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Online dispute resolution could unlock £3.4bn a year

By Michael Cross >>

(6 June 2022)

An investment of £3.5 million could create the first stage of an online civil court which could resolve 200,000 business disputes over five years, releasing £3.4bn in disputed money  – and be self funding within three years, according to a government-backed report. The figures come from a feasibility study and proof of concept for an online dispute resolution system for small and medium sized businesses (SMEs), published by the LawtechUK initiative. 

If realised, the platform would play a central role in the integrated civil justice system with an online front end proposed by the master of the rolls, Sir Geoffrey Vos. This is to create an ecosystem of online dispute resolution systems, including the Official Injury Claim portal for RTA matters, as the point of entry to the civil courts system. 

The online dispute system is one of the main outputs of the first phase of LawtechUK, which concluded at the end of March. Uncertainty now surrounds the programme, in part because of the resignation of the responsible minister, Lord Wolfson (David Wolfson QC) in April. No announcement about his successor – or further funding for LawtechUK – has been made. 

LawtechUK’s proposal is to create an open-source generic dispute resolution platform which could be offered under the badge of trade associations or as part of commercial software providers. The initial concept, drawn up by academics Dr Mimi Zou and Professor Tom Melham of Oxford University, is aimed specifically at disputed payments involving SMEs.

The online platform will lead parties through three dispute resolution tiers: 

  • Advice and triage. This will be free, anonymous and designed to encourage browsing visitors to stay in the process. It could be offered under the brand of organisations such as trade associations, with sector-specific advice.
  • Facilitated negotiation. This private stage, involving both parties, will secure the agreed facts and narrow down the points of disagreement, for a flat fee of £49 payable on successful settlement. The platform must record the facts and allow parties to make an offer to the other party. Settlements will be enforceable.
  • An ADR marketplace. This will direct the parties to mediation and/or adjudication providers. The process will have a predictable cost and time and a clear, enforceable, outcome. The fee will be based on the amount of the claim. 

If the parties fail to agree, the system would create a ‘data bundle’ formatted to be handled by HM Courts & Tribunals Service in the county or High Court. 

Jenifer Swallow, the outgoing head of LawtechUK, told the Gazette that the concept is ready for adoption by the private sector. ‘Anybody can take it on and build it,’ she said.  A first feature complete version of the platform could be brought to market in nine months, the feasibility study estimates.

(Courtesy: The Law Society Gazette)