A 'Small Claims Court' For the Internet 116
angry tapir writes "It's not unusual for a freelance Web designer or developer to be burnt when a client refuses to pay up, citing one excuse or another. And what can you do about it? If a contract only amounts to a few thousand dollars, litigation to recover your fee can be far too expensive, and an increasingly vituperative exchange of emails is often not enough for client and contractor to come to agreement over who owes whom what. Into this gap steps judge.me: A start-up founded by Peter-Jan Celis that aims to provide internet-based, legally binding arbitration services — a 'small claims court' for the internet — with a particular eye on settling the conflicts that arise over freelance development and Web design."
whats wrong with the real small claims court? (Score:5, Interesting)
as per title, if theres a contract in play and a "small" mount of money whats wrong with the real small claims court?
Small Claims has many faults. Big claims has more. (Score:5, Interesting)
Real small claims court doesn't spend much time on investigating claims. To clear cases quickly the judge quickly weighs up sides and makes a snap decision. Under the adversarial system of justice its not about finding the truth, but about who deciding presents the best arguments. That's easier for the judge, but it shouldn't be confused with justice. In some jurisdictions you can't appeal or even be told the reasons. The judge makes a mistake (they are human so it happens) you won't even know.
Small claims court weren't created because they are better than the bigger courts, but as a way of offering the little people cheaper although less reliable justice. The bigger courts are worse though since they are extremely expensive charging rates that cannot be justified. Whoever has the most money to fund the most appeals and buy the better lawyers wins.
Arbitration is in theory a great idea, but a big problem is that the arbitration system is taken over by judges and lawyers charging the same rates. It's sold as a cheaper alternative, but it has many traps. One problem is a big company who nominates an arbitration company (yes, they are companies) will pick one that gives them favorable results or they won't get repeat business. I loved Erin Brockovich the movie, but the arbitration system they used has been severely critcized by some of their clients. If you loved the movie then don't read this:
http://www.salon.com/2000/04/14/sharp/ [salon.com]
http://abcnews.go.com/Business/story?id=8169252&page=1#.T875jlK6SSo [go.com]
http://www.givemebackmyrights.com/bma-faq.htm [givemebackmyrights.com]
http://www.businessweek.com/news/2012-05-21/consumers-may-see-new-limits-on-mandatory-arbitration [businessweek.com]
http://www.homeloanbasics.com/articles/FirstTimeHomeBuyers/MandatoryArbitrationClausesStripHomebuyersofSuitableRecourse [homeloanbasics.com]
http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=103x301912 [democratic...ground.com]
http://www.independent.ie/business/irish/website-aims-to-boost-50m-arbitration-industry-2351246.html [independent.ie]
The justice system badly needs reform, but you have many politicians and lawyers doing very well out of the current system who won't give it up.
Re:whats wrong with the real small claims court? (Score:5, Interesting)
From one A.C. to another: thank you for your amazingly great advice. I'm going to shoot myself now, since you have shown that we are all mistaken. Also, please, set up a website called experiencedcontractor.com so that other people realise that they are doing everything wrong.
If you think you fully understand the risks, then you don't know anything. You never fully understand the risks. You can, however, try, fail, and try again and again until you learn.
Here's why I'm going to kill myself:
a) I don't know most of my clients. Most of the times I don't even see them. Not even once. I don't know who they are or where they live.
b) I can't afford an accountant. Not when you deal with low-budget projects. If I could afford an accountant, I would be able to afford a lawyer.
c) It doesn't matter how much you agree. It's written on emails. Emails cannot enforce the law.
d) I'm not going to learn the law of 7 different countries to deal with 7 different clients. The law is vast and contradictory. It's often written in the local language. It would be difficult to learn the French law if you don't speak French, or the Polish law if you don't speak Polish.
e) I'm not going to learn 7 different languages to threaten 7 different clients.
f) I can't make sure of most things. As I don't see the counterpart, I can't really know who they are, where they work, or whether they can pay.
The only thing I am doing is 3 (till the first period). But that won't save my soul from burning in hell, will it?
My rules of thumb (so far, I've always been paid, even though some times I had to fight it a little):
1) Use an intermediate party that, for a small percentage, checks the payment record of your client, offers escrow, milestone handling, keeps records of the messages you send/get from the client, and can make a sensible decision if your client ignores you forever.
2) Most people pay if they paid others before. If your client has a good payment record, set up bigger milestones, request a smaller escrow. If your client has no record, set up very small milestones so that you know, right from the beginning, that they can pay. I've broken up projects into milestones so ridiculously tiny that you wouldn't believe. And yet, the clients were comfortable with that because they knew they would be able to review the project from the very beginning, and that they weren't sacrificing much. Avoid clients with many bad reviews or who do not pay.
In my experience, most people pay promptly. Some take some time to review the projects carefully. Others take a long time. But when you let them know that you did the work, that it really works as expected, and that you are a freelancer, not Accenture. I even had one that paid me beforehand just because he didn't want to keep me waiting until he could review the whole thing. I didn't ask for this. I never met the guy.
People are nicer than we often think. Setting up lots of systems to help you get paid and resolve potential conflicts, at the expense of easier communication and a fluid work-flow with the client, can lead to a self-proving prophecy.