Improving Online Improving Online Dispute ResolutionDispute Resolution

By Erin ChapmanBy Erin Chapman

What is ODR?What is ODR?

• Alternative Dispute Resolution Alternative Dispute Resolution (arbitration, mediation, or bidding) that (arbitration, mediation, or bidding) that incorporatesincorporates– InternetInternet– WebsitesWebsites– EmailEmail– VideoconferencingVideoconferencing– Instant messagingInstant messaging

• As part of the dispute resolution process.As part of the dispute resolution process.• Can resolve disputes generated online or Can resolve disputes generated online or

offline.offline.

BenefitsBenefits

• Can resolve disputes generated offline Can resolve disputes generated offline and onlineand online

• Inexpensive comparatively speakingInexpensive comparatively speaking– Save money on travel, attorney and court Save money on travel, attorney and court

costscosts

• Time savingTime saving• Parties have more controlParties have more control• PrivatePrivate• Releases pressure on the judicial systemReleases pressure on the judicial system

– ANDAND

Benefits continuedBenefits continued

• Increases access to justiceIncreases access to justice– ODR can resolve disputes between ODR can resolve disputes between

parties from different countries or on parties from different countries or on different continentsdifferent continents

– Parties can settle disputes 24 hours a Parties can settle disputes 24 hours a day, 7 days a weekday, 7 days a week

– Don’t need an attorney Don’t need an attorney

LimitationsLimitations

• It’s voluntaryIt’s voluntary• Privacy of proceedings render no Privacy of proceedings render no

precedential value-unpredictability and precedential value-unpredictability and unreliabilityunreliability

• EnforcementEnforcement• Lacks face to face disputeLacks face to face dispute• Repeat Player BiasRepeat Player Bias• Jurisdictional limitations-language and Jurisdictional limitations-language and

cultural barrierscultural barriers

Limitations cont.Limitations cont.

• Not everyone has accessNot everyone has access

Ways to deal with the enforcement Ways to deal with the enforcement limitationlimitation

• Argentina-parties to a mediation conditionally vest with Argentina-parties to a mediation conditionally vest with the mediator the additional title of arbitrator so if an the mediator the additional title of arbitrator so if an agreement is reached, the mediator can render an agreement is reached, the mediator can render an arbitral award consistent with the agreementarbitral award consistent with the agreement

• Parties put into escrow each party’s consideration in the Parties put into escrow each party’s consideration in the transaction so the escrow agent can distribute the assets transaction so the escrow agent can distribute the assets in accordance with the ODR resultin accordance with the ODR result

• Parties to a settlement agreement provide in the Parties to a settlement agreement provide in the agreement that if there is non performance of the agreement that if there is non performance of the agreement, the parties agree to have an arbitrator agreement, the parties agree to have an arbitrator appointed to draft an arbitral award according to the appointed to draft an arbitral award according to the terms of the settlement agreement.terms of the settlement agreement.

What to do?What to do?

• Binding Arbitration?Binding Arbitration?• Industry Wide procedures?Industry Wide procedures?• Create Create

ABA Task Force on E-ABA Task Force on E-Commerce and Alternative Commerce and Alternative Dispute ResolutionDispute Resolution

Final Report and Final Report and RecommendationsRecommendations

September 2002September 2002

Task ForceTask Force

• Created to propose protocols, Created to propose protocols, guidelines and standards to be guidelines and standards to be implemented by parties to online implemented by parties to online transactions and ODR providerstransactions and ODR providers

• Instill trust and confidence in e-Instill trust and confidence in e-commerce and online markteplacescommerce and online markteplaces

2 Recommendations2 Recommendations

• Recommended Best Practices for Recommended Best Practices for ODR providersODR providers

• Creation of and informational Creation of and informational entity, the iADR Centerentity, the iADR Center

Recommended Best Practices Recommended Best Practices for Providers take a for Providers take a Disclosure-Based ApproachDisclosure-Based Approach

•Disclosures should be accurate, Disclosures should be accurate, complete and consistentcomplete and consistent•Disclosures should be easily Disclosures should be easily locatable, downloadable and locatable, downloadable and printableprintable

Providers should discloseProviders should disclose

• Contact informationContact information• Their terms, conditions and Their terms, conditions and

disclaimersdisclaimers• Thorough explanation of services Thorough explanation of services

and proceduresand procedures• Support servicesSupport services

Providers should disclose basic Providers should disclose basic notions of due processnotions of due process

• Adequate notice to partiesAdequate notice to parties• Opportunity to be heardOpportunity to be heard• The right to be representedThe right to be represented• In an arbitration, an objective In an arbitration, an objective

decision based on the information decision based on the information of recordof record

Providers should disclose Providers should disclose statistics including…statistics including…

• # cases resolved, received and # cases resolved, received and pendingpending

• # cases resolved in favor of # cases resolved in favor of businesses/consumersbusinesses/consumers

• Average length of time proceedings Average length of time proceedings are pendingare pending

• Average cost to consumersAverage cost to consumers

Providers should disclose Providers should disclose limitations to accesslimitations to access

• Membership requirementMembership requirement• Claim amount requirementClaim amount requirement• Geographic location or residency Geographic location or residency

requirementsrequirements

Providers should discloseProviders should disclose

• Computer system requirementsComputer system requirements• ProceduresProcedures• Available languagesAvailable languages• Special services or procedures for Special services or procedures for

persons with disabilities or low persons with disabilities or low levels of literacylevels of literacy

Providers should disclose Providers should disclose anything raising a question of anything raising a question of impartialityimpartiality

• ODR relationship to others ODR relationship to others including merchants, trade including merchants, trade associations, referral fees, rebates, associations, referral fees, rebates, commissions, neutralscommissions, neutrals

• How neutrals are chosen and their How neutrals are chosen and their ethical guidelinesethical guidelines

Disclosing Confidentiality Disclosing Confidentiality policiespolicies

• What personal information the provider What personal information the provider can releasecan release

• Whether decisions are publishedWhether decisions are published• Whether and what proceedings are Whether and what proceedings are

monitoredmonitored• Quality controlQuality control• Record retention and disposition, Record retention and disposition,

security in online processes, security in online processes,

Providers should disclose how a Providers should disclose how a disputant can enforcement disputant can enforcement agreement or awardagreement or award

• Whether provider helps enforce the Whether provider helps enforce the agreementagreement

• Whether provider cooperates with Whether provider cooperates with law enforcement agencies so law enforcement agencies so fraudsters can be caught and fraudsters can be caught and prosecuted prosecuted

Providers should disclose the Providers should disclose the jurisdiction where complaints jurisdiction where complaints should be brought against the should be brought against the providerprovider

iADR CenteriADR Center

• PrivatePrivate• NongovernmentalNongovernmental• NonprofitNonprofit• No regulatory authorityNo regulatory authority• Free from outside interestsFree from outside interests• Funding from variety of sourcesFunding from variety of sources

iADR Center (the second Task iADR Center (the second Task Force recommendation)Force recommendation)

Goal is educationGoal is education

Theory that once consumers are Theory that once consumers are educated, they will purchase educated, they will purchase goods and services from sellers goods and services from sellers who consent to some ODR who consent to some ODR program.program.

In effect, Internet fraud, In effect, Internet fraud, nondelivery of goods decreases nondelivery of goods decreases and consumer trust in e-and consumer trust in e-commerce increasescommerce increases

iADR Center shouldiADR Center should

• Educate and familiarize Educate and familiarize government government entities, Internet merchants, ODR entities, Internet merchants, ODR providers, consumersproviders, consumers and lawyers with and lawyers with ODR by…ODR by…– Providing recommended best practicesProviding recommended best practices– Codes of conductCodes of conduct– BrochuresBrochures