ODR platform that inspired UK digital court project bought by US tech giant

Modria, one of the main two online dispute resolution companies behind the now defunct Rechtwijzer project, has been taken over by US tech giant Tyler Technologies. The company has been regularly mentioned in connection with the UK’s plans for digital courts, and while its acquisition should have no direct impact on the project, it nonetheless raises a question mark over the practical development and cost of online courts in this country.

Rechtwijzer was set up under the aegis of the Dutch legal aid board in 2007 to provide an online mediation alternative to court-based small claims and divorce proceedings. A few years later, this option was opened to fee-paying clients.

Earlier this spring, however, the Rechtwijzer project lost momentum after the Dutch legal aid board announced it was pulling the plug amid concerns over its financial viability. It is understood that the flow of cases going through the system was too low to make it worthwhile, and a new model is apparently being developed that will focus solely on divorce.

Much of the current thinking behind Britain’s online courts, due to be trialled this autumn, has been inspired by the technology developed for Rechtwijzer by Modria and the Hague Institute for the Internationalisation of Law, a not-for-profit organisation developing access to justice solutions.

Modria was set up in 2011 by Colin Rule, former head of dispute resolution at eBay and PayPal, and Chittu Nagarajan, who worked with him as head of community court initiatives. The ‘resolution centre’ they set up at the online auction site still handles 60 million disputes every year.

Two years later, in 2013, the start-up set foot in Europe, with Graham Ross, a co-founder of Lawtel – the first English online-only law reporting services – and an ODR pioneer, appointed as Modria’s regional vice president.

The company’s arrival on the continent coincided with EU proposals to make it compulsory for all online retailers to provide access to an ODR scheme. The rules were later adopted as Regulation 524/2013 and Directive 2013/11, which are now in force, and have contributed to the impetus behind online court solutions.

The following year, Ross was appointed as a member of the Civil Justice Council ODR advisory group. The group, chaired by Richard Susskind, was set up in April 2014 to ‘explore the role that ODR can play in resolving civil disputes’.

The group hasn’t formally met since the publication of its report in February 2015 recommending the setting up of an online court pilot for low-value claims, but a spokesperson for the judiciary has confirmed that it is still active.

Solicitors Journal understands that HMCTS has separately set up its own focus group, but no information has come out of it yet. The Ministry of Justice has been unable to confirm whether the focus group exists at all. It has also declined to comment on the Modria acquisition, because, it says, there is currently no contract with the company.

Neither is it likely that there will be any forthcoming contract with Modria or any other private contractor. The government has pledged to invest £1bn in a court modernisation programme, including digital courts, but the plan appears to be for HMCTS to develop an ODR platform on its own with no involvement from the commercial sector.

On the judiciary’s side, the only development since the demise of Rechtwijzer has been the setting up of a legal hackathon organised on behalf of the judiciary, which has come with promises of coffee, Red Bull, and pizzas.

Modria only has two clients in Europe: the Centre for Effective Dispute Resolution (CEDR), the largest mediation organisation in the UK, which runs its online dispute capability on a Modria platform, and the newly launched Ombudsman du commerce, in Belgium, which provides online mediation for consumer disputes.

Tyler Technologies has been involved in several projects in Europe since the early 2000s – although they didn’t tell us which ones specifically. Modria, they say, will help them expand in the region.

This is the dilemma for the MoJ and the courts service. Having, as a matter of policy, decided not to engage with the private sector, the government risks losing out on valuable experience. So while tech companies are forging ahead with large-scale ODR technologies and investing billions of dollars in ever more sophisticated systems, it looks like UK courts will have to make do with an untested system built from scratch and developed behind closed doors. Unless a bunch of bleary-eyed, pizza-powered hackers come up with a genius solution for the cost of a few energy drink cans. You never know.

Jean-Yves Gilg is editor-in-chief of Solicitors Journal

jean-yves.gilg@solicitorsjournal.co.uk | @jeanyvesgilg