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ONLINE DISPUTE RESOLUTION
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Creative processes that solve disputes without turning to litigation have existed for many years. Candidly called “Alternative Dispute Resolution”, the three general methods that have emerged and developed in the past two decades are negotiations, mediation and arbitration. More recently a fourth approach is being put to the test, which combines one or all of these forms of ADR with the technology revolution, fondly called “Online Dispute Resolution”. Although ADR and ODR are superficially sound ideas, the perceived worth of ADR methods have yet to triumph over traditional litigation. Why is this so? Moreover, moving the ADR process online brings with it not only the same disadvantages, but new ones as well. This paper will address some of the fundamental concerns and problems that may come to undermine the potential of “Online Dispute Resolution” (ODR) however, it will also suggest some very bona fide niches where ODR may excel if properly marketed. By providing a properly marketed ODR program within the proper niche, an argument citing the lack of “critical mass” can be overcome and ODR’s viability may be concretely established. traditional adr methods Before we investigate the intermingling of ADR and technology, it may be prudent to review some rudimentary principles associated with traditional ADR processes. Negotiation Negotiation is by far the common form of dispute resolution. Negotiations can be entered into at almost any stage of almost any given conflict. And is loosely defined as a communication process that people use to plan transactions and resolve conflict. Through the process of negotiation the individual parties gradually may be able to come together into coordination and collusion and, in the end, to some agreement on the issues between them. Mediation Mediation utilizes the assistance of a neutral party for the exchange of information. Richard Hill, who uses the simple example of an orange, presents a favorite illustration. “Two people both have a legitimate claim to an orange and neither is willing to accept half of the orange. If the claim is resolved in accordance with a judicial paradigm, one person will get some portion (possibility none) and the other will get the remaining portion. But the people call in a mediator, who asks each person what they intend to do with the orange. The first person answers that she intends to use the rind to make perfume, while the second answers that she intends to use the pulp to make orange juice. The mediation process yields a solution that is fair and that better satisfies the interests of each party. This result is better than any solution ensuing from the adversarial process” Generally mediation is considered relatively informal. The neutral party gives no opinions, takes sides or issues a course of action. Arbitration Arbitration is a word that maintains a fair amount of notoriety. Arbitration clauses are increasingly finding their way into many contracts. Often in arbitration, a single arbitrator is chosen from a panel of individuals collectively chosen by the parties. The overlap becomes the selected arbitrator. An arbitrator then meets with the parties to establish the facts and the applicable law. Arbitration may be binding or non-binding but a binding agreement is enforceable. Because they are so similar, the potential of “ADR clauses” becoming “ODR clauses” may be a genuine possibility. advantages of adr The rewards of ADR processes are numerous. However, four main advantages permeate our stated ADR methods. Speed. The exchange of information as well as the court system all lends itself to a litigation process that moves slowly. Often Attorneys have incredible scheduling conflicts if a meeting needs to be scheduled or a follow up needs to be done. ADR helps streamline the process and usually eliminates court related benchmarking. Cost. Because ADR is more time efficient, it costs less than litigation (This will be a strong point of interest later on). Costs may vary, but in general are known to be about 1/3 the cost of litigation -often times much less than this. Confidentiality. A major perk for companies using (and getting away with) arbitration clauses is the fact that, disputing parties are whisked away into “ADR land” and out of the public court system. Embarrassing information, settlement negotiations and legal precedent is all held in the confines of ADR. Because information is confidential, companies wishing or needing to maintain their relationships can do so without the typical “posturing” that public scrutiny facilitates. Flexibility. ADR processes enjoy procedural and result-oriented flexibility. ADR facilitators can “custom build” procedures that match the comfort level of each of the parties. Additional neutral parties can be introduced, and the parties may often have the ability to decide whether the decision will be binding or non-binding. Lastly and significantly, ADR facilitators may not be bound to follow the Stare Decisis principle and unlike common law judges, can easily make a decision based on a new or expanded interpretation of the law. disadvantages of adr The foremost disadvantage ADR processes continue to experience is the lack of familiarity of ADR in general.
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