In at least a dozen states, civil courts are experimenting with ways to resolve cases using online negotiation. In theory, these programs save courts, the public and attorneys time and money.
But this seemingly uncontroversial tool has received pushback from consumer advocates, legal aid attorneys and, in at least one state, lawyers who represent creditors in debt collection lawsuits.
Initial data for programs in three states shows that they risk mirroring problems found in civil courthouses.
Chief among them is the reality that many people who are sued don’t respond to the case at all, either through legal filings or by appearing in court. They frequently don’t get involved in online negotiations, either.
Why civil courts are turning to online negotiation
Online dispute resolution is a chat platform where people involved in a civil case try to reach an agreement outside of court.
In the last several years, some civil courts have started using this technology in areas including traffic tickets, debt collection and disputes between landlords and tenants. The programs can be used before, during or after a lawsuit.
In the United States, civil courts are dominated by people who can’t afford an attorney and are representing themselves in cases that could impact their families, housing and financial stability.
Even people with good defenses against a lawsuit are less likely to prevail without an attorney. And in common civil cases, like evictions and debt collection, people are most often sued by a person or company that can afford to hire a lawyer, creating a huge gap in legal knowledge and power between the two parties.
Courts say online dispute resolution empowers people who can’t afford an attorney to resolve their legal problems on their own more easily.
Some also say low-income people benefit from the program because they don’t have to take time off work or pay for child care to go to court. However, many low-income households don’t have access to the internet or a computer.
Perhaps the biggest draw for courts is the idea that online negotiations can save money and staff time.
Alex Sanchez is a mediator who oversees the online dispute resolution program for Franklin County Municipal Court in Columbus, Ohio. During an interview last month, he said he was mediating 23 disputes online at the same time.
“So, it allows me to juggle multiple cases, whereas if they were in person, I’d only be able to do one per hour,” he said.
Courts also hope these online programs can help with some of the issues surrounding debt collection lawsuits, which doubled from 1993 to 2013, according to a Pew Charitable Trusts study.
In most of those cases, the defendant – the person being sued – doesn’t appear in court, and the creditor wins the case automatically through what’s called a default judgment.
The majority of debt collection defendants have no attorney to call attention to holes in their cases. Suits are sometimes filed against the wrong person, for the wrong amount or have other issues that would make collection illegal.
Meanwhile, courts have been tasked with juggling crowded dockets that are filled to the brim with debt collection cases. These lawsuits were the most common civil case in the United States in 2013, the most recent year with available data. By that point, debt collection cases made up about a quarter of civil suits, according to the Pew Charitable Trusts.
For courts, the prospect of spending less time and resources on debt collection cases is an easy sell.
In 2018, Utah State Courts launched an online dispute resolution program for small claims cases in West Valley City Justice Court. The state later added two more justice courts to the program, which includes negotiations in debt collection cases totaling $11,000 or less.
West Valley City Justice Court Judge Brendan McCullagh said that since the program started, people have been more prepared to go to trial.
“They have more information about their cases ready and to be presented, so frankly, the issues become apparent much faster,” he said. “We’ve already separated the wheat from the chaff in terms of what needs to be seen on the calendar, and we can do the work.”
Last year, New Mexico Courts started an online negotiation program that initially focused on debt collection cases in several courts before expanding statewide last September.
“The hope is that the court can devote more resources to dealing with more complex cases if these types of cases can be resolved early and with minimal court staff involvement or judge time,” said Mateo Page, New Mexico’s statewide coordinator for the courts’ alternative dispute resolution program.
As in other states, New Mexico’s program has drawn criticism from consumer advocates, who argue it fails to address the dynamics of debt collection lawsuits.
“They’re saying it expands access to justice, but using technology for cases where there’s an inherent imbalance of power and a history of predatory practices exacerbates that imbalance and puts people at risk,” said New Mexico attorney and consumer advocate Karen Meyers. “It isn’t a solution. It’s a way of moving cases off of the docket.”
Does online dispute resolution work?
So far, there’s no standard to determine if an online negotiation program is actually doing the things it’s supposed to do. And comparing programs doesn’t work because they are all so different.
Big If True reviewed data from three programs to get an idea of how often they’re being used and if they’re leading to cases being resolved.
In Ohio, Franklin County Municipal Court was the first court in the United States to adopt online dispute resolution in 2016. The online element fit snugly into the court’s long-running mediation program.
The platform costs less than $10,000 per year, Sanchez said, and 75 to 80% of its 1,500 users have resolved their cases through the program since 2016.
Since 2018, the courts in Utah’s program had about 2,500 small claims cases that were served to defendants. More than half ended in default judgments, while 13%, or 332 cases in all, reached settlement agreements during or after online negotiations.
The New Mexico Legislature has allocated $550,000 toward the state’s online dispute resolution program, with $100,000 reserved for an expansion into traffic cases, courts spokesperson Barry Massey said in an email.
Over nine months ending in February, the program led to just 22 agreements out of 949 referrals to the program, according to state court data. That figure is out of at least 13,800 debt collection cases opened during that time.
Asked if the number of agreements is a sign of success or a problem, Page said: “The way I look at it … is that what we’re attempting to do is prove up the concept of (online dispute resolution), and I don’t want to look at it as a matter of, ‘Has it been a success or failure?’ I think it’s too early to characterize it as either.”
One of the hopes for the program was to reduce default judgments. However, the issue that causes default judgments – defendants not getting involved in their cases – is repeated during online negotiations.
In August, New Mexico’s courts are changing a rule that online negotiations can’t begin unless defendants file a response to the case in a document called an answer, District Court Judge Jane Levy said.
According to court data for the last half of 2019, answers were filed just 9% of the time, or in 1,250 cases.
Levy hopes getting rid of the answer requirement will make it easier for people to get involved with negotiating their cases online.
“We really need to have people participate in their case so that they don’t end up finding out or realizing that it really is going to be a problem when they start having their wages garnished,” she said.
In Ohio, Franklin County Municipal Court has a similar issue. Sanchez said only a small percentage of defendants file answers.
“The answer is the biggest barrier, hurdle, for cases being heard,” he said. “Without the answer being filed, the case can’t be assigned to a judge. It can’t get referred to mediation.”
Instead, those cases often end with default judgments.
New Mexico’s online dispute resolution program hit another snag. Some attorneys representing creditors don’t want to use it, Page and Levy said.
It turns out that judgments – the thing that court officials were hoping to reduce – are exactly what creditors want from the court. Without judgments, creditors can’t garnish a person’s wages or seize property to collect on a debt.
But judgments aren’t available through New Mexico’s online negotiation program, where the goal is to reach an agreement.
Page said some creditors believe people sued for debt will fail to make payments on their own even if they made agreements through the program. Skeptical attorneys told the courts that if they tried online negotiation, they’d have to return to court to seek a judgment later on anyway.
Of the cases referred to New Mexico’s program, plaintiffs – those suing to recover debts – started the offer process just 21% of the time.
When plaintiffs did make offers, defendants often didn’t engage from there. According to court data, just 34 defendants had responded to an offer as of February.
New Mexico courts are making changes aimed to improve participation. For instance, they’re adding a texting option and a policy to inform people about the program as soon as they’re served with a summons.
What online negotiation means for the public
These issues show how online dispute resolution programs echo the tensions already present in civil courts.
“If courts aren’t thinking about their existing processes as a starting point, then they do run the risk of replicating existing processes as they move online,” said Erika Rickard, a Pew Charitable Trusts project director focused on the civil legal system. “Courts have an opportunity to examine their existing processes and think about, from the users’ perspective, how those processes can be made more simple and more effective.”
Alex Kornya, litigation director for Iowa Legal Aid, isn’t convinced that online dispute resolution will lead to better outcomes for people representing themselves in court.
“Technology is not inherently good or bad,” he said. “It just amplifies the intentions and biases and systemic problems that already existed to a certain extent, which is why our opinion about this stuff is not that it shouldn’t happen, but rather that it needs to be designed with the right ideals in mind and it needs to be thoroughly and critically evaluated throughout the process.”
One of the biggest concerns is that some platforms don’t note specific defenses that may be available to those being sued, leading to criticism that people who can’t afford lawyers will be at a disadvantage compared to plaintiffs who do have attorneys.
“I think what courts are struggling with is the tradition and history of trying to be neutral and making sure they maintain neutrality, and … we might have gone a little far with that,” said Renee Danser, associate director of research and strategic partnerships for the Access to Justice Lab at Harvard Law School. “I think that courts err on the side of not providing information in order to maintain neutrality, rather than thinking critically about what neutrality looks like and what information continues that neutrality and what would be an overstep.”
At first, New Mexico’s platform didn’t include potential defenses against debt claims, but that was changed after feedback from consumer advocates, Levy said. The program now has prompts for defendants to answer, such as whether they actually owe the debt, if they’ve filed for bankruptcy and other factors that would mean the debt can’t be collected.
“There was some concern about that, that it would be sort of suggesting the answer or leaning on the side of the defendant, but really, it’s important to give people the resources to know (they) shouldn’t be collected on,” Levy said.
Kiran Sidhu, policy counsel for the Center for Responsible Lending, expressed concerns that the programs are difficult to access for those without English proficiency and internet access.
According to the Federal Communications Commission, more than 21 million Americans didn’t have internet access in 2017.
That access also varies by race. White people are more likely than Black and Hispanic people to own a computer and have broadband access, according to a Pew Research Center survey. About a quarter of Hispanic and Black Americans lack broadband and rely on smartphones for the internet.
Another Pew survey from last year found that in households earning $30,000 or less a year, almost half don’t have computers and 44% don’t have broadband.
“There’s a huge digital divide that separates Black and brown communities and white communities, and so if people don’t have full access to a computer or if … they don’t have a tablet or smartphone, then they’re necessarily going to be locked out of this as a potential viable solution,” Sidhu said.
During debt collection cases, unrepresented defendants and attorneys for creditors often are alone during “hallway talks,” conversations outside the courtroom where they attempt to resolve the matter in a few minutes.
These unsupervised conversations can lead to predatory behavior that puts consumers at a disadvantage. April Kuehnhoff, staff attorney for the National Consumer Law Center, worries that could carry over into online dispute resolution.
While the programs discussed in this story have a neutral third-party to guide users through the process and potentially prevent abuse of the system, that’s not universal.
Kuehnhoff said: “If all that we’re building is a platform where the two parties are told to kind of go and sort it out, then essentially we’re creating virtual versions of hallway negotiations, with all of the same potential for abuse and deception by sophisticated key players against unrepresented parties.”
Contact Big If True editor Mollie Bryant at 405-990-0988 or bryant@bigiftrue.org. Follow her on Twitter.
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