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Why would Upwork encourage arbitration (!) on a closed contract with $ 0 in Escrow??

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Community Guru
Tiffany S Member Since: Jan 15, 2016
21 of 79

This was recently discussed here and it turns out that the idea that only funds in escrow are at risk is a myth. 

 

I'm looking for the information that was ultimately sorted out, but it was something along the lines of the whole contract being at risk for 30 days after it was closed, and then another 30 days to get from dispute to arbitration.

 

Your restatement above is essentially accurate.

 

ETA: It's all spelled out on this page, in Section 5, and is a direct contradiction of what we have frequently been told in the forums: https://www.upwork.com/legal/fp/

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Petra R Member Since: Aug 3, 2011
22 of 79

Yup, Tiffany.

That is exactly what I am concerned about.

Whilst in the case I am aware of the freelancer in question frankly needs to be hung, drawn and quartered, the underlying issue is that we were always led to believe that once a client approved milestones and closed the contract, that was it...

 

As I said, I've never had a dispute, but this is really disconcerting and not as it used to be.

 

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Phyllis G Member Since: Sep 8, 2016
23 of 79

Wow, this is huge. I also have never had a dispute and would like to think I never will. But things can go sideways with no warning.

 

I'm reading closely through the information that Tiffany linked and I have a LOT of questions.

 

Section 5.5 (Filing the case with the arbitrator) says that if the one requesting arbitration pays their share of the arbitration fee and the other party fails to pay their share within 5 business days of the first notice, the second party's account will be suspended and anything in escrow will be released to the the one who requested arbitration. If nothing remains in escrow, Upwork will close the dispute. If both parties pay their portion of the arbitration fees, then UW will instruct them on how to proceed. Do I understand correctly that if nothing is left in escrow, then the non-responding party gets their account suspended and no more money changes hands?

 

In Appendix A, Rules of the Proceedings, item #5: "All proceedings will be “on documents” and the evidence admissible will consist solely and exclusively of Workroom contents at the time the Dispute was submitted to the Upwork Dispute resolution process. Any communication taking place outside the Workroom must have been posted to the Workroom within 24 hours of the original transmission of that communication in order to be admissible."  Which communication--that which took place outside the workroom, or the communication submitting the dispute to the dispute resolution process? If the former, then every bit of project communication conducted via email or any other means would need to be documented in the workroom within 24 hours after it occurs, throughout a project.

 

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Reinier B Member Since: Nov 3, 2015
24 of 79

@Phyllis G wrote:

Wow, this is huge. I also have never had a dispute and would like to think I never will. But things can go sideways with no warning.

 

I'm reading closely through the information that Tiffany linked and I have a LOT of questions.

 

Section 5.5 (Filing the case with the arbitrator) says that if the one requesting arbitration pays their share of the arbitration fee and the other party fails to pay their share within 5 business days of the first notice, the second party's account will be suspended and anything in escrow will be released to the the one who requested arbitration. If nothing remains in escrow, Upwork will close the dispute. If both parties pay their portion of the arbitration fees, then UW will instruct them on how to proceed. 

 

Do I understand correctly that if nothing is left in escrow, then the non-responding party gets their account suspended and no more money changes hands?

 

I read this part the same way, but what I don't get is why the non-responding party's account needs to be suspended automatically?

 

Wouldn't this drastic measure have to be tested against the  merits of the dispute, sort of like proving habeas corpus, before any accounts get suspended? One more thing- will an account suspension in such a case be permanent, even though habeas corpus may not have been proven before an account was suspended?

 

What say you, moderators?    

 

 


 

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Irene B Member Since: Feb 17, 2015
25 of 79

So...to put it in a nutshell...the following scenario applies...

 

 

I've worked with a client...let's say for 2 months. During this time, I have submitted work and been paid for each milestone. Contract is finally closed.

 

A little while later, said client decides...you know what....I don't like the work I want my money back.

 

He files a dispute, pays the moolah.

 

I don't have the cash to match the money. I've paid my bills. I need to do more work and get paid before I can match that money...the time period lapses.

 

Whether I am innocent or guilty - my profile is gone...as not being able to match the moolah for arbitration summarily paints me as being guilty. 

 

I think that is the gist of it. 

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Nichola L Member Since: Mar 13, 2015
26 of 79

It's a no-win for either side - but it is particularly unfair for a freelancer to have his or her account unfairly suspended for lack of cash, particularly as Upwork has no in-house process to determine fair or unfair before a contract is taken to arbitration.

 

I suppose the answer is to set aside the arbitration fee from the start, in case it is ever needed.

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Gerry S Member Since: Nov 23, 2014
27 of 79

No "statute of limitation"?

 

(The Republic of UpWork ... lol)

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Nichola L Member Since: Mar 13, 2015
28 of 79

@Gerry S wrote:

No "statute of limitation"?

 

(The Republic of UpWork ... lol)


 Well there is on a dispute - it's not clear for arbitration - at least I can't see it in so many words.

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Tiffany S Member Since: Jan 15, 2016
29 of 79

@Nichola L wrote:

@Gerry S wrote:

No "statute of limitation"?

 

(The Republic of UpWork ... lol)


 Well there is on a dispute - it's not clear for arbitration - at least I can't see it in so many words.


 There is. I don't recall whether it is 30 days after initiation of the dispute or the failure of dispute resolution, but it is one of those.

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John K Member Since: Feb 17, 2015
30 of 79

@Nichola L wrote:

 

I suppose the answer is to set aside the arbitration fee from the start, in case it is ever needed.


Well, you do have 5 business days to come up with the fee, but even having it set aside won't work if 2 clients decide to arbitrate at the same time. There's one detail I'm curious about. Section 5.5 states,

"If the Arbitration Respondent fails to make the Arbitration Payment and submit to such Arbitration within 5 business days after the First Arbitration Notice, Upwork will suspend the Arbitration Respondent’s account"

We're assuming the suspension is permanent, but the statement I quoted does not say so explicitly.

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