Online Dispute Resolution: A Primer

Online Dispute Resolution (ODR) is not a new concept and has received significant scholarly attention. Nevertheless, there is still serious confusion over what ODR even means. As a recent scholar noted: “The phrase ODR is too broad to be useful.” For ODR to be properly utilized, more clarity is needed to help practitioners understand the scope, benefits, and drawbacks of ODR. This post is the first in a new series seeking to shed necessary light on ODR.

In its original form, the term ODR was straightforward and meant what it said—dispute resolution held online. ODR developed as a way to address conflicts that arose online, primarily through e-commence transactions. ODR was viewed as a unique solution to the unique problem of online disputes. Over time, ODR expanded to include the use of information and communication technologies to facilitate and assist with traditional forms of alternative dispute resolution, regardless of where the disputes arose.

Today, the term ODR is even more expansive. In its current form, ODR covers the use of any technology to assist parties in the dispute resolution process. Consider three different hypothetical mediation proceedings:

1. A mediation conducted through a video conferencing service rather than in person.
2. An in-person mediation where the parties utilize technology tools to assist in analyzing their positions.
3. A mediation run entirely by an artificial intelligence (AI) service.

All three mediations are a form of ODR. ODR can be as straightforward as using a webcam, or as complex as a machine learning algorithm that guides disputants to an optimal settlement. Even the examples above merely scratch the surface of what is possible through ODR. As legal technology improves and expands, ODR is becoming increasingly popular and useful.

Before diving into the specific forms of ODR it is important to know the key advantages and challenges that face all forms of ODR. First, the advantages:

Reduced Cost—Cost-saving is already a core advantage of alternative dispute resolution. Instead of engaging in costly and time-intensive litigation, ADR allows parties to minimize costs and save time in resolving their disputes. ODR enhances these benefits. Using telecommunication technology, for instance, eliminates travel expenses, allows for quicker communication, and gives the parties more flexibility in scheduling. Technology tools and AI can help parties understand their position and range of options, leading to more efficient resolution. As a set of tools, ODR can reduce costs significantly as compared to in-person ADR.

Increased Access to Justice—ODR allows for increased access to the legal system in multiple ways. As discussed, ODR originated as a way to address the high number of disputes that arose out of e-commerce transactions. Instead of relying on traditional forms of dispute resolution, companies have incorporated ODR systems into their websites in order to give customers a direct and efficient way to resolve their disputes. For high-volume and low-value disputes, ODR may be the only practical means for a consumer to resolve a dispute. ODR also allows increased access to the legal system for traditional disputes. A direct byproduct of reduced costs is that more parties can afford to utilize ODR. Courts have begun to implement ODR tools as well. The convenience of ODR makes it significantly easier for users to engage with the court system.

Accuracy—The increased convenience of ODR can also lead to better accuracy. Most simply, ODR helps parties and decision-makers reach more accurate outcomes by providing better access to information. ODR can also help avoid implicit biases on factors such as race and socioeconomic status. One goal of AI is to avoid the inevitable biases that are present in human decision-making. Although these tools are still in their infancy, there is hope that ODR can provide more equitable remedies.

ODR faces several challenges as well:

Fairness—Many of the advantages of ODR are not foolproof. For example, although ODR systems provided by e-commerce companies may increase consumer access to remedies, these systems almost certainly lead to better results to the company paying for them. Although ODR can be more cost-effective, these systems are not costless. Since there is currently no regulation on these systems, outcomes may become stacked in favor of the implementing party. It is important to pay attention to who is covering the costs of the system, as they are the most likely to benefit from them. Similarly, ODR is not a silver bullet to provide optimally accurate resolutions. For instance, AI can actually exacerbate issues of implicit bias. Developers of these systems need to continually monitor the results to ensure that ODR tools are not creating more inequities than they are solving.

Privacy and Security—The introduction of technology inevitably introduces privacy and security risks. No tool is foolproof and therefore information shared through ODR solutions may be at higher risk of exposure than with traditional in-person ADR. Trust is essential in order for parties to resolve a dispute, and that trust extends to the tools and processes they are utilizing. Developers of ODR solutions need to pay particular attention to these concerns.

Impersonality—Disputes are an inherently emotional and trying experience. Mediators and arbitrators do more than act as robots crunching information and outputting settlement ranges. The neutral third-party has to navigate a complex emotional setting and provide an environment to help both parties feel comfortable with the proposed solutions. The benefits of human interaction can be lost as ODR increasingly relies on technology. This risk is particular salient with AI solutions.

Knowledge of these generalized advantages and costs is only the first step. The rest of this series will focus on specific technologies and fields under the umbrella of ODR. Understanding the landscape of available tools is essential for practitioners to know what options are available to their clients and to pick the right tool for the job.

Photo by: Vanilla Bear Films on Unsplash