Elance I need help Taking legal action on Elance Mountain View, Internet

Elance is literally promoting Free Labor. Clients come to Elance and want to get their project done and at the end they cancel the job!

I had a client which I spent several hours working on his website design. At the end he canceled the job and refused to pay. We had no other choice than sending the job to arbitration, which is again a provided internet service from Elance. We paid $99 out of our pocket and then an arbitrator whom I believe has no knowledge on web design ruled against us!! He didn't even bother to award us the hours we worked for this client. I have every proof to show that the client is currently using our provided design on his client's website.

I am very interested in suing this client and Elance. Please let me know if anyone can help me with this.