Air passenger rights or rent reductions: Legal tech companies, which help consumers to assert their rights with the help of largely digital processes, have long since prevailed for many simple disputes. But now they are also taking on more complex cases. The company Helpcheck pursues illegal gambling providers as far as Malta.
Air passenger rights or rent reductions in standard cases: Legal tech companies – startups that help consumers to get their rights with the help of highly standardized processes – have long since asserted themselves for such problems. But now they are also taking on more complex cases. The founder of Helpcheck tells ntv.de how the company pursues illegal gambling operators all the way to Malta.
ntv.de: Legal techs have established themselves, for example, on the subject of compensation for flight delays or enforcement of the rent control. With the coverage of these consumer topics, is an end to the boom in the industry in sight?
Peer Schulz: Overall, digitization in the judiciary is still in its infancy. Jurisdiction has just arrived technologically in the 19th century. The potential for digital business models is correspondingly large. I see several directions the industry is going in. Especially new, more complex areas of law. In addition, new business and cooperation models are emerging, such as partnerships with legal expenses insurance companies.
The basis of the business model of legal tech companies is scalability, extensive standardization and digitization of processes. With the mostly out-of-court enforcement of passenger rights, this seems easy. Doesn’t this approach quickly reach its limits in more complex areas of law, especially when the cases regularly end up in court?
At Helpcheck, we focus specifically on those more complex areas of law that are not the focus of the industry. The effort is significantly greater. But there are only a few competitors when it comes to the reversal of faulty life insurance contracts, for example. This is also similar to gambling losses on the Internet, which we are now tackling as a new area of ??law.
How do you proceed?
A short explanation: Many providers of games of chance on the Internet do not have a valid license under German law and are therefore offering their services illegally. This means that consumers can reclaim their losses in full. On the one hand, only a few of those affected know this. And on the other hand, it is almost impossible for the individual consumer to enforce this claim, since the providers are usually based abroad – mostly in Malta – and do not react to corresponding demands. We first fought through a few cases together with lawyers in Germany and Malta in order to gain experience and to test the relationship between effort and income. Then we built up a network of partner lawyers in Germany and Malta, developed software for efficient processing of cases and finally invested in the necessary advertising, for example in social networks, in order to address those affected and inform them of their claims.
So this effort – including advertising, legal fees and court costs in two countries – is worth it for you?
Incidentally, the effort involved in this case often includes time-consuming debt collection procedures, since the companies often do not pay even after losing court proceedings, file for bankruptcy and continue under a different name. But it’s worth it – for us and for the consumers affected. In such cases, legal techs like us restore the balance between companies and consumers in the first place.
Do you see this as a “mission” of legal techs?
Yes, with the help of legal techs, consumers can enforce claims against companies against which they would otherwise have little chance. And without any risk for the consumer, because we will only be involved in the amount in dispute if the case is successful. Another example is a delivery driver who was fired without severance pay. Apparently the employer thought that the man, who also hardly speaks German, either didn’t know his claim or at least wouldn’t enforce it in court. With our help and our partner lawyer, however, he was able to do this easily and without any risk of legal costs.
What is the scalability, the special efficiency in such cases compared to traditional law firms?
In software. We have developed our own software that largely automates the process from entering information from potential clients to examining the individual cases by the partner lawyers and preparing the statement of claim. With the help of our software, the lawyer only needs ten minutes to file a lawsuit against a defective life insurance contract. The wording is almost entirely taken over by artificial intelligence, which uses millions of building blocks from judgments and complaints. We know that the lawyers on the other side often need several working hours for their letters. This efficiency is one of the reasons that our lawyers can take on the huge legal departments of insurance companies.
Even if legal techs have already established themselves in some areas, the business model is still fundamentally the subject of processes. Proceedings are also pending against Helpcheck, in which an opposing party alleges that you are providing illegal legal advice.
Yes, a specific process relating to our business model is still pending and has not yet been decided. Basically, the question of what legal techs are allowed to do has now been answered unequivocally by several courts, including the Federal Court of Justice. We provide our platform, our software. Legal advice itself and, if necessary, representation in court are provided exclusively by partner lawyers.
Where do you see the limits for legal techs?
There are highly emotional legal issues for which there is no substitute for individual one-to-one advice from a lawyer: for example, in the case of divorce or child custody cases.
Max Borowski spoke to Peer Schulz