eBay ODR Co. Modria Sells Up, Legal Tech Consolidation Mounts

Modria, the California legal tech start-up whose founders pioneered Online Dispute Resolution or ODR at eBay and PayPal, have sold out to the publicly listed tech giant, Tyler Technologies.

The Modria ODR technology will now be used in local courts and also Government tax offices to solve less complex disputes with a greatly reduced need for intervention by lawyers, accountants and other human input.

Tyler’s acquisition marks another example of consolidation in the legal tech market with larger companies taking over smaller innovative pioneers at a growing rate.

Also this week Exari, a major contract lifecycle management company has acquired Adsensa, a contract data discovery and analytics company that worked in the banking, insurance and also legal sectors. The moves follow the recent takeover of legal AI company RAVN by US document management company iManage last month. Industry insiders also report several large companies making concerted efforts to buy-out other legal AI start-ups in order to acquire their tech capabilities.

Tyler Technologies is a very large software company that works closely with the public sector, including the US courts and local government bodies. For example, they have helped courts and bodies that deal with public fines to update their systems to the cloud and provide better data and case management systems.

In a statement the company said that Modria will provide Tyler’s court clients with efficient ways to handle large volumes of disputes in an automated fashion. Specifically, it will help reduce the number of cases that need to be heard, leading to reduced costs in the court and in clerk offices for supporting these hearings.

For appraisal and tax clients, Modria offers the assessor’s office an alternative to manage the appeals process online for fast and fair resolutions for their constituents. Being able to integrate Modria into Tyler products for the Government’s justice system will improve efficiency, reduce costs, and ‘deliver even greater citizen engagement’, the company said.

Many people who have used eBay or PayPal will also have used technology based on the early work of the founder of Modria, Colin Rule, who back in 2003 helped eBay develop an automated system for solving disputes between buyers and sellers that would avoid the need for lawyers and other human intermediaries. He later joined PayPal and helped them to also develop ODR systems.

Later he met with Chittu Nagarajan, who had pioneered ODR technology in India and China, and in 2011 Modria was created. Now six years later the ODR company has been sold to US-listed tech giant Taylor Technologies, bringing an end to the start-up’s journey and the beginning of new chapter for ODR technology, this time with a focus on court-related legal matters.

That said, Rule’s legacy lives on and eBay’s ODR platform now processes 60 million disputes a year, 90% without requiring human intervention. The takeover may also signal a much broader use of automated dispute resolution systems, given its now indirect use by the US Government. No doubt justice ministries around the world, including in the UK, will be looking on with interest.