The online legal services market is a worldwide, multi-billion dollar (and growing) industry, with clients increasingly turning to the Internet—rather than an attorney—for their legal needs. Withdraws
But online legal documents, such as form contracts provided by Internet companies, are not always favorable to consumers: the New York State Bar Association (NYSBA) report found, for example, that many online legal document providers offer contracts that contain arbitration provisions and class action waivers, and lack privacy protections for users’ sensitive data.
As a result, the New York State Bar Association sponsored Resolution 10A, a resolution that builds on previous, wide-ranging “Best Practice Guidelines” and adopts model rules specifically for companies that offer legal documents online. The Resolution declares that it seeks to establish minimum standards of product reliability and efficacy, provide consumers with information and recourse against abuse, make consumers aware of the risks of proceeding without attorneys, inform consumers how affordable attorneys can be found, and protect consumers’ confidential information.
Among its best practice guidelines, the Resolution suggests that companies offering online legal documents should provide customers with “clear, plain language” instructions as to how to complete the forms, the appropriate uses for each form offered, and the enforceability of each form in the relevant state. With respect to unfavorable clauses often written into online contracts, the Resolution specifies that online forms should not (1) include provisions requiring “inconvenient forum[s]” for dispute resolution, (2) require arbitration, (3) preclude customers from joining class actions, or (4) require shifting of legal fees. Furthermore, the Resolution suggests that companies “inform their customers, in plain language, of the importance of retaining an attorney to assist them.”
Despite its noble purpose, the Resolution was withdrawn from the ABA House of Delegates after debate concerning lack of clarification in its rules. Specifically, the executive committees of the ABA Center for Innovation, the Standing Committee on the Delivery of Legal Services, the Business Law Section, and the Section of Dispute Resolution all raised concerns regarding warranties, intellectual property, and dispute resolution. Additionally, there was uncertainty as to whether the rules would apply to courts that offer online forms.
The NYSBA agreed to withdraw the Resolution for now, with a view to refine the guidelines and introduce a revised Resolution at the ABA Annual Meeting in August of this year.
Read the full Resolution 10A here.
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