Late payments and the lack of an efficient way of recovering debts are a longstanding problem facing the vast majority of SMEs. LawtechUK has tried to find a solution to this problem and has sought to evaluate and demonstrate how technology could address it.
It worked with a consortium of legal, technology and alternative dispute resolution experts to establish a feasibility study proof of concept for an SME online dispute resolution platform to provide an affordable, easy to use environment for SMEs to recover unpaid debts, as an optional alternative to the courts.
The platform enables disputes to be resolved within six to eight weeks, which would be significantly faster than through the court process. It also deploys a non-adversarial methodology to enable business relationships to be preserved and provides a digital self-service experience, innovating on how disputes can be resolved. The service would sit alongside existing court infrastructure, so businesses would choose to resolve their disputes within the platform instead of starting legal proceedings in court. Any resolutions achieved through the platform would be legally binding. Enforcement of such resolutions could be facilitated through the courts where needed, with the aim of maximising the best of public and private offerings to achieve optimal user outcomes.
The study shows how the platform could be established and become financially self-sustaining within a short period, and provides detailed analysis, as well as insight on the development of the platform, taking account of the user and jurisdictional context and available technologies. It also sets out a business case for aspiring providers, estimating the platform could empower UK businesses to resolve over 200,000 disputes over a five-year period, accounting for £3.4bn in debt value.
LawtechUK is not funding or developing the platform itself, but by publishing the study it aims to:
- Encourage innovative developers to build and finance the technology, which is recommended to come from a combination of public and private funding.
- Encourage government support, as a critical enabler of the platform in its initial stages.
- Raise awareness within the legal and tech community on the opportunity and methodology it presents.
