There are many legal issues surrounding the topic of Online Dispute Resolution (ODR). However, this assignment focuses mainly on what I considered to be a more fundamental issue - what potential does this technology have for helping us humans solve disputes? I hope you find it interesting.

ODR can be broadly defined as any form of dispute resolution that makes use of the Internet. Beyond this, there are many possible forms that ODR can take. For example, ODR may be a modified form of any of the traditional ADR processes: negotiation, mediation, and arbitration. An ODR system may simply use the Internet as a glorified fax or telephone, to communicate evidence and arguments; or it may use the information processing resources of the computer to facilitate a solution. An ODR system may be limited to resolving only online disputes, i.e. those that came about through online interactions such as e-commerce and domain name trademark infringement, or may resolve traditional offline disputes.


To get an idea of some of the promises and pitfalls of ODR, read pages 29-36 of Rabinovich-Einy, Orna, Balancing the Scales: The Ford-Firestone Case, the Internet and the Future Dispute Resolution Landscape, Yale Journal of Law and Technology, Vol. 17, 1-57 (2003/4)

 For some grounding, take a look at two current leaders in ODR, SquareTrade and CyberSettle.

  • is an automated, direct negotiation system with optional online mediation. It is used largely for disputes between buyers and sellers on Ebay. To date, it has been used to resolve over 1.5 million disputes. It is optional for both parties to participate, but Ebay directs disputants towards SquareTrade. For some general background on SquareTrade, and to view a sample dispute resolution, read this article by the CEO of SquareTrade, paying particular attention to pages 8-15: Building Large-Scale Online Dispute Resolution & Trustmark Systems (pdf).


    Particularly note how SquareTrade attempts to guide the negotiation by presenting options for complaints and solutions. Of course, according to this article (don't read), Online Dispute Resolution: Some Implications for the Emergence of Law in Cyberspace, Lex Electronica, v. 10, no. 3 (2006) at 5, almost all Ebay disputes fit under 8 to 10 different categories. Thus the database of possible disputes and resolutions is likely not that large.


    To get a sense of what it is like to mediate over the Internet, skim through one or two of these Ebay mediation transcripts.

  • is the second largest ODR system with over 150,000 disputes resolved. It targets bodily injury insurance claims, but is also now in use by New York City to resolve its personal injury cases. The target users are plaintiffs' attorneys and insurance claims adjusters. It is simply a blind-bidding system that allows each side to enter three monetary offers/demands for settlement. If the parties are close enough, the system notifies each party of the settlement amount, otherwise neither party is informed of the other's bids. 

    To get an idea of their value proposition, take a look at this article about New York City using CyberSettle.


    Questions: Recall your Legal Practice negotiation exercise, or any other negotiations you have participated in. Where does CyberSettle fit in with principled negotiation? Would you advise a client to allow you to use this system in their dispute? What exactly does CyberSettle offer over just making a phone call? Is CyberSettle a good trade-off between efficiency and fairness? What does this say about the efficiency of the legal system in general? CyberSettle claims that there is nothing to lose, is this true?


    ODR Limitations: 

    Arguably, the above successes in ODR systems are quite limited in their scope. Given that ODR lowers some of the transaction costs of resolving disputes, e.g. transportation, scheduling conflicts, meeting facilities, why hasn't there been a move to resolve more disputes online?

    The following two papers demonstrate some limitations that can occur when there is a computer dividing the disputants.


    Read this paper describing how attempting to resolve disputes online may actually cause more problems. Raymond A. Friedman and Steven C. Currall, E-Mail Escalation: Dispute Exacerbating Elements of Electronic Communication, MIT Sloan Management Review, Vol. 44, No. 1, 14. (Fall 2002). 

    Note, the figures are at the end of the document.


    Questions: It seems that negotiation and mediation over the Internet would be particularly susceptible to these limitations, how does SquareTrade avoid this issue? Can their solution be extended to other types of disputes?


    Read: Ethan Katsh and Leah Wing, Ten Years of Online Dispute Resolution (ODR): Looking at the Past and Constructing the Future.  In particular, note the description and results of the use of an ODR system to assist in mediating offline problems starting at page 13.


    The (Near?) Future:

    Perhaps the true benefits of ODR will come not from new modes of communication, but from more rigorous use of the computer's information processing capabilities. Read this Boston Globe article about the coming intersection of AI and Law. Note, the site may ask you to register, you can use this login info: username: password: internet1


    Some of the work of the computer scientists interviewed in the article is described in more detail in this paper: Emilia Bellucci and John Zeleznikow, Developing Negotiation Decision Support Systems that Support Mediators: A Case Study of the Family_Winner System, Journal of Artificial Intelligence and Law, Volume 13, 2006. Much of the article is a description of the inner workings of the computer program, which is not important for our purposes. But, to get a sense of the system, read the Introduction (pages 233-236) and Section 7.3 (pages 258-262).


    Questions: What is your reaction to this system? Specifically, does its formality make you think disputants would be unwilling "to concede ‘control to a model.'’’ In what contexts would this type of system be useful?


    Broader questions to ponder:

    What are the characteristics of disputes that are amenable to online resolution? Are different types of ADR more amenable: negotiation vs. mediation vs. arbitration?

    Do some types of disputes or legal services benefit more from face-to-face meetings between the parties?

    For arbitration, what about judging the credibility of witnesses?

    Is the lack of face-to-face contact an insurmountable limitation, and will thus relegate ODR to a few very specific types of disputes? Or with the benefits of ODR outweigh its limitations?


    Some final food for thought:

    If clients begin to accept the idea of obtaining legal services over the Internet, will that accelerate the rate of legal outsourcing and expand areas of law it touches?


    Currently, if you have a cross-border ecommerce issue, you can submit your complaint to Law enforcement officials from 13 nations are participating in the program. Of course, don't expect them to actually help you, this is mainly for trend spotting. Instead, they advise three methods to resolve a dispute (click the Ways to Resolve Your Complaint tab). Are these methods, Trust Seals, Payment Card Protections, and ADR, sufficient? Is there a need for an international standard to resolve ecommerce disputes?


     Return to the syllabus.