ODR: Online Dispute Resolution Explained

ODR: Online Dispute Resolution

Online dispute resolution can be a useful tool when facing a dispute where it is difficult or impossible to get the parties together to participate in dispute resolution. Online dispute resolution takes a variety of dispute resolution mechanisms and uses technology to help achieve a resolution online.  It primarily focuses on negotiation, mediation, and arbitration, but it can also be a way to implement other types of dispute resolution across technology to help find a solution that everyone involved can agree on.  A perk of using online depute resolution is that there are constantly innovative techniques and technologies to use to help find common ground.  It can be used for a wide variety of disputes and is particularly well-suited for certain disputes, such as e-commerce.  This new and developing way of solving the toughest disputes is an area worth exploring further, especially for those involved in the alternative dispute resolution world. 

This article will explain what online dispute resolution is and some of the disputes that it can be helpful for.  Next, it will run through the methods that may be implemented in online dispute resolution spaces to help the parties resolve disputes.  It will also discuss some court systems that are implementing online dispute resolution and how that model could be used in other courts.  Finally, it will end with a discussion of the benefits and drawbacks of online dispute resolution to help parties and systems make wise decisions about the implementation of online dispute resolution.  

Defining Online Dispute Resolution: 

Online dispute resolution (ODR) is the use of technology and online methods to help avoid and resolve disputes.  This includes a variety of software and apps that are designed to help manage disputes as well as forms and programs online used during in-person resolution.  It even includes using online platforms like Zoom or Cisco WebEx to host dispute resolution processes and meetings.  With this definition, it seems that much of the alternative dispute processes could be included in online dispute resolution.  However, the distinction lies in the use of information and communication technology to resolve disputes and the portion of the overall dispute that is conducted online.  If a dispute is resolved mostly through online platforms, it will be considered a dispute settled by ODR.  

Online dispute resolution began with the introduction of information and communication technology to the alternative dispute resolution process. There is some confusion with what qualifies as online dispute resolution, but the use of information and communication technology is the true mark of online dispute resolution, especially if it is the driving factor in the resolution.  In fact, some theorize that in true online dispute resolution, information and communication technology becomes a fourth party, rounding out the parties with the litigants and the neutral.  It creates another element to the dispute resolution process that is not present without it, and it can help achieve resolution by sending responses, shaping communication by editing it to keep the conversation cordial, or even scheduling and monitoring the performance of the parties and the neutral.  In some cases, such as automated negotiation, the technology may be third-party neutral as well. The key to resolving disputes with online dispute resolution is the presence of this fourth party—information and communication technology—to drive the resolution process.    

Methods of ODR: 

There are several kinds of dispute resolution that can be attributed to online dispute resolution.  These methods are separate from other assistive technology such as apps like Out Family Wizard, which helps parents discuss and plan co-parenting activities and remain cordial and effective in communication.  ODR methods are actual resolution mechanisms that are conducted through the use of some technology to specifically resolve a dispute.  They can be divided into two categories, party-driven and adjudicative.  

Party-Driven Methods: 

Party-driven methods rely on the parties to resolve and consent to a resolution.  This means that they must agree on an outcome or the disagreement will move into other forms of dispute resolution.  These methods depend on the participation of the parties and their consent to the eventual resolution.  These methods include: 

  • Automated Negotiation (Blind-Bidding Service): Automated negotiation is a program that gathers information from the parties and helps them to move together into a zone of agreement.  It is only used in determination where no liability is challenged and is often used in insurance compensation and commercial activities.  It allows participants to bid based on what they would like to see as a result but keeps information hidden until an agreement is reached.  It can help parties find an agreement without having to challenge each other in person. 
  • Assisted Negotiation: Assisted negotiation will often be a form of mediation that is used in ODR.  It is a program where the technology assists the parties in reaching an agreement by providing advice and helping reframe communication to help encourage negotiation, rather than cause a rift between the parties.  It has the parties fill out an analysis of the case and helps them move through the places that need to be negotiated to hopefully create a resolution.  
  • Expedient Online Resolution: For cases similar to those using automated negotiation that also require exigency, some services perform a type of automated negotiation that also moves at an expedited pace to ensure that the dispute is resolved within the time allowed.  
  • Crowdsource: There is developing software and instances of people using technology to crowdsource a solution to a problem.  This is a very public way to resolve a dispute, but it can give the parties an outside perspective that they had not seen before.  

All of these methods help determine resolutions to a dispute; however, because they all require resolution and agreement from the parties, they may not guarantee a resolution.  Therefore, it is important to consider adjudicative methods as well, especially if a resolution is necessary. 

Adjudicative Methods: 

Adjudicative means that the parties will hand over the resolution of their case to a third party who will decide the outcome of the case.  This takes the resolution duty away from the parties and gives them the ability to present their case.  These methods include: 

  • Online Arbitration: Arbitration is a process where a third-party neutral decides the case for a final resolution.  It is similar to litigation in that the parties will present their case and the arbitrator will issue a decision about the case.  This process often happens in person, but with the rise of technology, it has been happening online more as well.  However, there are certain challenges to the use of online arbitration that have posed issues for some arbitrations that take place online.  Still, most companies and parties will honor an arbitration that takes place online.  
  • Non-Binding Arbitration: Arbitration can also be non-binding, which means that the arbitrator will issue a decision, but it is not binding on the parties.  It serves as an advisory opinion and the parties may use it to create an agreement or disagree with it together.  This type of model has been used in many e-commerce issues to give the parties an accurate analysis of the facts of the case and help keep the expectations of each of the parties are in the right place.  
  • Chargebacks: Chargebacks are a way of challenging payments online to vendors through credit and debit cards.  This process allows the consumer to report a fraudulent charge to the company and then has the vendor dispute this claim.  This entire process usually takes place remotely and the parties can resolve the issue.  In this case, the credit company will decide the case and who is responsible for the payment.  

These disputes involve the use of a third party to determine the course of action for the case. It takes power away from the parties but gives them the resolution to follow at the end of the process. 

Implementing ODR: 

Courts around the world are working to implement online dispute resolution methods and technology into their traditional systems to keep the flow of justice moving swiftly and ensure that disputes have the best ability to resolve on their own.  The European Union has implemented the European Small Claims Procedure, which allows cross-border claims for up to €5000 through the procedure, which is a written procedure that uses ODR technology to transport writings between the parties and the states to resolve the issue.  India has also created online dispute resolution software for use within the systems to create an easier way for parties to resolve their disputes.  These examples show that trusting in and implementing ODR in the traditional system allows justice to be brought swiftly. 

Benefits and Drawbacks of ODR:  

When looking at online dispute resolution, there are reasons to be excited about the prospect of resolving a dispute fully online.  However, some considerations need to be made to ensure that the method chosen is the best option for a dispute.  Online dispute resolution has a variety of benefits, including: 

  • Efficient: ODR can be efficient, particularly when the dispute is between parties that are in different locales and needs a third party with specific knowledge of a subject area that is also not close.  It allows the parties to participate online, which allows the process to start sooner and resolve faster.  
  • Accessible: Because the processes are online, the parties can access it from anywhere, which means that it creates more accessibility for alternative dispute resolution for those that would not normally be able to do so.  This could be because people could not travel to participate previously or people that are working with domestic violence survivors and cannot be together to meditate.  
  • More Neutrals: When dispute resolution happens online, the parties can choose a mediator or arbitrator from anywhere. This can help the parties find an outside perspective or allow them to use a mediator with expertise in the subject matter of the dispute.  When dispute resolution happens in person, they are limited to local neutrals or be forced to pay fees for travel.  
  • Flexible: The online format allows the parties to do other things while they wait for their turn or even allows the mediator to schedule the time to allow the conferences with separate parties so that people are not waiting around. It also gives the parties the option to meet outside of traditional hours if necessary.  
  • Experts: Expert witnesses can sometimes be difficult to obtain because they are busy and cannot travel to testify or help with the dispute.  If a process is online, they are more likely to be able to be in the room and help the parties find an agreement.  
  • Health: This article is being written during the Covid-19 pandemic, and a major perk of online dispute resolution is that the parties can remain healthy and limit exposure while resolving their dispute.  

These are all reasons that online dispute resolution can be incredibly helpful for the parties.  However, some issues need to be considered before choosing an online resolution.  These issues include: 

  • Access: While the virtual model tends to be more accessible, there are instances where the parties will not have equal access to technology to participate, which can cause frustration or unequal bargaining power.  This needs to be monitored and avoided if possible.  
  • Privacy: Because the process is happening online, it allows more room for other people to intrude on the room.  This is particularly important in confidential processes.  There are settings on most platforms to ensure privacy, but this is a risk when not physically meeting and excluding others.  

Conclusion: 

Online dispute resolution is a valuable tool to use to help resolve disputes.  By using information and communication technology, it helps parties find resolutions, manage conflict, and prevent disputes.  There are various forms of ODR, covering both party-driven and adjudicative processes.  ODR is beginning to be implemented in certain circumstances around the world, but the benefits and issues should be considered before deciding if it is the right process for a dispute.  Resolving disputes through technology is nothing new, but using technology to drive alternative dispute resolution is an exciting development that will have strong and lasting changes in the industry.  

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