disputes
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In terms of freelancing: disputes or arbitration means trouble, [mostly] for one of the parties [service provider or the buyer] who are involved in a project.
Disputes occur when the buyer thinks that the service provider is doing or has done something wrong and/or the service provider thinks that the buyer is doing or has done something wrong.
Normally, buyers open projects at freelance sites and service providers place bids on those projects. Buyer then has to decide a winner among all the bidders. After buyer award the project to a service provider, the work get started. After service provider completes the work, the buyer verifies it and then buyer pay the money for the work, to service provider.
This is how things should normally go at freelance sites, but unfortunately, there are some projects where one [or both] of the parties do something wrong.
A service provider needed to submit the completed work in time to the buyer, but at the time of delivering the work, the service provider vanishes.
Or
Service provider fails to complete the work correctly.
Or
The quality of work was not up to buyers expectations.
Or
The buyer wants the service provider to do some extra work for him, which he has not mentioned in the project description. The buyer is not willing to pay extra money for this work.
There can be many other reasons why a dispute can rise.
If a party wants to stop the work on a project and tell the freelance site staff that he/she wants this project to be terminated, then the party have the option to enter the project in Arbitration or Dispute.
If a project enters arbitration, then the work on the project is stopped and the freelance site’s staff start to investigate about the reasons why the project entered arbitration. Freelance site’s staff will investigate and will decide which party is the culprit and he will be given a punishment in the form of a bad rating.
Arbitration or Disputes between buyers and the service providers ends [mostly] with one party getting a bad rating.
Arbitration should always be avoided.
But we should always prepare ourselves for the worst. In order to make sure that we do nothing wrong, here are few things to remember:
Always try to use the freelance site’s messaging system to communicate with other people. This is because, in this way, you can have all the conversation saved in freelance site as a proof and if anything goes wrong, you will be able to show the communication to freelance staff as your innocence proof.
For example:
Let’s say that you are a buyer and you hired a person to do a job for you. You described the job details in project description. Before hiring the service provider, you asked him/her that you forgot one thing about the job, that was not mentioned in the project description.
You tell the service provider about the forgotten thing and ask him whether he is willing to do the whole work [including the forgotten thing] for the same price. The person agrees and you accept his/her bid.
After few days, the service provider delivers the work but he has not done the last thing which you mentioned during your communication with him. The service provider tells you that he has not done that extra work as it was not mentioned in the project description.
Now you can enter this project in arbitration and when you will show the PM [where the service provide accepted to do the extra work for the same price] to freelance site’s staff, then you will easily win the arbitration.
You should always save all the evidence that you can get for the projects you work on. This is to make sure that you will be safe in case the project enters, arbitration. Always be prepared for the worst that can happen.
There are some sites where no one gets a bad rating in result of an arbitration decision. For example: at GAF, the party who loses the arbitration does not get a bad rating.
At some freelance sites: the freelance staff gives a bad rating to the party that loses arbitration.
And at some freelance sites, the winner of the arbitration gives a rating to the losing party.
Every freelance site has its own rules and procedure for arbitrations.
GAF has recently introduced a dispute resolution service for its site users. Now people can enter a project in arbitration status at GAF too. GAF used to have no arbitration system.
You can only use the dispute resolving system, if the money for the project is in Escrow and is greater or equal to $30.
There are three steps involved in resolving a dispute.
Round 1:
In this step or round: GAF automated software will give 3 chances to each party to make an offer or a demand to the other party.
For example: let’s assume that a service provider submitted complete work to the buyer after 6 hours of the deadline. The buyer needed the work on time, so he enters the project for dispute resolution.
Now in this case, the buyer can make offers to the service provider and service provider can make demands.
Each party can make offers for 25, 50, 75 and 100 percent of the money in the escrow.
The automated system compares both the offers. If it finds a match, then the dispute ends here. But in case there is no match even after 3 rounds of offers, then the automated software will make a automated offer to both parties. This offer will be based on the offers made by the two parties in the 3×2 = 6 chances they had.
They will then have 7 days to accept or reject the automated offer. They have to make a decision; either yes or no.
If one party [Party A] fail to respond in 7 days period and if the other party already has accepted the automated offer then GAF will assume that the first party [Party A] have also accepted the offer.
If one or both the parties reject the automated offer then the dispute enters second round.
Round 2:
In this round both the parties have to submit all the evidence they have. This evidence will be used in round three by GAF staff.
GAF charge a FEE if the dispute enters round 3 which is the arbitration round.
This fee is $10 or 2% [whichever is greater].
Both parties have three days to make a decision. They have three options: accepting the last offer made in the first round or to accept the automated offer or to enter the dispute in the third round.
If one of the parties fails to respond in the given 3 days: the decision will be made in the favor of the other party. The decision made will be based on the last offer or demand that the other party submitted.
Both the parties have to submit 50% of the arbitration fee in order to move ahead to the third round. 7 days are given to both parties to submit their share of the arbitration fee.
If any party fails to submit arbitration fee in the given 7 days: then the decision will be made in favor of the other party.
In case both the parties fail to submit arbitration fee then the automated offer will be implemented.
GAF also offer a credit if a party cannot arrange the arbitration FEE.
Round 3:
This is the round where GAF staff sees all the evidence and decide which party should be the winner of the arbitration. GAF staff will decide within 14 days.