What does arbitration really do?

[amason98]

I started a contract with a woman who had no idea how much work would be involved on her part to complete the project. I inform her that it would be labor intensive on both sides since I have never written a proposal for her company before and she needed to provide details on HOW she plans to complete the job not just that she will follow the requirements of the solicitation. Well, 2 days before the contract is suposed to end she indicated that she felt she was doing too much of the heavy lifting and that she hired he as the technical expert to which I replied, "I am the technical expert on how to respond to a government solicitation but not on how you plan to perform it." The government wants to know you have a plan to complete it. Anayways, she cancels the contract and only is willing pay me $150 of the $650 fix price contract, even though she has almost all of the completed work. Now Upwork is telling me that's her final offer or I can go to arbitration and pay $291. What will that do for me if I cant get more than the $300 in escrow? I just feel like she can get away with only paying $150 after she has everything in hand and 2 days from me being complete. What exactly is upwork doing to protect me from the work I provided her?

[moxilla3]

I got screwed by this "arbitration". Client wanted "A" as specified in her postting. After job was accepted, there was apparently some idea in her head that I was her new indentured servant and kept piling on more work never specified. Long story short not only do you get screwed out of money for work but get a sh#t feedback if you fight back against this indentured servant concept.

Now I added the following statement to my profile:

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About the scope of project/proposal:

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For any project I accept, I am accepting the scope precisely as written in your post. You may NOT expect to add more work to the scope of the project after it has been accepted (unless you are willing to pay for the additional work, of course)— as the project proposal is based solely on the original request as you wrote it.

Thank you for respecting all designers’ time, it is just as valuable as yours!
If you DO need additional work, that can always be negotiated. Thank you for respecting and understanding.

.

[petra_r]

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@Susan H wrote:

I got screwed by this "arbitration".

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 Did you actually take it to arbitration? Meaning you and your client and Upwork all paid the arbitration fee, and the 3rd party arbitrator decided?

[prestonhunter · Accepted solution]

Andrea:

Clearly you do not relish the idea of going to arbitration.

You asked what arbitration really does?

Arbitration means that Upwork uses your fee, the client's fee, and it's own fee ($291 each) in order to have a third party arbitration service look at the case and render a legally binding verdict.

You might get the full $650.00.

You might get nothing.

If you are awarded $650, and you subtract your non-refundable arbitration fee from that, then you will have earned $359.

But it sounds like (from the client's perspective) you didn't finish the job. You may be dealing with a terrible, impossible client. But the abitrators might not see it that way.

Ultimately it is up to you. $359 is definitely more than $150.

But paying $291 and getting nothing would not be fun.

[bobafett999]

Arbitrator listens to both sides and examines the corrorespondence you had with the client and makes a decision. 

I am sure thre is more to the story  than what you have posted.  However, if you believe you are in right go to arbitration.  The buyer may not be that naive.  The corooked buyers always use the "mediation' thing and get reduced price for their work.

If both of you go to barbitration you could lose $291 + your aork.

If the the buyer is bluffing and does not go you get your $291 back + 650.

If you win you get 650-291=359.

In fixed price contracts the only protection you have is to break the projects in little steps and get paid for each step (font load the first step).  Or go to arbitration.  No other protection exists for you.

EDIT: (I am not certain, but)It is my understanding that if no resolution is found in the Mediation phase and you choose NOT to go to arbitration, the cooked buyers gets the money in escrow + whatever work you have sumbitted.  In other words they get your work for free.

[colettelewis]

If this were me (and I always keep this sort of money in hand - in case) - I would take it to arbitration  on principle. And as Prashant says, the arbitrator will do just that - arbitrate. 

ETA: But you do need to be able to furnish all the deets in your favour. 

[richard_wein]

Now Upwork is telling me that's her final offer or I can go to arbitration and pay $291. What will that do for me if I cant get more than the $300 in escrow? I just feel like she can get away with only paying $150 after she has everything in hand and 2 days from me being complete. What exactly is upwork doing to protect me from the work I provided her?

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Hi Andrea. Are you saying that the client only put $300 into escrow, and not the full $650? If so, then I'm afraid the onus was on you to insist that the client fully funded the escrow before you did the work. You are only protected for the amount in escrow, and, if the client is intransigent, the only way to enforce that protection is by paying for arbitration.

The one bit of good news is that if you pay for arbitration and then the client declines to pay her own share of the arbitration fee (also $291) then you win by default, without actually going to arbitration. In that case, you get the full amount in escrow and your arbitration fee is returned to you.