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Dispute Resolution and Arbitration fee of $291

shansd
Active Member
Chanika D Member Since: Feb 3, 2017
1 of 13

Good day ,

Recently i was on to a dispute with a client for a payment amount less than 100$ .Dispute team was helping us very well ,ultimately we could not come to a conclution yet .But what i'm focusing is if a dispute not be solved it has to be legally solved by non bounded party by paying 291$ by each party .As per i understand Client ,Freelancer and Upwork 291$ each party . So my question is 

 

1-How can freelaner pay 291$  for a disute like below 100$ 

2-Does upwork has a legal team to solve it inside and lets a panel of legall professionals do it to become non bounded 

3-Ithink these mediations should include inside the service charge of 20% that upwork deducting from us 

 

Please advise and add more comments so that we all got educated on this .

Wishing you success 

petra_r
Community Guru
Petra R Member Since: Aug 3, 2011
2 of 13

Chanika D wrote:

 

1-How can freelaner pay 291$  for a disute like below 100$ 

2-Does upwork has a legal team to solve it inside and lets a panel of legall professionals do it to become non bounded 

3-Ithink these mediations should include inside the service charge of 20% that upwork deducting from us 


1 - If the freelancer pays the arbitration fee and the client does not, the freelancer gets the arbitration fee back and the money in Escrow.

2 - No, because Upwork as an escrow agent does not decide over Escrow funds.

3 - Mediation costs nothing. Arbitration is a third party service and expensive. I'd rather not have the fees go up and I would resent having to pay a higher fee to pay for other people's arbitration.

Arbitration is a last resort when all else failed.

 

shansd
Active Member
Chanika D Member Since: Feb 3, 2017
3 of 13

Thanks i mean 

1-Id the disputed amont lets sa7 100$ and how can we agree for an Arbitration process of 291$ ,If we fail we loose additional 291$ for 100$ 

2-I think upwork and escrow need an agreement to solve this inside upwork than allow freelancers to pay 291$

3-If upwork and escrow agree we can do it for better price or they should appoint region Arbitration agents to match the currency values 

 

What do you think 

tlbp
Community Guru
Tonya P Member Since: Nov 26, 2015
4 of 13

All parties agreed to the dispute system when agreeing to Upwork's TOS. It is not cost-effective for Upwork (or freelancers) to arbitrate small sums. IF you are willing to bet $291 that the client will not spend that much to arbitrate, you could get to keep your money. However, for most freelancers (IMO) this is not a risk worth taking. 

 

The reality is, you have very little recourse if a client doesn't pay you and the matter cannot be resolved without going to arbitration. If you were not paid for your work, you may keep the work product and use it in your portfolio (assuming it is something that can be used). 

prestonhunter
Community Guru
Preston H Member Since: Nov 24, 2014
BEST ANSWER
5 of 13

Chanika:

You are right if you are wondering about this and coming to the conclusion that it is not an ideal system.


Unfortunately, there is no way for Upwork to encode a software system and organization system that has the wisdom of Solomon built into it in such a way as to make everything fair all the time.

 

Does it make sense to pay $291 in order to secure the possibility of getting $100?


No, this does not make sense mathematically. You're right about that.

 

What can you do?

My advice is for freelancers to never work on large fixed-price contracts with clients they are not familiar with. Start small. Understand that due to the "fixed-price loophole", if a client wants to act unethically, they can potentially jam a freelancer up by simply refusing to release payment.


So if you start small, maybe no more than an hour or two worth of work, then if a client DOES turn out to be unethical, you have not lost out on so much payment. If necessary, you can afford to just walk away, rather than dealing with arbitration.

 

Personally, I want to do everything I can that is reasonable to have a client be satisfied. I have gone to pretty extreme lengths to satisfy clients and help them with their projects - even in fixed-price contracts where I'm not earning any more for my extra time. But if a client is just plain being unethical and trying to avoid paying for my work, then I am definitely ready to close the contract and not get paid rather than play games with them. I have often told clients up front that they have the option of releasing the escrow payment OR paying nothing. Fortunately for me, the thing my clients want most to avoid is losing access to my services. So I do not end up actually having clients decide to simply NOT pay. But I understand that many freelancers may not be in the same situation.

 

Regardless of what type of freelancer you are, I don't want any freelancer to feel like they are an indentured servant, obligated to work without end for an unreasonable client who refuses to release payment as agreed. That is why I recommend starting out small with an unknown client, and then agreeing to increasingly large fixed-price contracts if the client demonstrates that she can be trusted to release payment properly.

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shansd
Active Member
Chanika D Member Since: Feb 3, 2017
6 of 13

Ya thanks a great reply

shansd
Active Member
Chanika D Member Since: Feb 3, 2017
7 of 13

Thanks Tonya

gtoscano
Active Member
G T Member Since: Aug 12, 2017
8 of 13

Hello,

Last Saturday I received this message about an arbitration:

"As the client for Contract ID ###### did not elect to proceed to arbitration, the funds in the escrow have been released to the freelancer. The dispute is closed."

Well, I received the funds.
And about the fee of 291$ , I had paid?

djondinium
Community Manager
Aleksandar D Community Manager Member Since: Mar 23, 2019
9 of 13

Hi G T,

 

If one party pays for arbitration and the other does not, the dispute is found in favor of the party who paid their fee.  In that case, any funds held in Escrow will be released to the paying party and the arbitration fees will be returned.

 

I'll follow up with the team handling your case and you can expect an update very soon.

 

Thank you.

~ Aleksandar
Upwork
gtoscano
Active Member
G T Member Since: Aug 12, 2017
10 of 13

Hi Aleksandar,

I received the 291$

Thank you

Smiley Very Happy

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