Professor David Allen Larson on Designing a State Court Small Claims ODR System in New York

Professor David Allen Larson

 

Abstract

I was super excited to welcome David Allen Larson, a Professor of Law at the Mitchell Hamline School of Law and Senior Fellow at the Dispute Resolution Institute. He is currently the Chair of the American Bar Association Section of Dispute Resolution, Co-Chair of the Section’s ODR Standards Task Force, and was a member of the ABA E-Commerce and ADR Task Force.

He has been involved with Online Dispute Resolution (ODR) since 1999 and is the System Designer helping create an ODR platform for the New York State Unified Court System. David is the John H. Faricy Jr. Chair for Empirical Studies and a Fellow for the National Center for Technology and Dispute Resolution and the American Bar Foundation. He has 60 legal publications and has made more than 170 professional presentations in ten different countries.

Professor Larson worked at the Equal Employment Opportunity Commission Office of General Counsel, Appellate Division in Washington, D.C. and, on behalf of that Office, participated in drafting the Regulations and Interpretive Guidance for the Americans with Disabilities Act. He was founder and Editor-in-Chief of the “Journal of Alternative Dispute Resolution in Employment” (CCH Inc.), an arbitrator for the Omaha Tribe and other disputes, and a Hearing Examiner for the Nebraska Equal Opportunity Commission. He worked with the International Legal Resource Center (a partnership between the ABA Section of International Law and the United Nations Development Programme) and the ABA Central and East European Law Initiative (CEELI). He teaches Arbitration Law, Arbitration Skills, Disability Law, Employment Law, Employment Discrimination Law,  Labor Law, Torts and Online Dispute Resolution (ODR) for the 21st Century. David has been a tenured professor at four different universities and colleges and practised with a litigation law firm.

In this episode, we scrutinised the following questions:

1) What is the story so far with the small claims cases via the ODR  New York platform?

2) In your article, ‘Designing a State Court Small Claims ODR System: Hitting a moving target in New York during a Pandemic’- you mentioned ‘parties auto-populated stipulation of settlement.’ The term is relatively new. What does it mean?

3) What prompted the Credit Debt Collection ODR Platform, and how does it work?

4) What are the obstacles encountered during the formation of this Project?

5)  What is your advice for people who want to pursue a career in ADR?

 

INTRODUCTION

In 2016 David Larson began to help the New York State Unified Court System design a pilot online dispute resolution (“ODR”). Eventually, the New York State Civil Court Small Claims ODR platform went live on January 29, 2021. However, establishing the ODR scheme took more than four years.

According to David, the journey took so long because their’ target kept moving.’ In his own words, “after completing a detailed credit card debt collection ODR platform, they had to change direction before implementation and focus instead on small claims cases. Then like the rest of the world, we suddenly had to deal with the COVID-19 pandemic.”

This essay intends to outline how far the New York ODR scheme has gone since its establishment and get a first-hand view/experience from an established ADR Practitioner /Academia who helped establish the scheme-David Larson. It aims to enlighten people on the existence of the ODR platform in New York and encourage more people to use it, especially during this Covid-19 pandemic era bearing in mind its many benefits like decongesting the dockets of the courts and cost-effectiveness, amongst others.

 

What is the story so far with the small claims cases via the ODR  New York platform?

David pointed out that he started working with the ODR New York platform in October 2016. They were primarily focused on credit card and debit collection because in New York, either the parties are evading service or are not showing up in Court like which means that most people were not participating in the Justice system. Thus this prompted the creation of small claims online to increase debt collection in the Justice System, including creating/enhancing access to justice. It is imperative to point out that the ODR system has a jurisdictional limit of $10,000 or less like the in-person New York City Small Claims Court. Because it is a pilot project, the ODR System initially will accept no more than one hundred cases per month. Although the System presently is capped at 100 cases, the Court is exploring an expansion into the 7th Judicial District in the Rochester area. We only get 100 cases per month- we spent much time thinking about the concerns of the unrepresented people online and Internet, so we have a series of screening questions to help with that.


In your article, ‘Designing a State Court Small Claims ODR System: Hitting a moving target in New York during a Pandemic’- you mentioned ‘parties auto-populated stipulation of settlement.’ The term is relatively new. What does it mean?
The ODR System has an initial detailed intake and registration stage that includes screening questions that automatically disqualify cases based on the parties’ assessment of their ability to proceed online. This initial stage comprises two short mandatory animated educational videos explaining small claims cases and ODR. If a case is determined eligible for ODR, the parties participate in no more than three rounds of blind bidding. Claimants have up to three opportunities to enter the dollar amount they would like to be paid and a lower amount they would be willing to accept. Defendants also have up to three options to submit the amount they would like to pay and the higher amount they would be willing to pay. If a Claimant’s and a Defendant’s bids overlap, the ODR system divides the overlap and reveals the settlement amount. Once the settlement amount is determined, the parties engage in a structured negotiation process to establish payment terms. The defendant can propose the payment method (check, credit card, or payment app), the number of payments, the first payment date, and the frequency of those payments. The defendant can also propose the consequences if the defendant fails to make the scheduled payments. The Claimant will enter an Affidavit Upon Default with the Civil Court for the default option the defendant selects. Those options are judgment in the total amount initially sued for without further notice to the defendant, less any payments made, together with interest and disbursements; decision in the settlement amount without details, less any payments made, together with interest and disbursements; or place the case on the calendar for trial. If the Claimant agrees to the defendant’s proposed terms, the ODR System auto-populates a settlement agreement that the parties can review and sign. If the Claimant does not agree to one or more proposed terms, the Claimant can make a counterproposal. If the Claimant wants to communicate directly with the defendant, the parties can use a Conversation tab to exchange text-based proposals. If the parties still cannot agree on the terms, then either party can request a mediator. If a party believes mediation would not be productive, that party can request a return to the court system to wait for a hearing date. If the parties agree to all the terms, but a party subsequently reconsiders and refuses to sign the auto-populated Stipulation of Settlement, then either party can request mediation. Whenever mediation is asked for, both parties are required to consent expressly. Hyperlinks are offered to resources that provide information regarding legal services’ availability and explain what happens during mediation.
What prompted the Credit Debt Collection ODR Platform, and how does it work?

It is fair to say that Credit card debt collection practices have a troubling history. In most cases, consumers targeted by those practices either have default judgments entered against them or sign settlement agreements that may be very difficult to satisfy. Although legal service providers offer valuable assistance, they do not have the resources or personnel to assist each of the thousands of consumers being sued by credit card debt collectors.

The New York pilot project, rather than experimenting with ODR to determine whether it could improve access to justice for unrepresented litigants in relatively straightforward cases, the New York court system decided that its ODR system should focus exclusively on credit card debt collection cases. I learned at my first meeting in October 2016 that credit card debt collection was going to be the case type for the ODR system. I expressed concern that the subject matter was too regulated, complicated, and inappropriate for a pilot ODR project. The New York staff explained that consumer debt was chosen because of the significant numbers of unrepresented litigants in these case types who do not have access to legal representation. The New York court system was not mistaken in recognising that the credit card debt collection process in New York is deeply flawed. When debt holders sue consumers, counsel represents only four per cent of consumer defendants. Consumer defendants frequently do not file answers in debt collection lawsuits for various reasons. Although New York recognises that there is a problem with some process servers who never actually serve defendants (“sewer service”) and does have a two-step process wherein the Court mails out a second notice to the defendant, individuals still may not receive that second notice or may not have the time or resources to leave their employment or home and travel for a court hearing. Debt collectors regularly obtain default judgments, allowing debt holders to attach wages, seize property, and seriously damage consumers’ credit histories.

Essentially, we set up an expert system stage where consumers can work through or try to educate them a little bit – we have videos talking about what small claims does. It is pertinent to point out that the ODR pilot project would determine whether default rates could be reduced and consumers’ access to justice could be increased via an online dispute resolution system. Clearly, this is an admirable goal, but it created substantial regulatory compliance challenges and unanticipated resistance. Because credit card debt collection is so heavily regulated, I suggested that New York focus on small claims cases at that first meeting in October 2016. But the court system wanted to address the real consumer debtor access to justice problem.

What are the obstacles encountered during the formation of this Project?

One obvious obstacle was funding and educating everyone involved, such as people who do not like technology.

What is your advice for people who want to pursue a career in ADR?

In the United States, if you are coming out of school from the academic programme and would like to pursue a career in ADR. It is not easy because people select their neutral. Generally, they will be uncomfortable selecting candidates who have no experience. However, another way you can get a chance to pursue a career in ADR is that most cities in the United States tend to have more than one mediation centre. They are more than happy to have you because they need people, which is an excellent way of gaining experience.

 

CONCLUSION

This essay has discussed the story so far with the small claims via the ODR  New York platform. It has provided a comprehensive definition of parties auto-populated stipulation of settlement. Additionally, it reviewed in detail what prompted the Credit Debt Collection ODR Platform and its function while at the same time examining the obstacles encountered during the formation of this Project. Thus, the blogger hopes potential users and would-be users will take on board the many benefits mentioned herein and opt for ADR, particularly ODR, in the case of any arising dispute or conflicts in future.

Click here to listen to the full version of Episode 19 of EVA.

REFERENCES

David Allen Larson, Designing a State Court Small Claims ODR System: Hitting a Moving Target in New York During a Pandemic. (2021) 22 Cardozo J. Conflict Resol. 569

David Allen Larson, Designing and Implementing a State Court ODR System: From Disappointment to Celebration. 2019 J. Disp. Resol. (2019)

Chinwe Egbunike-Umegbolu,  Episode 19: Professor David Allen Larson on Designing a State Court Small Claims ODR System in New York. Anchor. fm (2021)

 

 

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2 thoughts on “Professor David Allen Larson on Designing a State Court Small Claims ODR System in New York

  1. This is interesting; I love it. Quite educating, primarily his advice for people who want to pursue a career in ADR.

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