Online Dispute Resolution Service FairClaims Takes On AAA and JAMS with New Offering

The online dispute resolution service FairClaims is taking on established commercial arbitration services such as JAMS and the American Arbitration Association with a new offering that it says will resolve disputes far faster and at a fraction of the cost.

FairClaims’ new FastTrack Arbitration service is designed for business disputes of $25,000 or more, with a particular focus on disputes involving small- and medium-sized businesses or that are handled by lawyers in smaller law firms.

The news comes just a week after the launch of another ODR platform that promised to resolve business disputes more quickly and at less cost than traditional ADR forums.

Until now, FairClaims — founded in 2015 under the original name ArbiClaims — focused exclusively on resolving small claims disputes valued at less than $25,000.

Founder and CEO Stephen Kane, a former sole practitioner in Los Angeles, told me that the company is expanding into higher-value disputes because his customers have been asking him to.

“They don’t like AAA and JAMS because of the price and the difficulty of use,” he said.

The new FastTrack service is designed to challenge JAMS and AAA head on, Kane said, and was built with small-firm attorneys and small and medium businesses in mind.

“We can resolve million-dollar disputes within approximately 90 days for a fraction of the cost,” he said.

He expects that most cases handled through FastTrack will be valued at $250,000 or less. “For small firms and SMB cases under $250,000, we’re the platform for them,” he said.

FairClaims uses only high-quality arbitrators who have been carefully vetted, Kane said, and offers flat-fee pricing that makes it much more affordable than AAA or JAMS. Most disputes can be resolved in three to four months.

‘We’re Selling Trust’

Although FairClaims is a service for resolving disputes online, Kane said he does not view it primarily as a technology product.

“We’re primarily selling trust,” he said. “The number one thing is do people trust us, and along with that is the quality of the neutrals we provide.”

After that, the next most-important factors are price and efficiency. The technology, he said, is just a way to drive the efficiency of the workflows.

In fact, while FairClaims’ small-claims platform is fully automated, some aspects of the new FastTrack service are still being built and will be handled manually through email, Dropbox, and other means for now. Video conferences will use Zoom.

But once the full automation of the platform is completed, then all communications and scheduling will take place there.

FairClaims has created a set of rules to govern FastTrack cases. They are designed to streamline arbitration proceedings with a goal of resolving most disputes within 90 days from when an arbitrator is selected.

The rules allow for cases valued at under $250,000 to be decided on documents only, without a hearing. In cases in which hearings are held, they can be by video or telephone conference.

Lower Cost than Competitors

The cost of arbitrating a case through FairClaims depends on the dollar-value of the claim and the number of hearings required. Parties split the cost between them.

Fairclaims estimates that for a dispute valued at $100,000, its total cost would be $2,250. It estimates that the same dispute would cost $15,113 using AAA and $18,550 using JAMS.

When I wrote last week about the launch of a new ODR platform, I noted that ODR services have existed for 25 years without gaining significant traction, and I speculated that the pandemic — and its exposure of so many to resolving disputes online — may finally have primed the pump for ODR services to succeed.

Kane, of all people, is less sure of that. He believes that many larger law firms and companies do not actually want to resolve disputes more quickly, especially when they are with consumers, smaller businesses, and smaller law firms.

And he believes that the consumers, small businesses and small firms that would most benefit from the speed and lower cost of online ODR are often the ones with the least information and expertise about the process.

With this new FastTrack service, he hopes to change that.

“I’ve had a bunch of calls with small firm attorneys about this,” Kane said. “They’re not loyal to AAA or JAMS. What they care about is getting a good arbitrator and fair results for their clients.”