ODR adoption is growing exponentially, yet rules and regulations are still lagging behind. My thoughts on ODR in general from my readings and practical dispute knowledge.
Online dispute resolution is an alternative. A change. Like rules and courts started as an alternative to sword fighting, ODR is a new alternative. Change cannot be avoided, therefore we should be focusing on addressing all the pros and cons of ODR and from all points of view as we will all inevitably use ODR (most probably, you already did without knowing! )
My thoughts are below. Happy reading!
To read more about ODR especially from the literature point of view check out; What is ODR (Online Dispute Resolution)? What does ODR mean? and Online Dispute Resolution: The Advantages and Disadvantages.
Common issues with ODR
When discussing ODR, a wide variety of advantages are presented such as:
- Overcoming travel and location restrictions.
- Anticipated decrease in costs. Mainly due to less travel, remote working and ability to share documents online
- Reduced dispute resolution time. This is due to reduction in lost time from travelling, coordination and agreeing on face to face meeting, and in exchanging hard copy documents.
- Justice delayed is justice denied! The ability to speed up “justice” indirectly affects economies and businesses in a positive manner as it improves investor confidence.
However, many issues that arise in practice are not discussed nor is it presented in a concise manner. This might be due to the lack of a centralized or “approved” platform for ODR, which can provide consistent feedback. Before going into the drawbacks of ODR, below are a few reasons which might explain why there is not enough information on the disadvantages of ODR:
- First of all, like the advantages of ODR, there is no enough empirical studies to elaborate on both; the Pros and Cons of ODR and over a long period of time.
- Not all countries have a similar stance on ODR. Therefore, it is hard to obtain verified data especially when issues of enforcement of ODR awards is still not clear.
- While the UNCITRAL “UNITED NATIONS COMMISSION ON INTERNATIONAL TRADE LAW” did issue technical comments in 2017 on ODR, global consensus on ODR is still not achieved.
- On another note, one might consider that one ODR drawbacks stems from its online advantages! Since ODR can be conducted online, there is no border restrictions. Therefore, people in china can be associated in a dispute with people from Sweden via a Canadian or American ODR platform. As you, can see many doubts can arise from the respective disputants due to the variety in language and culture between them.
- Can Zoom meetings be considered as ODR? We need a dedicated platform for ODR – Not coordinated zoom meetings. This platform must be able to capture and externally record the meetings to ensure that the meeting was conducted on a fair manner and has some sort of judicial support.
For example, I recently attended an “Ad-Hoc ODR” Zoom meeting (as an observer) between 3 disputants and an external expert. One party spoke for nearly 2.5 hours without interruption and when the other party tried to explain his case, he started experiencing “mike” issues. Consequently, the expert ended the meeting without all parties having the same speaking chance due to “mike issues” and did not even mention this in his “Minutes of Meeting”
Practical drawbacks of ODR
- Anything online is not private. Period. Cyberattacks are on the rise and no platform is safe from hacking attempts. In addition to that, there is concerns from the use of simple hack and tricks such as using an external screen recorder to record an ongoing session.
- From work experience, I started noticing that some managers (not necessarily in a dispute) start two meetings at the same time through different platforms such as Zoom and WebEx, then, will use the recording function in one to record the original meeting without the knowledge of the participants.
- Even with globalization, barriers still exists. Some of the disadvantages of ODR are not inherent from the process itself but from the differences between disputants themselves. A dispute might arise within business partners from France and India. In that case, even if English is used as the language of dispute, you cannot guarantee the full proficiency and ability of both sides in presenting their case correctly. To make things worse, one party might be at right but fail to correctly present their case! Such instances are bound to happen and will make people shy away from ODR in the future.
- Conflict of interest. Individuals, Large corporations, hedge funds, venture capitalists..etc can be in invested in ODR companies through shell companies which might influence the decision of certain disputes. Many questions can come up, for example, they can influence the AI coding to be more biased towards certain entities such as Amazon or Facebook or even influence those assigned in complex cases.
- Concerns on justice. This subject is discussed extensively in the literature mainly on the impacts of ODR in justice in terms of:
- Procedural Justice (determining how fairly people are treated),
- Distributive Justice (determining who gets what).,
- These issues stem from the fact that not all people have the same level of access to the internet or “tech-savviness”. Not all countries have the same internet speed, access to the internet, and similar costs. A certain platform can be blocked in one country and so on. Many other issues such as body language and the ability to express oneself are also discussed extensively in the literature. For example, in many companies the person authorized to go into dipsute is usually (to some extent) older and less tech savy than those who are actually part of the dispute. This evident in Engineering or design firms, which are owned by one or more person but managed and operated by a different/ younger team.
- Ability to actually negotiate and obtain reasonable concessions. Indirect communications usually results in one party being less well to give some concession or change their position in order to resolve a dispute. Disputants sitting at the comfort of their homes or office will most likely not be able to fully undertand or accept the other party point of view in many aspects.
Disputants tend to forge that ODR is not about enforcing rights, but about resolving and settling disputes reasonably.
Suggestions for improving ODR
Few additional suggestions to the usual ones discussed in the literature are suggested, such as:
- Implementing an eligibility clause for using ODR. This means that the contract in question and the disputants have the same capacity to go into ODR, represet themselves reasonably in ODR and have no bariers or issues with ODR.
- Use of bloch chain technology to increase the trust in the use of ODR and solving some of its security issues.
- A new convention specifically for ODR to internationally ratified.
- Focusing on fairness and quality of service and not on making it cheaper.
There are other suggestions that are a bit different but require more elaboration (Personal thought), namely; the use of a hybrid approach.
This is a Traditional ADR approach (Offline) infused with ODR. The ADR procedure can be initiated offline (the traditional way) and once the ADR process commences (for example, arbitration), a mix of “In-Person” and (Online) sessions and proceedings will be carried.
The use of a specific ODR platform for some aspects of the arbitration process can be preset into the arbitration agreement. The purpose is to reduce some of the arbitration costs and reap the benefits of both ADR and ODR.
Wrong approach towards ODR
It is human nature to go overboard and forget the original goal or intent of their actions. Overcomplicating processes and focusing on automation is one issue that plagues online customer service platforms.
The use of bots, automatic replies, and virtual assistants is not handy. Everybody knows that this is just a way to reduce human input, and hence costs. The use of AI and bots to gather or filter information by relying on certain keywords or behavior is not helpful especially for those who are not accustomed to using the internet (for things other than normal browsing or watching youtube videos). In addition, the interface and speed are usually not helpful which further acts as a barrier towards mass adoption.
This is evident in monetary disputes that are solved by AI. Where one party may on purpose go for high reductions in demands directly at the commencement of the settlement process to shift the algorithm to his favor as he/she is “trying to resolve the dispute”. This ignores the fact that the initial money claimed was probably much more than what is fair.
Other global risks for ODR
These are described as global risks as they affect the internet as a whole. Deep fakes might result in severe corruption and defrauding in online hearings and cases involving expert witnesses. It can be resolved by implementing additional security requirements such as secret verification codes, fingerprints, and double authentications by other parties too. The use of blockchain technology will play an important role in the security process too.
Other security issues include manipluation of data and hacking to gain leverage.
The last issue is political and is concerned with worries about enforcing the use of private ODR providers in international disputes which might cause political issues to arise.
ODR is here to stay. A new convention, similar to the new york convention, may be the first step for worldwide adoption and consensus on ODR awards and for seeking remedies to its drawbacks.