Online Alternative to Small Claims Court (in the wake of coronavirus)


The world is changing for a few months as the practice of “social distancing” permeates our daily lives. We’re currently in the first phase, still reeling from the initial shock of working from home and the closing of schools, stores, and restaurants. It will probably be another week or two before this new reality actually sets in. But over time, we’ll have to figure out how best to continue with our lives and handle all of our pressing matters.

One of the areas that we probably aren’t thinking about now but may be in a few weeks is any pending legal matter. Many courts around the country are delaying their cases or temporarily closing. We feel this trend will continue over at least the next two to three months. And only the most important types of cases will be heard. The limited available resources will be used for high impact, time sensitive cases such as criminal felonies and bond hearings. Small claims court cases will take a back seat, if they are even heard at all.

Online arbitration can be helpful at a time like this, especially for people who can’t afford a long delay in their case of don’t want to go to court in person. Everything that’s done in court can easily be replicated in the comfort of your home – evidence can be uploaded to a website and hearings can take place over video chat or phone calls. If you haven’t been through small claims court yet, you probably don’t understand how painful the process can be. It often takes months to get your case heard and you’ll usually have to take off at least a half day of work. A completely online solution has significant advantages over this process.

Though it is arguably a better experience for many people, online arbitration has two drawbacks that have limited it’s widespread adoption as an alternative for small claims court. First, it costs money. Instead of just paying the filing fees for small claims court, online arbitration is provided by private companies that need to charge for the service (and the Arbitrator’s time).

The other drawback is that both sides need to agree to arbitrate and forego their right to be heard in court. Unless there is an arbitration clause in their contract, one side can’t force the other side to use arbitration. So even though many people may prefer to use an online service, it’s often difficult to convince the other side to go along with it.

In this new “social distancing” environment, however, we may find that more people are open to having their dispute resolved through online arbitration. Moving disputes to a private, online service can help lessen the burden on the courts, speed up resolution, and keep people safer. As long as both sides trust the impartiality of the service and are willing to pay a little more to have their dispute resolved in this way, many people can benefit from this more modern resolution experience.

It remains to be seen how quickly the new coronavirus (COVID-19) spreads and how long it alters our daily lives. But it’s clear that the courts will be significantly impacted. As people look for an alternative to appearing in-person in small claims court, they should consider online arbitration. It’s just another in a long line of services we may start using so we can carry on with our lives in the comfort of our home.