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With online dispute resolution, parties state their case by e-mail and get a prompt decision
This article was first published by the Maryland Daily Record


Monty Ahalt believes that most civil cases can be resolved without the parties ever being in the same room or even on the same phone call.

The retired Prince George’s County Circuit Court judge runs VirtualCourthouse.com, a Web site that allows parties to work out their differences online with an arbitrator or mediator. He estimates that about 70 percent of civil cases can be resolved this way, in less time and at a lower cost than traditional litigation.

“That’s a process that takes probably three to four years from the time that dispute first started until it’s concluded, involving many, many man hours, a lot of expense, a lot of time and a lot of repetition, mainly paper repetition,” Ahalt said. “In a vast majority of those disputes, the results are fairly predictable, but the parties don’t realize that.”

Virtual Courthouse is part of a movement toward online dispute resolution, or ODR, of basic alternative dispute resolution cases. The trend includes sites like Cybersettle.com, where a computer, not a person, determines the value of the case, and eBay’s in-house ODR system.

Many lawyers and ADR professionals are enthusiastic about ODR, but some say its utility is limited. Others question whether disputes may be settled fairly without the arbitrator or mediator - the “neutral,” in Virtual Courthouse parlance - seeing the parties.

A new model

Ahalt, 65, began developing Virtual Courthouse in 2001, two years after taking early retirement from the circuit court. He had some experience in Internet business, having helped develop an electronic filing system called JusticeLink that eventually merged with another company and was bought by Lexis-Nexis.

That experience, combined with his time on the bench, including a stint as manager of the civil docket, led him to create Virtual Courthouse. In 2004, after a few years of development, Virtual Courthouse went live.

In the past four years, the site has handled about 1,000 cases - 80 percent of them from Maryland and another 10 percent from the District of Columbia, Ahalt said. Virginia, Delaware and other mid-Atlantic states account for most of the rest.

At first, Ahalt did most of the dispute resolutions himself. Now he is a neutral in less than 20 percent, with his goal to handle only 5 percent of cases.

The ideal case for Virtual Courthouse has only two parties, involves a dispute over money (as opposed to other forms of relief) and is not emotionally charged, he said. Fender-bender lawsuits fit the bill; custody cases and nasty disputes between neighbors do not.

A plaintiff starts the process by registering with Virtual Courthouse, which e-mails the defendant to see if he or she will agree to ODR. If so, the parties pick a neutral from Virtual Courthouse’s list of more than 100 in Maryland and 12 other jurisdictions.

Ahalt lets neutrals list themselves in Virtual Courthouse’s directory for free and doesn’t qualify them in any way; when the parties sign on to use the site, they take responsibility for checking out their neutral, he said.

After choosing a neutral, each party types in a statement of the case and uploads scanned images of any necessary documents, such as doctor’s bills. The neutral then decides what the case is worth.

The process usually takes less than 45 days and Virtual Courthouse’s record for the fastest case resolution is a blistering 15 minutes from start to finish. But that doesn’t mean the neutrals are making slipshod decisions, Ahalt said.

“How long does it take to read that an individual suffered a soft tissue injury in a rear-end automobile accident and went to a chiropractor 15 times and incurred bills of $2,600?” Ahalt asked. “How long does it take a neutral to read that? I mean, there’s no dispute as to who’s responsible. It’s just an issue of how much is reasonable compensation for this individual.”

Time and money

Plaintiff’s lawyer Rick Jaklitsch of the Jaklitsch Law Group in Upper Marlboro said he has used Virtual Courthouse to settle 20 cases. Although his clients tend to get slightly lower awards through Virtual Courthouse than they would if they went to Prince George’s County District Court, they get their money a lot sooner, he said.

Defense lawyer Karen Sussman of Sussman & Simcox Chartered in Gaithersburg, who has participated in Virtual Courthouse as both a neutral and an attorney, said her clients are happy with her when she is able to resolve their cases quickly online.

Virtual Courthouse “probably wouldn’t be recommended for cases with huge stumbling blocks and issues that are time consuming, but it’s a great place for parties to present their arguments when they feel like they want to get something in front of somebody but they don’t want [the] delay and the expense of getting it resolved,” Sussman said. “Even a district court case these days can take months.”

She said her clients like not having to testify and are happy to save money by not paying her to go into court several times.

For online arbitration and mediation decisions and for simple online case evaluations, Virtual Courthouse charges each party a filing fee of $50 and the arbitrator or mediator charges the parties $300 total. Out of that $300, the neutral keeps $250 and pays Virtual Courthouse a $50 administrative fee.

Lawyers can also elect to start online but have an actual hearing in person. About one-quarter of the cases that go through Virtual Courthouse end in a flesh-and-blood mediation or arbitration, Ahalt said.

For more complicated online case evaluations and all face-to-face ADR, the neutral sets the rate. Even in those cases, however, Virtual Courthouse handles the neutral’s billing. Neutrals tend to like that idea, as well as the idea of having all of the case documents online, Ahalt said.

Ahalt said that he won’t rule out someday eliminating the $300 flat fee for completely online cases; he said he may end up having neutrals charge based on how much time a case takes.

As for the attorneys, Jaklitsch said he charges his clients the same 40 percent of the award to settle their case via online arbitration as he does if the case is resolved by in-person arbitration.

Other considerations

Paul Bekman of Salsbury, Clements, Bekman, Marder & Adkins LLC, who handles injury cases for the plaintiff’s side, offered qualified praise for Ahalt and Virtual Courthouse.

“I think that he provides a very valuable service for a particular type of case,” said Bekman, who also does ADR work. “If you were to look at the dockets, there are a lot of cases dealing with … property damage, for example, in … automobile collision cases. What he’s done is he’s been able to create a way to get those cases resolved without clogging up the docket.”

Bekman said Ahalt came to the firm to speak about the benefits of Virtual Courthouse, but that it just was not a fit for the catastrophic injury cases that make up much of the firm’s business.

He said ODR makes sense for a case involving, for example, a car accident resulting in soft-tissue injuries and $3,000 in medical expenses. It would not be helpful, though, in a case where a speeding truck driver hits and impales a motorcyclist, killing him and leaving his wife a widow and his children fatherless.

“This is their life, this was the life of a loved one, and the stakes are high,” Bekman said.

Jaklitsch said deciding which cases to send to Virtual Courthouse is similar to deciding which cases to resolve through face-to-face ADR.

“There’s always a challenge to not settle the home-run case,” Jaklitsch said. Virtual Courthouse, like any arbitration or mediation, is “not the place to be if you’re looking to hit a home run.”

Jaklitsch raised another potential problem with ODR: insurance companies may be resistant. Though he has resolved around 20 cases through Virtual Courthouse, he has initiated about 50. In 30 of them, the insurance companies’ lawyers have declined to participate, instead taking the case to court.

“There is a limited number of carriers on the other side that are agreeing to do this,” Jaklitsch said.

He said insurers should embrace the concept, especially since
Virtual Courthouse’s awards tend to be slightly lower than the district court’s.

Andrew Greenspan, Maryland in-house counsel for Nationwide, said he has heard of Virtual Courthouse but never has used it.

“I’m not sure what the advantage would be other than saving on travel time,” Greenspan said. “Most arbitrators, and myself, prefer the advantage of everyone being present at a location to see and hear the individuals involved. You can refer them to the documents.”

Making it more personal

University of Maryland School of Law professor Roger C. Wolf, director of the school’s Center for Dispute Resolution, said the neutral’s inability to interact personally with the parties is a common criticism of ODR.

“The downside is that the parties aren’t face-to-face and particularly in mediation, one of the real goals is to try and get the people talking to each other and, in many cases, trying to establish some kind of social discourse,” Wolf said.

So much of communication is nonverbal, he said, “and that’s one of the things that a mediator picks up on; so if you’re not able to see the parties involved in mediation, you’re missing a great deal of information.”

Ahalt said face-to-face contact isn’t all it’s cracked up to be.

“The response is, there are certainly many cases where it is helpful for a neutral to see a witness or to see a party,” Ahalt said. “Having said that, there are more cases where it is not helpful.”

He said that minor injuries are generally not visible to a judge, jury or arbitrator, so it doesn’t matter if the decision-maker sees the victim or not. As an example, he cited a recent contractual dispute he resolved through Virtual Courthouse.

“It’s a document case,” Ahalt said. “I needed to look at the documents, read the contract, hear the parties’ arguments, which they could all do in written form, probably better in written form than they do it in oral form. It wouldn’t have helped me in any fashion to see the parties in that case, although you’re correct; many people perceive that it is.”

Also, there are ways to overcome the impersonal nature of ODR, Jaklitsch said. For example, when he has particularly sympathetic victims in a Virtual Courthouse case, he has the clients swear to affidavits explaining how their injuries have affected their lives.

And Ahalt said that although it is not common, Virtual Courthouse can handle video and audio so lawyers can upload footage of clients or witnesses.

Besides, as retired Baltimore City Circuit Court Judge Edward J. Angeletti pointed out, if a simple case unexpectedly turns not-so-simple, the parties are not locked into an online-only resolution.

“If there were a necessity to sit down face-to-face, I would request that the parties do that and if the parties felt it was necessary, they would request it,” said Angeletti, one of the neutrals on Virtual Courthouse.

Comfortable with change

Ahalt attributed some of the uneasiness about Virtual Courthouse and ODR generally to the legal profession’s resistance to change. He said he has traveled around the country speaking to lawyers and judges about the value of resolving cases online.

“The typical reaction is, they look at you and say, ‘Well, yeah, I think that’s the way it’s going to be in the future, but I’m not changing now,’ because change is not a friendly matter for anybody,” he said.

Angeletti said he is beginning to sense that lawyers are starting to get more comfortable with the ODR concept, in no small part because most of Virtual Courthouse’s neutrals are people they already know, at least by reputation.

Ahalt, who marketed his service to neutrals and lawyers alike through the network of contacts he amassed from decades as a member of the bar and 17 years on the bench, is banking on that sort of attitude.

The potential market for Virtual Courthouse, he has determined, is virtually limitless.

“If you go through any method of calculating the number of disputes, it’s millions upon billions, so the market is enormous,” he said

The retired Prince George’s County Circuit Court judge runs VirtualCourthouse.com, a Web site that allows parties to work out their differences online with an arbitrator or mediator. He estimates that about 70 percent of civil cases can be resolved this way, in less time and at a lower cost than traditional litigation.

“That’s a process that takes probably three to four years from the time that dispute first started until it’s concluded, involving many, many man hours, a lot of expense, a lot of time and a lot of repetition, mainly paper repetition,” Ahalt said. “In a vast majority of those disputes, the results are fairly predictable, but the parties don’t realize that.”

by Caryn Tamber Daily Record Legal Affairs Writer - February 1, 2008 5:39 PM

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Monty Ahalt believes that most civil cases can be resolved without the parties ever being in the same room or even on the same phone call.

 

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