Has Online Dispute Resolution Got a
Future?
[discussion on ulcc_ecomm-l
electronic mailing list April 2009]
1.
Gregory,
John D. Sent: April
20, 2009 4:32 PM Subject: has
online ADR got a future?
Every
few years there is a wave of enthusiasm for online alternative
dispute resolution. One can see one starting in the mid-1990s, and
another in 1999-2000, and maybe a wavelet in 2004 or so. Some
international bodies are thinking about it again, according to
discussion at the ABA’s Business Law spring meeting over the
past weekend.
Osgoode
Hall Law School has just got a major gift to set up an online ADR
centre, the largest in the world, according to the press story,
here: http://www.yorku.ca/yfile/archive/index.asp?Article=12327 .
Can
this be made to work? I know that pure numbers-based saw-offs
can be automated, but can one get beyond that? Is the dispute
resolution practice of WIPO or CIRA for domain names a useful
precedent? eBay used to run Square Trade – did that not
die? Fade away? (maybe it’s thriving…) How about
the Better Business Bureau’s bbbonline?
I’m
a believer in ADR generally, both mediation and arbitration (which
are quite different in principle) but remain to be persuaded that
they have widespread application online.
Want
to persuade me (and the rest of the list)? What principles am I
overlooking, what successes am I ignoring?
John
G
John
D. Gregory
2.
One key
to a successful mediation is communication, including body language,
between and among the parties. I think unless the online ADR
process includes cameras that allow everyone to see everyone else
(maybe excluding the mediator), there may be a risk of
misinterpretation of the verbal messages being sent back and forth.
That said, maybe the body language would reveal things that may
prevent the resolution.
3.
I agree with comment
# 2 that online ADR risks losing important information that can only
be obtained or exchanged in face-to-face hearings (mediation or
arbitration). I would add that even the testimony itself is
likely to be different because witnesses can testify with
considerably different nuances when they have to face their
adversaries, and equally important, when they have to face the
arbitral panel. I think there would be an increased likelihood
(in the US in any event) of diminished candor and
that cross-examination would also be less effective. I
think that video is no substitute for face-to-face hearings, and is
best at recording what occurred in a face-to-face hearing, but should
not be relied upon beyond that.
4.
I concur with # 2 and # 3.
Online ADR works only where the premise is that the issue is simple,
the facts are straightforward, there is no x-exam or discovery of a
witness in an arbitration, the human dimension of the parties and
others is irrelevant, the result is not intended to be nuanced, etc.
The
domain name dispute resolution systems all ignore real world matters
away in the interest of speed, simplicity and cost, and are directed
to a transfer/not transfer decision.
But
as lawyers know, we can even assume the facts or anything else away
to make something simple.
5.
As a regular participant in
many forms of ADR and litigation, it strikes me that on-line ADR is
likely appropriate in the same very very few circumstances where
purely paper-based ADR works well.
ADR
by telephone, while not nearly as robust as in-person ADR, often
works reasonably well for mediation and is in frequent use where the
parties are geographically separated or the key decision maker is a
big shot and realistically will not attend the mediation in person.
The
next step up, video hearings/mediation, have improved to the point
where, in my view, they are an important choice in the selection of
ADR tools. I have done cross-examinations by video conference
in High Definition and they worked quite well. In one case
before a judge (the courts are increasingly users of partial video
hearings), the judge commented that he liked being able to watch the
witness during cross by video-conference (I was live and witness was
overseas) because the upper third of the witness’ body filled
the screen, the judge did not have to turn his head to see the
witness on the witness stand (usually the stand is to the side of the
judge and not right in front where one puts the TV), and it was
easier for him to watch the witness and take notes at the same time.
For
a really useful, on-line ADR tool, we would need a large screen
application that includes multiple video feeds, documentary display,
and huge bandwidth. No doubt such a tool will grow out of the
cooperative on-line meeting systems slowly being rolled out for
business. All that would be missing are the usual ADR drinks
and stale cookies...
6.
Further to # 5’s
comments on video conferencing, I note that ADR Chambers in Toronto
has launched an online video mediation service.
http://adrchambers.com/ca/mediation/eVideo-mediation/
I
have not used it, but it does seem to have the interactive features
that are essential for effective mediation, as long as everyone
has adequate bandwidth and there are no technology glitches. It
would be interesting to try it and see how it works in practice.
7.
[JDG] For a collection of
resources and links to others about online dispute resolution, one
can look at www.odr.info
.
It
describes among other things the contents of the 7th
annual ODR forum, held in Victoria. (U Vic has had a distinguished
program in dispute resolution for many years.)
………..
The
7th Forum
consisted of two days of plenary sessions and breakout sessions. The
Forum assembled the world's leading practitioners, academics,
students, and civil society to discuss the resolution of disputes
using online technologies. These disputes may range from b2c
(Business to consumer) to the prevention of human rights violations
in conflict regions, to reconciliation of opposing groups in armed
conflict, to disputes over intellectual property on the internet. It
also included the leading technology developers who design conflict
resolution platforms for use legal, commercial, or insurance related
disputes (i.e. PayPal).
………….
The
8th
such forum is being held in Haifa in June of this year (2009)
Ontario’s
auto insurance regime has been using telephone mediations for years
between those injured in auto accidents and the insurers.
So:
what IS ODR? DR using any technology at all, from email
to video conferencing? Is there anything special about the
medium used?
Does
anyone on this list know just what Osgoode Hall L.S. intends to do at
its new online ADR Centre?
8.
As a further follow-up, I
checked my limited notes and talked a bit about this with XXX who had
been more involved than me. I also looked at the OAS website
and here's the decision on "consumer protection" issues for
CIDIP VII:
The
Delegations agreed that CIDIP-VII work on consumer protection would
produce a Convention on choice of law as well as a Model Law on
monetary restitution: the Convention would provide a system for
determining rules for consumer litigation, while the model law would
complement that instrument by focusing on practical mechanisms for
redress when litigation does not provide cost-effective solutions. As
a result, these two instruments working in unison will comprise CIDIP
work on topic one covering the most relevant aspects of consumer
protection in the Americas.
http://www.oas.org/dil/CIDIP-VII_topics_cidip_vii_consumerprotection_introduction.htm
There
seem to be several topics under consideration including, as you
noted, jurisdiction. Jurisdiction, particularly for e-Commerce
issues, was the Canadian proposal. But Brazil and the US have
moved in somewhat different and broader directions including a
possible Model Law and a Convention. The page at the above link
has further links to the documents under discussion in the various
areas, i.e., jurisdiction, applicable law, and monetary restitution.
At
one point in the discussions last year, there was a 'model' for an
online dispute mechanism floated but it was quite complex and, some
felt, potentially expensive. Some felt that a much more
simplified approach would be appropriate to the extent that many
cross-border 'consumer' disputes were likely to have small financial
sums involved. I don't recall if a simpler approach has been
proposed (XXX didn't either) or whether this has now been
incorporated into the possible Model Law. But it does appear
that ODR was at least being discussed for CIDIP VII at some point.
And since no one has posted anything about it on the list,
perhaps it's died or at least faded farther away. In any event,
I just wanted you have this background.
9.
I wrote my LLM thesis on
this subject in 2001, more particularly, on ODR for international
consumer transactions. I did not publish my thesis, so it is
not easily accessible.
The field has evolved since, but I
believe certain observations still hold true. ODR offers the
following advantages over traditional forms of offline dispute
resolution:
(1) It is (or can be) relatively inexpensive, and
provides disputing parties with access to dispute resolution /
remedies when it would otherwise not be cost-effective to do so. For
example, a consumer in a cross-border transaction with a $200 dispute
(or even a $500 dispute) will conclude that it is not cost-effective
to seek legal representation, litigate and travel to the state of the
merchant to seek his remedies. So without ODR, this consumer
has to rely on other remedies such as credit card chargeback, but
that is not universally available. In the absence of an
effective dispute resolution service, the consumer will likely avoid
merchants that are not well-known (not "trusted"), and
prefer more "trustworthy" merchants. This acts as a
dampener on e-commerce.
(2) Using technology (software), ODR
offers certain dispute resolution techniques that are not available
offline. For example, blind bidding, where the 2 disputing
parties disclose their offers and bottomlines confidentially to the
system, and the system will declare a settlement if the offers and
bottomlines are within a predetermined percentage of each other. If
there is no settlement (e.g. the bottomlines are too far apart), the
system will maintain the confidentiality of the positions disclosed
solely for the purposes of the blind bidding exercise. I
believe SquareTrade used this technique. This also offers
greater neutrality of the mediator (the software) since no human
being is involved.
The key issue that will determine whether
any ODR service is effective and well-utilised is enforceability of
the result. That's the main reason why the ICANN UDRP is
well-utilised - the results are enforced in a binding manner.
10.
Very good observations by # 9.
My
[governmental] organization experimented with ODR earlier in the
decade. Our program includes handling 55,000 calls and
complaints per year on consumer issues/disputes with business.
Mediation is voluntary, but respondents are acutely aware that they
are dealing with a government agency with enforcement powers and I
think that the effectiveness of moral suasion and early neutral
evaluation in our approach is stronger because of that. That
being said, we did not include in our analysis any file in which the
statute/regs provided an automatic remedy (e.g. business failed to
provide refund of deposit when consumer exercises statutory cooling
off right within the prescribed period, fizx the proven mistakes on a
credit history file) and of course we excluded files in which
allegations of serious consumer law violations arose. We also
have to manage a "crank factor" involving the baseless, the
frivolous and occasionally the malicious complaints.
The
range of issues is very wide – disputes over home reno/repair,
car repair, lawn car, retail sales (especially furniture), fitness
club memberships, and in one memorable case, an online “institute
of transcendental karmic yoga” operating out of St. Paul (we
mediated a full refund for consumers bent out of shape). Dollar
values relatively small -- although perhaps not to many of our
clients – usually in the hundreds or low thousands of dollars.
Our
ODR was really shuttle diplomacy for the most part, with the
disputants feeding in e-mails to mediators and our mediators
communicating with respective parties the same way. The
consultant called it “mediated asynchronous communication”.
Real-time online communication occurred in about 8% of cases -- when
it did, resolutions were very good. Perhaps only these “live”
online exchanges are really "online" DR.
ODR
did not "take off" as a method of choice because our
consumer customers demonstrated a decided preference for filing a
complaint form and having our staff do shuttle diplomacy by
telephone. Smaller business respondents felt much the same way,
but bigger businesses (large enough to have complaints depts) as
expected endorsed ODR readily. In fact, businesses agreed more
often (just shy of 85% of the time) to participate in ODR than in
"regular" mediation (just over 50% of the time).
A
lot of our complainants and a surprising number of businesses did not
have e-mail addresses, at least not that they wanted to share with
the government. This is not an issue for regulators who have an
online e-complaint mgmt system which enables disputants to go online
and enter the ODR process w/o providing e-mail addresses. A
partner regulatory agency that was part of our project confirmed
this.
Resolution
rates were much higher for ODR than for our control group of cases
from the “phone/letter pool”. This may have to do
with the fact that the persons who volunteered for the ODR project
tended to be keeners with skills above the larger team average.
However, we also felt that the opportunity to exchange written
positions thru a mediator seemed to encourage disputants to organize
thoughts better, temper their comments etc – and the ability to
fire attachments with, say, photocopied contracts or photos of damage
was really well-liked.
As
for "blind bidding", we had it on the menu but my staff
were reluctant to suggest it. To be fair, many of the
resolution outcomes desired by our clients do not involve getting
money back (stop billing me! cancel the contract (no deposit)!
give back that item I left for repairs! I don't want my money
back -- just start the job! move my mom to the correct burial
plot!). Because our mediation is wholly voluntary,
confidential and w/o prejudice the parties are incented to be
reasonable with their bids. Our customers want to know more
about "why?" and we find that people who come to the
government are looking for a rights-based as opposed to
interest-based resolution -- and can register considerable
disappointment when we don't simply order and force a business to "do
the right thing". I have observed, though, that
interest-based mediation becomes more attractive to people who
discover they don't have the rights they thought they did :-)
Just
some random thoughts from experience.
11.
On the Osgoode mention, I
wanted to clarify that the new centre is not about online ADR at all,
it is really about a physical space. There will be an e-court room,
which means they will use computers and other electronics but will
still be physically in the room. There will also be actual ADR rooms
that may employ technology. See below from the story:
The
facility – which will be named, subject to University approval,
the Paul B. Helliwell Centre for Innovation in Dispute Resolution –
will employ the latest in technology to assist law students,
researchers, courts, mediators and arbitrators in exploring new ways
to resolve disputes. In addition to being a laboratory where
researchers will examine different dispute resolution environments,
it will also feature actual court sittings (including Ontario Court
of Appeal sittings) and other forms of dispute resolution activity,
both within Canada and internationally.
12.
The Osgoode project sounds
interesting and promising.
Just
to digress and get back to the present a bit.
Sorry
if this has been mentioned before.
One
tool that I have found quite useful and under-utilized is the
possibility of video hook ups for court proceedings. The Federal
Court now does this routinely for motions, although there are
frequently some technical glitches - which can be trivial or
potentially serious in consequence. Fortunately, they've never been
serious for me.
In
a matter of any serious complexity where oral argument is
appropriate, it's potentially important for the adjudicator and the
counsel to "see" and hear each other. Travel costs
and time can be an enormous and unnecessary burden even on parties
with lots of money.
As
web cam and video conferencing becomes cheaper and more
reliable, I'd certainly like to see more of it in play.
With
this new technology, nobody need leave their office - as long as each
party and the court/arbitrator or whoever have
compatible systems.
There's
no reason by this couldn't work in ADR - I suspect it's already in
play.
The
cost could be close to or even "free" based on Skype and
presumably other technologies already out there. There is no longer
any need for expensive telephone hookups. I'm sure people would be
happy to pay a reasonable premium over "free" for enhanced
bandwidth to enable HD like video and quality sound, and other
bells and whistles such as document presentation, etc.
13.
I just read # 11’s
email to the list and it seems that great minds think alike. The CRDP
(Centre de recherche en droit public) has been working on a very
similar project for 4 years now, and construction is set to begin
shortly. The «cyberjustice » laboratory, as it is called,
will be an e-courtroom where University on Montreal and McGill
University students, as well as lawyers from across the country and
the world (it has agreements with France and the US) will be able to
test and help develop new technologies to hopefully make the legal
system more efficient. All Quebec courts are also on board.
Where
the project seems to differ from Osgoode’s, though, is that it
plans to also build a computer lab where researchers and programmers
will work to develop the next generation of court software, as CRDP
had done in the mid 90’s with ODR.
It
has received major funding from both the Quebec government and
Ottawa. If all goes well, it will be operational in early 2010.
Hopefully, the two centres will be able to collaborate on certain
projects since I think we can all agree that there is more than ample
work in this field for everybody.
14.
The ADR Chambers’
e-mediation:
http://www.adrchambers.com/uploads/emails/evideo/email.html
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