Editor's blog | Tomorrow's small claims courts will be online

Modria can boast star pedigree too. Between them, its founders and senior executives set up the online dispute resolution platforms of eBay and Paypal, several are trained mediators, all have experience in the tech industry, and they have seed investment from venture capitalists such as Foundry Group and Palo Alto-based Advanced Technology Ventures.

This week the company set foot in the UK, having enlisted the support of former solicitor Graham Ross about a year ago to head up its European operations. As a lawyer Ross specialised in personal injury and product liability - he led the group action by HIV-infected haemophiliacs against the government. And you are likely to be using every day one of his most well-known creations so far, online law reporting service Lawtel, which he co-founded with barrister Gerald Impey in 1980 and is an early example of technological disruption in the sector.

Modria’s big idea is to take eBay’s online dispute resolution model to the general public and make it available to private organisations and public bodies to resolve customer disputes. In this current set-up, it means consumers will only have access to it if the entity they are in dispute with has signed up to the system.

Taking lawyers out of the dispute resolution process may sound misguided but it is likely to have the ear of lawyers in high places. Richard Susskind has long been a proponent of online dispute resolution schemes. In March, the Lord Chief Justice’s IT adviser berated the Civil Justice Council for “failing to even look” into the potential of ODR. And only last month Lord Neuberger said in a speech at the Institute of Government that the courts “may have something to learn from online dispute resolution on eBay and elsewhere”.

And soon we could see ODR schemes take off in Britain. In March, the European Union adopted Regulation 524/2013, which makes it compulsory for all online retailers to offer access to an ODR scheme by the end of 2015, together with Directive 2013/11, which requires all EU member states to implement the new rules by July 2015. In addition, each member state will have to appoint an official national ‘ODR contact point’, which will be connected to its counterparts across Europe via a ‘network of ODR contact points’.

Modria must be hoping to get a headstart as tech companies around Europe rush to be in a position to bid for contracts with national authorities. It is about to pilot its first court project in the Netherlands, focusing on neighbour disputes. Paradoxically, the virtual project also involves a real-life ‘travelling’ judge.

The access to justice gap, which opened when the first cuts to legal aid 15 years ago led to fears of legal aid deserts, could be closing a little bit as a result of ODR schemes. Tomorrow’s people’s courts could well be online, and not even involve courts at all. Modria – and others which will no doubt seek to follow in its furrow – is just the sort of platform that could help legal advice centres and citizens advice bureaux struggling to respond to demand for their services.

Combine this with the rise in self-help law resources, such as Quora-style LawPivot, cheap legal templates for every day contracts, such as those offered by MyLawyer, and unbundling, and the way legal services are delivered could be very different. Will lawyers lose some business as a result? My guess is that this would be marginal: low-value disputes don’t usually – though I accept not always – develop into court battles involving lawyers. The Dutch neighbour dispute trial should provide some useful early indicators. It seems suited to resolve minor claims such as noise or high trees, which are usually not handled by law firms. High-value cases, on the other hand, such as boundary disputes, are more likely to still require legal skills, even if the parties engage into mediation. This would leave lawyers to deal with cases where their expertise is genuinely required, and charge for it accordingly.