Online Dispute Resolution

Introduction

Ayelet Sela published an article entitled “Streamlining Justice: How Online Courts Can Resolve the Challenges of Pro Se Litigation” in the Cornell Journal of Law and Public Policy, Vol. 26, No. 2, 2016. This is an Abstract:

“The tide of pro se litigation in the American justice system imposes significant constraints on self-represented litigants’ (SRLs) access to justice and courts’ ability to administer justice. Mitigating the challenges requires a systemic institutional and procedural reform. Advancing this approach, the Article proposes that online courts would alleviate many of the challenges associated with pro se litigation, and puts this proposition to an empirical test. To that end, the Article analyzes the challenges experienced by SRLs and courts and models the procedural and technological properties that would promote SRLs’ “day in court” as well as courts’ provision of fair and efficient access to justice. Based on the analysis and on a review of successful implementations of judicial online dispute resolution (JODR) systems, the Article proposes a detailed policy design framework for a JODR system for pro se litigation. Finally, the Article reports and discusses the results of an experiment evaluating the effect of the proposed framework on SRLs’ procedural justice experiences.”

And Jayne Reardon, in the ABA Journal’s Legal Rebels blog:

“According to the book Digital Justice: Technology and the Internet of Disputes, disputes arise in 3 to 5 percent of online transactions, totaling over $700 million in e-commerce disputes in 2015 alone. Millions are overcharged, find credit report mistakes, are hacked, subjected to identity theft or are harassed while playing online games. ODR tools for resolving disputes include substituting software-based decision-making for the exchange of information that typically characterizes the mediation process. In 2012, eBay claimed it handled more than 60 million disputes between buyers and sellers by providing software that assisted the parties to negotiate a satisfactory outcome over 80 percent of the time. Alibaba, as of last year the world’s largest retailer, generating more revenue than Amazon.com and eBay combined, handles hundreds of millions of disputes per year.

So there are a lot of disputes, but the amounts at issue are generally small, and the buyer and seller are often in different countries, aided by distributors in yet a third or fourth location. This puts notions of subject matter jurisdiction and service of process a-spinning.

That’s where technology enters the picture as a way to efficiently and equitably resolve disputes. The premise of the Digital Justice authors is that access to justice can be enabled by software and mouse clicks just as in the old days, it was affected by the hours a court was open or how distant it was located from one’s home. Experimentation in small claims online courts is happening in the United Kingdom, British Columbia, the Netherlands and spottily in the United States.

Beyond resolution, the authors challenge us to think about how people could be better served by the law if we focus on preventing the relationship from erupting into a full-blown dispute in the first place…”

Difficulties

“The main providers of justice – such as courts, legal aid boards, ministries and law firms – cannot implement online supported dispute resolution under the current regulatory regimes. Offering ODR to citizens as an independent service is an option, but it is uncertain whether it will succeed without some form of government support. Although many forms of alternative dispute resolution failed to make a breakthrough in the past, a smart ODR offering may yet be able to do this… The broader lesson is about innovation in legal dispute resolution systems. That is hard to achieve. ODR is no different from mediation, problem-solving courts, fast tracks, ombudsmen and countless other attempts to replace traditional court procedures by more innovative mechanisms. The demand for better procedures from citizens is huge. But the government institutions to which we entrust adjudication and legal aid do not have processes for implementing and scaling up innovation. Truly opening up to innovation. That should happen first.” (source: the law-tech-a2j.org blog).

UN General Assembly Resolution on ODR

On December 16th, the UN General Assembly adopted a Resolution regarding the Technical Notes generated by UNCITRAL’s ODR Working Group.

The Resolution reads, in part:

“The General Assembly:
1. Expresses its appreciation to the United Nations Commission on International Trade Law for preparing and adopting the Technical Notes on Online
Dispute Resolution as annexed to the report of the Commission on the work of its forty-ninth session;
2. Requests the Secretary-General to publish the text of the Technical Notes through all appropriate means, including electronically, in the six official languages of the United Nations, and to disseminate that text broadly to Governments and other interested bodies;
3. Recommends that all States and other stakeholders use the Technical Notes in designing and implementing online dispute resolution systems for crossborder commercial transactions;
4. Requests all States to support the promotion and use of the Technical Notes.”

Virtual magistrates and on-line dispute settlement systems

While various proposals for on-line methods of dispute resolution have been advanced, none
have so far gained wide usage. It has been suggested that, in the absence of domestic and crossborder agreements as to enforceability, procedural standards, and possibly party-based
jurisdiction, progress may continue to be slow in this area, which could become an important
factor in extensions of internet and on-line commercial systems. Application of existing
conventions, regulations or court decisions regarding arbitration, consumer rights, or related
areas of the law are largely uncertain.

Models and Examples of Online Dispute Resolution

Financial Ombudsman Service (United Kingdom)

There is a main entry about the UK Financial Ombudsman Service in the English legal enciclopedia.

Nominet (United Kingdom)

Nominet is a domain name registry company which has run the .uk domain name since 1996 and has run the .cymru and .wales domain names since September 2014. Nominet has to register .uk domain names on a ‘first-come, first-servedÂ’ basis – without examining the merits of the application. It therefore established a Dispute Resolution Service (DRS) to provide a means of resolving .uk domain name disputes without recourse to court. To pursue a claim through the DRS, complainants have to demonstrate that they have rights in a name that is the same or similar to the disputed domain name and that the registration has been abusive (for
example, the spelling of a domain name is deliberately very similar to the complainantÂ’s in order to confuse Internet users). The first stage of the DRS requires a complainant to complete a form on NominetÂ’s website. This includes specifying what remedy is being sought (the most common remedy is the transfer of the disputed domain name to the complainant).

The material submitted by the complainant is then sent to the registrant of the domain name. Nominet then appoint a mediator, who contacts both parties by telephone to seek a solution. The majority of cases settle at this stage and the mediation generally takes around two weeks. There is no cost to either party at this stage. If the case does not settle via mediation, the complainant can pay to have an independent expert appointed. The expertÂ’s decision will be based solely on the materials submitted by the complainant and the registrant. Appeals from the expert stage are permitted, but rare. Both the expertÂ’s decision and that in any appeal are published on the Nominet website.

Resolver (United Kingdom)

Resolver is a UK-based online facility that helps consumers raise complaints with suppliers and retailers. The operators of the site have populated it with the e-mail contacts of the complaint departments of over 2000 major organizations. Through a form-filling exercise and helped by the provision of standard phrases, a consumer is given online assistance in drafting a complaint. This is then e-mailed directly to the relevant complaint department. The suppliers and retailers are urged to respond to the Resolver e-mail address so that the exchange of messages can be stored on the consumerÂ’s case file that is then maintained on the site.

The service presently covers energy, telecoms, transport, loan companies, restaurants, high street shops, solicitors, and many more sectors. Resolver provides a platform through which parties can discuss their differences in a structured way. Emoticons are provided to help consumers better express their emotions. The service hold details of the escalation procedures of the 2000 organizations and guides users from first-tier complaints handling up to the highest level. Users are alerted by e-mail to any responses and are prompted to escalate when responses are not received. The service is free of charge, both to consumers and to the organizations to whom they are complaining.

Youstice

Youstice is an Online Dispute Resolution service for handling large volumes of low value consumer complaints, relating both to goods and services, whether or not the purchases took place online. There are two tools. The first enables negotiation between parties. It provides assistance in framing arguments – parties are invited to describe their position by selecting from a series of phrases, with relevant icons for each. The site also suggests suitable solutions that again can be represented by icons. A form of structured (asynchronous) dialogue can take place within a limited area for free form comment. The objective is to encourage and facilitate the parties to reach an agreed settlement directly between themselves. Using the second tool, customers can escalate cases and seek an independent review by one of a number of neutrals accredited by Youstice. Customers can file their claims either directly at the retailers’ websites or at websites of consumer organizations.

Shops are entitled to use the Youstice logo if they reach agreement on Youstice with consumers
in at least 80% of cases and they implement at least 98% of the agreements reached or of decisions by third-parties. Use of the facilitated negotiation platform is free to consumers, with Youstice earning its income from the retailers who pre-register and who display the Youstice logo in their marketing.

Online Schlichter (Germany)

The Online Schlichter is an online mediation service for Business-to-Consumer e-commerce and direct selling disputes. It has been run by the German-French European Consumer Centre (ECC) in Kehl/Strasbourg since 2009 and has been financed by the Ministry of Justice/ Consumer Protection of six regional governments of Germany. Its aim is to increase access to justice and reduce the number of cases reaching the regular courts. It has also received funding from legal insurance and standard bodies (Trusted Shops and DEVK) and the direct selling association, a membership body (Bundesverband Direktvertrieb). The service is free for both parties and the mediators/advisors are independent lawyers at the ECC. There is considerable emphasis on analyzing the case from the start and providing both parties with legal advice and evaluation of their legal position, thereby correcting any unfounded expectations about their rights.

This online advice is partly automated by using textual building blocks and decision trees. This up-front advice and evaluation often helps to achieve early settlement. The mediator makes a non-binding recommendation. In about two-thirds of all cases both parties accept the recommendation and the case is settled accordingly. In 2014 around 1500, cases were filed with the Online Schlichter (1142 in 2013, and 859 in 2012). The average duration from filing to acceptance of the recommendation is 60 days. About 28% of cases deal with the non-delivery of goods, 21% of cases concern defective goods, and 17% of disputes concern consumers withdrawing from a contract. Its high settlement rate attests to the success of this technique for small claims.

Rechtwijzer 2.0 (Holland)

Rechtwijzer 2.0 was developed for the Dutch Legal Aid Board by the Hague Institute for the Internationalisation of the Law (HiiL). The service is provided by the Netherlands Ministry of Justice and Security. It is designed to help parties resolve disputes through a process that takes them from problem diagnosis, through facilitated, Q&A-based framing of their case, to problem solving and assisted negotiation and, finally, to various forms of online ADR (alternative dispute resolution). To assist in negotiation, the process provides automated legal guidance, based on the answers parties have given during the Q&A session. The first service, now live, is for matrimonial disputes, including divorce and ancillary matters, such as custody and maintenance. Landlord and tenant and neighbour disputes are planned for the future. The ADR phase is reached on failure of the parties to reach a resolution by themselves. This takes the form of online mediation or arbitration. The process takes place online on a secure and confidential platform, designed for asynchronous dialogue. The platform enables the mediator to engage in separate confidential discussions with each party, consistent with normal mediation practice. Finally, as a ‘fail safeÂ’ against a resolution being reached that does not satisfy the criteria of ‘fairnessÂ’, agreements go before an independent lawyer for confirmation.

Canadian Civil Resolution Tribunal (Canada)

The Civil Resolution Tribunal is an online tribunal that is due to be launched in the summer of 2015 in British Columbia, Canada. It is a public scheme, regulated under the Civil Resolution Tribunal Act 2012. The online tribunal will be available as an alternative pathway to the traditional courts for resolving small claims through a process that is expected to be more convenient and less costly. It will deal with claims (under 25,000 Canadian dollars) relating to debts, damages, recovery of personal property, and certain types of condominium disputes.

It will not handle disputes affecting land. The online tribunal will operate in several stages. In the first instance, the facility will help users explore possible solutions. Then, parties will be required to use the tribunalÂ’s online negotiation platform, which is subject to short timelines and supported by templates for statements and arguments. If a settlement is not reached, then a tribunal case manager will be appointed to assist the parties to settle their dispute through a mediation process that will take place online or over the telephone. If parties do not settle by this mediation process, they will then be invited to agree to a third and final stage of adjudication. The adjudicator will contact the parties via the online platform, over the phone, or, when necessary, through videoconferencing, and then will make a decision that will be final and binding.

Cybersettle (United States)

Cybersettle, based in the United States, developed software to provide ‘blind biddingÂ’ services. This is a process designed to speed up negotiation when all that is in dispute is how much is owed. In broad terms, the claimant and defendant each submit the highest and lowest settlement figures that would be acceptable to them. These amounts are not disclosed but if the two ranges overlap, a settlement can be achieved, the final figure usually being a split down the middle. It is claimed that Cybersettle handled over 200,000 claims of combined value in excess of $1.6 billion, and that the City of New York used the system to speed their settlement process for a backlog of 40,000 personal injury claims. More than 1,200 claims were submitted and it is claimed that there was a 66% settlement rate within 30 days of submission, savings in litigation costs of $11.6 million, with an average reduction of settlement time of 85%.

Similar systems have been developed in the past, such as The Mediation Room in the UK. However, when Cybersettle obtained a worldwide patent, some competing systems closed down. While the current status of Cybersettle is unclear, a new blind bidding service, TryToSettle.com, was launched in 2014 in the USA, under a licence granted by Cybersettle. A Canadian company, SmartSettle.com, offers a simpler staged bidding version of blind bidding.

Modria (United States)

Modria is a spin-off from the Online Dispute Resolution departments of eBay and PayPal and was formed by the head of those departments, ODR pioneer, Colin Rule, who led the team that built the online dispute resolution system that is used so extensively by eBay (see Paragraph 4.2) and PayPal. Modria provides a cloud-based platform on which businesses and public bodies can customize and build their own ODR services. It supports various ODR methods, including diagnosis, negotiation, mediation, and arbitration, and also offers a configurable case management and workflow system that handles case intake, document generation and management, scheduling, reporting, and status messaging.

By using Modria, therefore, governments need not design and develop their own ODR technology. Modria has ISO 27001 certification for information security and its processes and technology resolve hundreds of thousands of disputes each year, for clients such as the American Arbitration Association (road traffic accident cases), the Dutch Legal Aid Board (Rechtwijzer), Marketplaats, and leading e-commerce and payments companies.

Traffic Penalty Tribunal (United Kingdom)

The Traffic Penalty Tribunal (TPT) of England and Wales has recently launched a web-based portal BECK (Best Evidence Cloud Knowledge), for use by appellants, respondent authorities as well as the adjudicators and administrators. The Portal enables appellants to appeal, upload evidence and follow cases and hearings under one evidence screen and account. Likewise, each authority has a dashboard showing current cases, enabling them to submit evidence, comment, and follow progress of hearings and decisions. Appellants create an account and receive all notifications by email. They comment on evidence, request their preferred hearing type and follow progress of the case through to the decision, viewed online. Their dashboard displays the status in each case, prompting actions. The TPT administrators, who no longer data-input, now focus on customer service, for example, ‘offlineÂ’ appellants phoning for a form or help. TPTÂ’s workload, which will shortly increase by 30%, will be administered by the same staff numbers with reduced case closure times. Adjudicators can manage their own caseload, send directions to parties, and easily see uploaded evidence, including videos, which is also displayed to all parties. At telephone conference hearings all participants can view the same evidence, guided by the adjudicator.