Paid for Arbitration and never received it; Upwork won't refund arbitration fee

[invocabo]

Hi fellow freelancers,

I had a client try to steal my work.  It was an open and shut case.  Mediation failed so we went to arbitration. I paid my fee and started the arbitration process with the American Arbitration Association.  My legal counsel assured me we would win in arbitration.

The client never responded to the arbitration case, and then Upwork canceled the arbitration and released my escrow for the project.  Now Upwork won't refund the $291 I paid for arbitration.

Has anyone experienced this process before?  

[petra_r]

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@Jeff C wrote:

Hi fellow freelancers,

 
The client never responded to the arbitration case, and then Upwork canceled the arbitration and released my escrow for the project.  Now Upwork won't refund the $291 I paid for arbitration.

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 Once arbitration is entered into (all parties have paid the arbitration fee) the arbitration fee is no longer refundable, only if the client pulled out before arbitration started without paying for abitration. Once arbitration is entered into the arbitration company is paid and the fee for arbitration is theirs.

You won. The arbitration fee would not have been refundable even if the client had participated and you'd have won. Once arbitration starts all 3 arbitration fees are gone.

[invocabo]

I did not receive arbitration.  The AAA says the case was withdrawn.

Jeff

[vladag]

Hi Jeff,

In case only one party pays the arbitration fee, the fee is later returned to them automatically. Are you seeing anything differently on your end and could you confirm whether the client paid the fee?

[invocabo]

Thank you for your reply Vladimir.  Please see my correspondence with Leah re mediation ticket# 18806291.

[petra_r]

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Jeff C wrote: Now Upwork won't refund the $291 I paid for arbitration.

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 When you say "won't" - did they state to you that they will not?

Was arbitration entered into (the client paid his share) or did the client become unresponsive and failed to pay?

[invocabo]

That's right, Petra, they have said they will NOT refund my payment for arbitration.

I cannot, of course, see what the client did or did not do.  I presume they paid for arbitration, since the case was opened.   The client never responded.  I contacted AAA and they said the case had been withdrawn by Upwork.

[petra_r]

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@Jeff C wrote:

That's right, Petra, they have said they will NOT refund my payment for arbitration.

I cannot, of course, see what the client did or did not do.  I presume they paid for arbitration, since the case was opened. 

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 In that case the arbitration fee is not refundable. Upwork withdrawing the case after arbitration was entered means the arbitrators were paid. So the client, you and Upwork paid $291 each. You won by default. Had the client turned up it would have taken weeks and even if you had also won you'd have spent time, money and nerves on it. Better this way.

Congrats.

[invocabo]

I appreciate your perspective, but I did not 'win'.  Upwork withdrew the case.  What's the difference?  The client still owes me a significant amount of money.  I paid for arbitration because a favorable arbitration conclusion will go a long way to my collecting the outstanding debt.

I did not receive the arbitration I paid for.  

[kochubei_valeria]

Hi Jeff,

I'll follow up with our Dispute team about the status of the Escrowed funds and the arbitration fee. They will update you directly via the ticket.

Thank you.

[kirillt]

I know it 4 years passed, but what was the result of that dispute?
The topic itself sounds quite demotivating for other freelancers.

[vladag]

Hi Kirill,

While we can't share any details about the case discussed in this thread or its outcome, I can assure you that it was managed in line with Upwork ToS and the dispute resolution process that you can read more about in Valeria's opening post here. Feel free to follow up afterwards if you have any questions or need assistance.

[invocabo]

Kirill,

This was my project.  In the end, it was very simple; the client was willing to pay for arbitration fees simply to force me to pay for the fees and force me to do the work to prepare for arbitration.  He had no intention of going through with it and was willing to spend money just to force me to spend money.  It was purely vindictive.

Freelancers should recognize that that while this is exceptionally rare (I've been here for 10 years and this is the only time I've faced this), it CAN happen.  In my case the amount at question was large enough and my certainty of winning was high enough that I was willing to spend the money.

Good luck.

[kirillt]

Hi Jeff! Thanks a lot for sharing, this is pretty useful.

[prestonhunter]

Jeff:

Thank you for sharing your story!

[richard_wein]

Hi Jeff. Just to be clear, are you saying that the client got a refund of his remaining funds in escrow?

(I just want to check that you realise that arbitration is only concerned with the disposal of funds in escrow, and not with any other sum that your client may have owed you.)

ETA. I just reread your OP, and saw that you said Upwork "released my escrow for the project". I'm still not clear whether you meant that the escrow was released to you or to the client. If was to you, then Petra is correct. You won the arbitration. Release of the escrow to you is the most that you can get from arbitration.

[petra_r]

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@Richard W wrote:

ETA. I just reread your OP, and saw that you said Upwork "released my escrow for the project". I'm still not clear whether you meant that the escrow was released to you or to the client. If was to you, then Petra is correct. You won the arbitration. Release of the escrow to you is the most that you can get from arbitration.

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 He wanted more and wanted an official "verdict" from arbitration to take additional legal action.

[richard_wein]

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@Petra R wrote:

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@Richard W wrote:

ETA. I just reread your OP, and saw that you said Upwork "released my escrow for the project". I'm still not clear whether you meant that the escrow was released to you or to the client. If was to you, then Petra is correct. You won the arbitration. Release of the escrow to you is the most that you can get from arbitration.

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 He wanted more and wanted an official "verdict" from arbitration to take additional legal action.

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I see now. I don't think of that. 

[invocabo]

Richard, I never received arbitration, because the client backed out after we both had paid.  AAA could not rule because, they claimed, their agreement with Upwork allows Upwork to pull the case before a decision is reached.

So, while I did receive the money in escrow, I did not receive the arbitration services I paid for.  This was my complaint about the process.  Had I received the arbitration, I would have had additional evidence with which to pursue legal action against the client for even more funds owed me,  but which had not yet been placed into Escrow.  

Upwork would have better protected my rights by ensuring I got the arbitration they had promised if I paid my part of the fee.

[vladag]

Hi Jeff,

Thank you for following up on this thread and sharing your insight. Without discussing the case details, I'd like to clarify that arbitration can't proceed once funds are released from Escrow, since in that case there's nothing to arbitrate. Also, Upwork doesn't play any part in the arbitration process, which is carried out by an independent third-party company, and the arbitration fees all three parties paid (you, your client and Upwork) aren't refundable since the arbitration process had been already initiated for your case.

[invocabo]

Vlaidimir,

Thanks for your response.  As I mentioned at the time of this case, you just need to change the rules to prevent unscrupulous clients from abusing it.  In this case, I paid for arbitration but did not receive it.  All I received was the return of the escrow.  But I had earned the escrow by my labor; I did not need to buy it.  Your current policies forced me to buy the money I had already earned.

If you correct your policies that presently allow the client to withdraw from arbitration after forcing the freelancer to pay, and instead bind the client to the arbitration and prevent them from withdrawing from it, the freelancer can receive the benefit of arbitration AND get the escrow which was rightly theirs.  It may seem to you that there is no difference, but if there is no difference, then I should not have to pay for the arbitration at all, and the person who is manipulating the system should bear the full cost.

[richard_wein]

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@Jeff C wrote:

Richard, I never received arbitration, because the client backed out after we both had paid.  AAA could not rule because, they claimed, their agreement with Upwork allows Upwork to pull the case before a decision is reached.

So, while I did receive the money in escrow, I did not receive the arbitration services I paid for.  This was my complaint about the process.  Had I received the arbitration, I would have had additional evidence with which to pursue legal action against the client for even more funds owed me,  but which had not yet been placed into Escrow.  

Upwork would have better protected my rights by ensuring I got the arbitration they had promised if I paid my part of the fee.

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 Thanks for clarifying, Jeff. All is clear now. I understand your frustration.

@I wrote:

I see now. I don't think of that.

 *Didn't* think. Perils of using a Swype keyboard.

[yitwail]

Jeff, thanks for providing all the details. So the net result was that the client paid $291 in order to make you pay $291 as well. Since Upwork also had to pay $291, the only party that benefited were the arbitrators, who didn’t have to lift a finger. How wonderful.

[invocabo]

John, it depends on how you define "win".  

The client knew he could not 'win' at arbitration, so by forcing me to pay, he was gambling that I might not, and he would therefore win.  Or, if I did pay, and prepared a petition, he could relish in the fact that at least he had caused me time and expense.

The arbitration firm certainly 'won' because they got the money and did almost nothing.

I 'won' because I lost less money than I would otherwise.

Upwork is the loser because their policies failed to protect a freelancer from an unethical, abusive client.  I'm a 10 year veteran of this platform with a great track record and now I have to warn people about the risks that before this experience would never have come up.

Jeff

[petra_r]

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@Jeff C wrote:

Upwork is the loser because their policies failed to protect a freelancer from an unethical, abusive client.  I'm a 10 year veteran of this platform with a great track record and now I have to warn people about the risks that before this experience would never have come up.

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 Frankly looking at it from both sides all sorts of things went wrong here. You outsourced a contract you personally won (evident from the client's feedback and to you and your own "we" )

You say the client owed you more than what was in Escrow - well - working beyond what's funded is on you.

If your client had really known his way around the Terms of Service he might have walked away with his Escrow Funds and your account  being history.

[invocabo]

Hi Petra,

You wrote, "Frankly looking at it from both sides all sorts of things went wrong here. You outsourced a contract you personally won (evident from the client's feedback and to you and your own "we" )"

Now we're getting into specifics?  Okay.  No, I didn't outsource anything.  "We" refers to the agency I am associated with.  You can see that from my profile.  **Edited for Community Guidelines** hired me for precisely that reason; I was not merely a highly rated copywriter with a perfect track record on Upwork/oDesk/Elance who was willing to take his urgent project and work beyond the initial scope of the project, but also because I had the resources to accomplish the project.  

"You say the client owed you more than what was in Escrow - well - working beyond what's funded is on you."

Exactly, which is why I wanted the arbitration I paid for.  

"If your client had really known his way around the Terms of Service he might have walked away with his Escrow Funds and your account being history."

Is that so?  Is this the advice **Edited for Community Guidelines** was getting from Upwork that led him to such an unyielding  and threatening posture?   I did the work I was hired to do, and I asked to be paid for it.  Why didn't Upwork caution me to settle or abandon my claim on Upwork if I was the guilty party?  Why did he withdraw from arbitration if he had such an open and shut case? 

[versailles]

I'm moderately happy with the fact that AAA (the arbitrator) received $291 x 3 for doing nothing, while an arbitration would, maybe, have helped Jeff in any further legal action he could have engaged into.