Freelancer.com - Dispute Resolution and Arbitration
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I was surprised to find that Freelancer.com had a dispute resolution process. My recollection from using the site a couple of years ago had been that there wasn’t one, and I thought that was rather consistent with the somewhat “free for all” attitude I associated with the site. But I was wrong: the site does have a dispute resolution and arbitration mechanism. And while it is rather limited, Freelancer.com deserves credit for not only providing this system, but also making it affordable.
This process is open to all users and projects on the site, but only if the milestone payment system is used; if it is not, then Freelancer.com does not provide any help in the event of a conflict. Unfortunately, many contractors do work without using the milestone payment system, in part because the design of Freelancer.com in some ways discourages them from doing so. Clients who have paid freelancers directly, or who have made milestone payments but released them, likewise cannot use the system. It is only for determining the disposition of funds currently held in a milestone payment (Freelancer.com’s equivalent of escrow).
Freelancer.com’s documentation states that their dispute resolution system involves three stages. The first is an automated negotiation round; the second involves requesting arbitration and submitting evidence for it; and the third is the arbitration itself. As you can see, there’s really only two actual stages to the process, since stages two and three are both part of arbitration and really go together.
If a client and contractor are not able to agree on how to resolve a problem with a project, they start out by using what Freelancer.com calls their automated resolution system. The party that initiates the process files a dispute and an offer equal to 100%, 75%, 50% or 25% of the project value; if the client files the dispute this is an offer to pay that amount, and if the contractor files the dispute, it’s an offer to accept that amount. The other party has seven days to respond; if they fail to do so, the offer is automatically accepted. If they do respond, they can either accept the offer or counter-offer. The two parties can go back and forth three times this way; if no settlement is reached, Freelancer.com’s software will calculate a final “auto-offer” to present to the parties, which will be implemented if both accept.
To be honest, this strikes me as a rather pointless exercise.
First, it is not really a dispute resolution system at all—it is a form of negotiation, or an attempt to get the parties to compromise. But my guess is that few people will want to compromise in the case of a project gone south: a contractor who completes a project wants to be paid what he/she was promised, and a client who puts aside money for a project that isn’t done to his/her satisfaction wants the money back.
Second, if the parties are willing to negotiate a compromise, then they are likely both reasonable people and don’t need this clunky automated system anyway. They can just as easily negotiate with messages to come up with a dollar figure that they both consider to be fair.
Finally, if the parties can’t agree on a dollar value to settle the project, what on earth is some computer-calculated “auto-offer” going to accomplish?
Maybe I’m wrong and this actually has a valid use, but I just don’t see it. Frankly, it strikes me as more of a hurdle for the client and contractor to have to endure before asking for arbitration, than anything else.
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