thinking of the 5 figure contractual amount; they'll instead be thinking of things like liability and IP protection, which are issues that can be denominated in sums that dwarf legal process costs.

Of course this is meant for cases where both parties do not have dedicated counsel; if they did, then they wouldn't shy away from international court in the first place, right? If judge.me doesn't screw up (which they easily could), I can envision them slowly growing, slowly spreading by word of mouth through the legal world, until they get on the "short list" of known-acceptable choices of law you mentioned.

I think it's a neat idea! More so the more I think about it, too. I'm just saying: if you stick it in your template master agreement, corp lawyers may bitch at you.

Judge.me is an arbitration institution, not an arbitrator.

s/arbitrator/particular administrator of arbitration or set of arbitration procedures.

All they need to do is get a few Cravath people and Stanford Law School profs and grads on their about page. Then it's "judge.me, built by alumni of Cravath and Stanford Law School. A Silicon Valley approach to reducing out of control legal costs."

Another alternative would be to work with an up and coming Valley law firm ultimately gunning for WSGR's business, but willing to start by automating arbitration.

This reputation transfer trick is the key way to bootstrap a new enterprise that needs to establish itself. Get a few of the most farsighted members of the old guard to invest, endorse, join, publicize. That is why Coursera and Udacity are so much more likely to succed than the University of Phoenix: because they have Stanford faculty who defected. All they need are a few defectors.

My arbitrators include well known and very experienced libertarian legal scholars - I list some of them below in this thread. Obviously I would welcome Stanford Law faculty to apply as well.


Looks really interesting. Can you tell me how lawyers are reacting to the pricing you are paying them for being arbitrators? (assuming you are paying them) and if you are not paying them, how are you getting them to agree.

When I look at $300 for a case, I think, well, most attorneys bill at $400+ an hour (many for as much as $1,000), and they may get $100/hour+ personally after splitting with the law firm, so if a case takes more than 3 hours to arbitrate it seems hard.

On the other hand, there are no law jobs out there, so maybe you are getting fresh graduates?

I'm just curious I guess.

You get what you pay for. I think you identified it. You are going to get a decision made after a cursory review of the submitted evidence, i.e. a "gut reaction." Might be little better than a coin flip in some cases.

Then the ruling can be attacked as capricious and arbitrary, thereby negating any value to the judgement in the first place. Curious how they are going to deal with that.

Our arbitrators do spend time sufficient time on each hearing. Not sure how to proof this to you.

1. There are plenty of CIArb graduates who like making an extra $75/hour on the side.

2. Some libertarian scholars apply who love the idea so much they want to work below market rate.

Founder did an AMA on reddit some time ago http://www.reddit.com/r/Anarcho_Capitalism/comments/t7eil/i_...

I see, so this isn't just an idea that applies to anarcho-capitalists, it's made by one.

I am the founder of judge.me - thanks for discussing my service here and I will respond to some of the concerns posted here.

By the way, I am planning to apply to the next batch of Ycombinator.

This is a great concept and looks like a classic disruptive innovation play. With the kinds of (large) contracts that I help with, it won't be an option yet, but I look forward to seeing something like this becoming a far more compelling option than the current arbitration offerings.

It is exactly as you describe, we start with targeting the underserved low-end market and will work our way up from there. Hope to become a compelling service for your needs soon.

Great idea for a service but the real issue isn't if I'm right and should win, it's how do I collect when I win?

Edit: this doesn't seem like a better solution than escrow or milestone payments.

"However, in the 4% of awards that are not honored, the prevailing party must seek to [enforce the award] by asking a court where the losing party has assets to turn the arbitration award into a court judgment, upon which the judge can than issue a [fieri facias] ("fi fa" in short), which is an order to the local sheriff to seize enough property of the losing party to make the prevailing party whole again, as well as to (typically) cover the court costs incurred by the entire process of enforcement. (This is why 96% of losing parties pay immediately: Not complying will most likely only incur more court expense for them and cause embarrassment from a forced property seizure.)"

I had to do this once. It takes a lot of time to figure it all out. I'd prefer to stick with milestones and escrow and avoid the whole legal fight.

It can indeed be recommended to use your freedom of contract and specify an escrow to be used for the arbitration award. You can even both prepay some money in there.

Australia has recently enacted laws to limit the effect of unfair contracts on consumers [1]. It comes in to play in "take it or leave it" situations, where the consumer has no power to negotiate. How would judge.me's standard contract clause sit with this? Could a consumer argue that they have been unfairly forced to sign away their right to have their day in court?

[1] http://www.asic.gov.au/asic/asic.nsf/byHeadline/Unfair-contr...

I love how they take Bitcoin.

The video was nice, it explained why I would want to use the service, but it didn't explain how it works. Who's doing the judging? How is fairness ensured? How long does it take to get a judgement?

One of an effectively anonymous panel of arbitrators certified by the "Chartered Institute of Arbitrators" (a UK group). It isn't clear what level of certification is required (CIArb has several levels), or, for that matter, what the CIArb's own requirements for obtaining any of their certificates are.

The next version of my site will include public arbitrator profiles.

Some of my arbitrators:

1. Stephan Kinsella, former Duane Morris partner, www.stephankinsella.com

2. Patrick Tinsley, co-editor with Mr. Kinsella of The Digest of the Commercial Laws of the World

3. Jacob Huebert, Porter Wright Morris & Arthur in Columbus, Ohio + author 'Libertarianism Today'

If it was me (and it isn't, so grain of salt) I'd bump the stuff about arbitrator qualifications to the top of the site, or maybe even include it in the value proposition: I like the idea of selling binding arbitration as an "Internet small claims court", but you might also consider some kind of spin on "Internet access to legal and ADR professionals".

Also: wow would I kill the Bitcoin stuff. Topple pillars of western capitalism one at a time. :)

I don't know, bitcoin is nice as it makes an easy international currency, even for financially isolated countries (aka "axis of evil"). I can see bitcoins being used as well to buy chinese goods/services without having to deal with currency transfer costs.

Also, they might get some business via this, as bitcoin businesses need some sort of arbitration system. Perhaps this could be a court for large scale elicit businesses, though I don't know if they want to tred in those waters.

On the other hand, I think the rapidly growing bitcoin economy probably really needs something like this.

Yes but this has no need for the bitcoin economy.


Are you worried that the libertarian bent of your arbitrators combined with the ex aequo et bono arbitration could lead to the perception of your judgments being perceived as politically biased, especially when it comes to controversial issues such as IP?

For IP there might be an issue as long as we don't have arbitrator profiles, for all other issues: we are dealing with contract law for private disputes so political views on the common good do not matter much.

Item 3 of the FAQ [1] implies that there's not a separate arbitrator fee on top of the $299 filing fee, and the arbitration agreement [2] mentions nothing about an arbitrator fee.

So my question is: What qualified arbitrator would be willing to:

* review the documents submitted by the parties;

* conduct a hearing (via Skype or G+ Hangout?); and

* explain in writing the reasons for his/her award, as required by the "Timeline" section of the arbitration agreement [2];

all for an absolute maximum of US$299 per case?

[1] http://www.judge.me/online_arbitration#process

[2] http://www.judge.me/arbitration_agreement

Agree. By comparison a single panelist UDRP for a domain name is $1500 ($1300 a little less at adrforum.com)


1. Libertarian arbitrators who love the long term goals of judge.me and want to help.

2. Young CIArb arbitrators who have a hard time getting into the very small market of very lucrative multimillion dollar arbitration claims.

Edit: The arbitration hearing is email based. So the process is totally asynchronous, takes only about 2 hours (3 max) of the arbitrator's time.

Before Survivor entered Reality Television into the collective unconscious, there was already a predecessor: Judge Judy. Judge Judy was precisely the sort of arbiter that judge.me aspires to be -- including the somewhat-misleading terminology about "courts" and "judges", even though the arbiter is not strictly bound by local laws but rather by the arbiter's whims -- also they probably excluded the $150 cost to bring the lawsuit, since they instead sold ads. Actually, if you told the reality TV folk about Judge Judy nowadays they would probably ask the audience to text in votes which would determine the ruling, and the "judge" would mostly be a mediator and host who would decide what evidence was "admissible" for the public's consumption or so.

Judge.me might in these respects be a difficult sell. If it is ideologically anarcho-capitalist, then that provides robustness against corruption: but it also means that your 'judges' might simply say "yes there is this nuance in your country's law, but I don't like it and it seems too complicated, so I'm just going to ignore it." There doesn't seem to be an appeals process if this happens. So the lawyers of large corporations might be very hesitant to turn over their contracts to something so seemingly whimsical. I don't know. I am not sure that this acts to further anarcho-capitalist idealism, but it will probably work for its purpose as long as that idealism exists in the first place.

1. Yes I am an anarcho-capitalist and this is the reason I started the company.

2. Judge Judy is indeed arbitration, where parties waive their right for privacy in return for a free arbitration.

3. Ancapistan would fundamentally be a Kritarchy (rule of judges), so arbitrator reputation is crucial and case law can develop from that. Also, even "ex aequo et bono" arbitration simply means applying contract law in practice.

Ok. You won. I'm scared.

I have been wondering why there is not organization that makes it easy in 2012 to have a company that operates across several countries. I thought that simply creating a legal framework was taking some time but that finally legislators would manage to get there, they are just lagging behind.

But this... I don't want this. I don't want a private justice, I don't want "arbitration" to become the norm in the way conflicts are handled in the global village. No, this must not happen, this is the root of too many dystopian visions.

Arbitration : this artificial "court" decides arbitrarily who is right and once this is done, the initial dispute is still there. If the "loser" does not accept the arbitration, you still have to go to court. It solves nothing.

You know what is the next step ? A private police to enforce the decision of the arbitration court. You would sign in the initial agreement all the necessary authorizations for that. It would work. It would be legal. And even if illegal, an army of lawyers would delay several years the application of the real law.

I don't want that.

Our arbitral awards are binding in 146 countries because they comply with the 1958 Convention of New York. For private commercial disputes, governments have given up their jurisdictional monopoly a long time ago and I disagree with you that this is a bad thing.

Ok. Say I have a client that does not want to pay me. I live in France, the client is in Japan. Contract signed under the Japanese law. Let's supposed we had chosen you for arbitration. I win the arbitration but the client refuses to comply. What happens ?

You buy an Affidavit of Arbitration from us (costs $35) and than ask the a court in any jurisdiction where the losing party has assets to recognize and enforce your award.

Most jurisdictions will add the cost of court recognition to the amount of assets to be seized.


Ok, so instead of just going to court, I have to do arbitration first, and then go to court. Sorry, I don't see what your added value is.

1. Recognition of arbitral award is much faster.

2. Awards can be recognized in 146 countries.

3. In 96% of the cases recognition is not even needed, the losing party pays up.

1. Sure, it is much faster than getting a court involved but I think that in most case where you intervene, an agreement would have been reached without going to court either.

2. That just means that you found 146 countries where a breach of contract is illegal.

3. How do you measure the 96% ? I am doubtful of such a high statistic. Do you provide legal help if going to court is necessary to enforce the arbitration ? With such a high rate of success, it would be profitable for you and be really helpful.

My basic claim is that your service is indeed cheap but is logically probably worth little more than what you charge. Going into court is much more expensive and I doubt that you really can avoid such an event.

1. I fail to see how using an arbitration clause in your contracts results in only disputes that would be resolved without court.

2. It means 146 countries have signed the 1958 New York convention.

3. The 96% is a CIArb statistic.

One step closer to anarcho-capitalism! Much love and respect Peter-Jan! This is an amazing service that many have been hoping for.

Ping me if you have UX needs.

I don't know how well advised saying "No legal mumbo jumbo" then immediately using the latin phrase "ex aequo et bono" is.

Ha, good point. Ex aequo et bono is the legal mumbo jumbo term to say no legal mumbo jumbo :)

Yeah, but what does it mean?

It translates as "based on fairness and equity", i.e. the arbitrator applies equity principles (contract law) instead of a specific local law.

So, the site makes it easy to seek a binding decision against someone that's enforcable anywhere. If I'm the potential plaintiff that's great! But if I'm the potential defendant, I just say no to the request. I want it to be inconvenient to bring a binding decision. I at least make the P go through the pain of seeking out a physical arbitrator. In the status quo - no decision - I win.

You are right. Agreeing to use an arbitration service such as judge.me is much easier pre-dispute (arbitration clause) than post-dispute (submission to arbitrate, i.e. just case filing and hoping the responder accepts the case).

Great to see somebody from Startup Chile! Congrats on the launch Peter :-)

While I find this business extremely fascinating, I find their Careers page even more interesting. http://www.judge.me/careers

Particularly: "Every 6 months, the entire team votes on hire / fire for each team member." - You've just been voted off the island!

Maybe you could get a binding arbitration clause in your employment agreement. Though I don't know who you could suggest as arbiter...

It's a good idea in theory, but I don't see it being realistic in many cases where your legally under-represented plaintiff would be able to win. First you have to get the other party into arbitration. At this point they have already breached their agreement, so even if it is a clause in a contract, who says they are going to participate? You would need considerable leverage to compel them to spend the $149 to end the dispute. And then assuming you do win, what compels them to honor the judgement? I did read the FAQs, but if I have to go to a court to effect a lien or seizure, why did I spend $149 on arbitration when I could have spent $50 to file in court in the first place?

Because actually prevailing in court will cost more than $50, whereas prevailing in a legal claim for the award of a binding arbitration is very inexpensive; in reality, most bona fide disputants in arbitration can be expected to simply pay.

The filing cost does vary between jurisdictions, but about $50 to file, another $20-30 depending on how you serve the defendant, and since there are no attorneys in small claims, that about covers it. the time spent in court could be considered a wash compared to the time spent collecting and sending evidence for arbitration. The point being, my expectation in the first place was that the client would honor the agreement, so expecting them to honor a judgement is a little hard for me to believe. Why take the roundabout path when I can go straight to court? I guess based on my own experience I don't feel this service covers the typical dispute worthy or arbitration/legal action. A civil end to a dispute can only be accomplished by two civil parties working it out.

I think this is a great idea. Sounds really solid and thought out. The design isn't exactly amazing, but it's ok. I'd suggest hiring a designer (or me) for a little cash to help straighten a few things out.

Also I'm not sure I'd trust a legally binding service to a .me domain..

Design appears to be inspired by stripe.com

That is correct.

I had just about given up on a slightly similar idea I had been working on briefly called http://www.TinyCourt.com. Much more downmarket than yours, using mechanical turk to provide verdicts on petty squabbles with family, friends, co-workers, etc., almost more as an entertainment product than actual arbitration. The enthusiasm for this idea in the comments makes me think I might have been about to give up too early.

That's funny, I actually stumbled upon this recently.

Interesting concept, would be cool if it caught on! Suffers from a chicken-egg problem, though.

We only did 3 cases last month, so yes I agree with you. The arbitrator side is going great, we just need more case load.

Do you have a "model case" that you think fits in your sweet spot?

Have you thought about brainstorming through a specific set of model cases: for instance, construction contracting (apparently an arbitration mainstay), or web design, or stuff like that, and then building a "product" around each of those cases so you can tune your marketing and built industry-specific social proof?

I think software development and design disputes might be a sweet spot: Small value contracts (most below $100K), often international, parties often dispute project delivery and payment.

I think there is a statutory requirement for an arbitration clause in UK construction contracts.

Yes, construction and real estate in general is a major area for arbitration.

The point of getting a lawyer (1) and later going to court (2):

(1) At some point in a conflict it's not the technical expertise anymore which one may get with a lawyer—no, it's that there's is somebody who is not emotionally involved, who doesn't fear to loose, finally someone whose mind is at 100%, who is fully aware and who has no emotions like fear, hate and lack of self-control which could impair negotiations in court.

That's the main reason one should get a lawyer: those who are involved in a case cannot perform as good as the not involved lawyer. And latter is important because the court shall get a truthfully and entire picture in order to reach a fair verdict which is in your very best interest.

With Judge.me, it's strongly recommended to get a lawyer or another not involved third party who is in favor with me anyway and this person would just say, 'hey I don't know Judge.me, even worse I don't know the people there and I do not know their history of cases and how their decision making process is. I cannot prepare you carefully as I could do if we went to a normal court and thus, I cannot tell if you gonna win. So, I'd suggest to go to a normal court (2)"

I clicked on this because there was a post on HN just the other day about _judg.me_ [1] and I assumed this was a follow-up. Interesting that this is entirely unrelated, but so close in the URL.

[1]: http://news.ycombinator.com/item?id=4012478

I'm not sure about the logo. It's a set of tipped scales. On one hand I suppose you're showing how you'll weigh it up and measure the cases, but it can also imply your unbalanced and unfair from the start.

My biggest problem with this is that "fairness" isn't objective and impartial, which is in contrast to the intent of U.S. law. Fairness is a function of one's life experiences, which may differ between arbitrators and subsequently shift the balance of equity between claimants. This issue compounds when multicultural parties are adversaries in arbitration. Plus, arbitration provisions are themselves subject to the selected forum's laws of contract construction. This means that a court could throw out the entire contract. Oh right, and then there's the issue of judgment enforcement: once your arbitration is decided, you'd still need a court to enforce the judgment.

Courts generally enforce arbitration clauses even when they're consumer-facing and one-size-fits-all. You'd still have to go to court to enforce the claim if one party didn't pay it, but you probably wouldn't have to re-argue the case; the courts apparently just verify that any procedural agreements were upheld and then accept the arbitration decision.

From reading up on pitfalls of arbitration clauses, it seems the opposite problem is stickier: arbitration is by design not subject to legal appeal, and attempts to carve out rights of legal appeal in arbitration clauses have failed in court.

I'm referring to some problem that renders specific provisions of a contract unenforceable. In some jurisdictions, absent a severability clause, the entire contract could be thrown out, meaning that judge.me would no longer have consent of the parties to arbitrate the dispute.

But I agree: arbitration vs. litigation is typically an "either or" scenario; you don't get the best of both worlds.

Do you perform arbitration "in accordance with the commercial arbitration rules of the American Arbitration Association"?

No, we offer ex aequo et bono arbitration based on the Lex Mercatoria, the merchant law that developer in the middle ages. Basically contract law as known in common law systems.

Interesting idea. Good luck to you and the business.

But why are so many [things] in the [How it works] page [wrapped] with [brackets]?

Because I still need to write the [content pages] for that.

Who says the free market can't provide law and order!

Modria is the leader in this space.

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