Accelerace invests in SmallClaims, a full-service legal tech platform that automates small claims processes
.,
Accelerace invests in SmallClaims, a Denmark-based legal tech startup that specializes in automating small claims processes (so no attorney is needed) and unlocks a latent market of about 50 million claims below 5000 EUR.
Attorney costs outweigh the claim itself
Imagine that you run a company that has not been successful in recovering accounts receivables (by yourself or through a debt collection process), and your last resource is to recover the claim through the judicial system. For claims of accounts receivables, the cost of using traditional attorneys is about 25 000 DKK per case — a cost that outweighs the claim itself, meaning that you will feel forced to give up the claim.
This is the problem that SmallClaims is solving. By using machine learning and data to evaluate, generate and submit the case to a court, SmallClaims enables a profitable recovery of these (small) legal claims through software-based automation of lawsuits:
“We want to empower both consumers and businesses to pursue small claims which until today have been too expensive to pursue due to high legal cost. It is our ambition to become the leading company for claims processes involving court interaction.”
Christian Olson, Co-founder and CEO at SmallClaims
Digital justice will transform the court systems
Numerous industries are experiencing a growing number of bad debtors, and the developments in consumers’ preferences (e.g. ‘buy now, pay later’ and subscription economy) result in more and smaller claims for both companies and private individuals. Digitization and automation of the claims processes will democratize access to help.
Luckily, most of the courts in Europe are gradually becoming more digital and are offering application programming interfaces (APIs) to third-party software solutions. SmallClaims takes advantage of this shift in the technology infrastructure of court systems:
“SmallClaims contributes to the United Nations Development Goal number 16 by providing access to justice for people and companies that have legitimate claims but cannot afford an attorney or because of a non-transparent judicial process.”
Christian Olson, Co-founder and CEO at SmallClaims
In the Accelerace terminology, SmallClaims has strong ‘Beta’ (meaning a rapidly growing market) and unlocks a latent market of about 50 million claims below 5000 EUR.
Removes the need for attorneys in small claim processes
Christian Olson was working as an attorney-at-law within litigation and technology law when he noticed a recurring problem and a desperate need for automation. His clients were often forced to give up on a claim and lawsuit, despite high chances of winning them, because the attorney fees were higher than the claim itself:
“The idea came when I was working as a litigating attorney and often had to advise clients to give up a claim and lawsuit – even though it could have been won – because my attorney fees would be higher than the claim itself. Through digitization and automation of the claims process involving court interaction, I saw a possibility to remove the need for attorneys even in processes within the court system making it possible to pursue small claim cases profitably.”
Christian Olson, Co-founder and CEO at SmallClaims
Christian co-founded SmallClaims together with CTO Andrés Angulo, a programmer with over two decades of professional experience and a former lead developer at startups such as Dexi.io and Billy.