Today’s worldwide digital revolution poses unique challenges to the legal community. As new technologies continually develop and permeate every aspect of daily life, rules and regulations governing human conduct quickly grow obsolete. But the growth of online communication and interconnectivity also promotes innovate ways to address legal disputes. Online Dispute Resolution is one such innovation.
Broadly speaking, Online Dispute Resolution (ODR) is the process of incorporating technology to help facilitate alternative dispute resolution procedures, including arbitration, negotiation, and mediation. Though initially developed in 1996 in response to rising e-commerce transactions, ODR can be used to resolve disputes arising both online and off. In addition to addressing a wide range of claims, Online Dispute Resolution takes a variety of forms, which vary in level of automation and human supplementation. For example, fully-automated negotiation occurs completely online: simple monetary-focused claims are resolved through software algorithms, and negotiating parties never meet face-to-face. In contrast, online mediation typically occurs in virtual resolution rooms. Conferencing software allows the mediator to communicate live with the parties in chat rooms or over videoconference.
The Advantages of ODR
In-person ADR is often promoted as a faster, cheaper alternative to litigation. By offering arbitration, mediation, and negotiation online, ODR advances these benefits even further. Both ADR and ODR minimize cost and save time through simplified procedures, common absence of discovery, and lower attorney’s fees. But in addition, online dispute resolution does not require parties to travel, which results in extreme savings. Though cost varies depending on the type of technology used and the timeframe required, ODR services are generally far cheaper than traditional litigation and notably less expensive than in-person ADR.
Another advantage of ODR is convenience. Cyber-dispute resolution allows parties to resolve their claims from their respective offices or residences. In addition, unlike courts or arbitral tribunals, ODR service providers are typically available twenty-four hours a day, seven days a week, every day of the year. Parties are able to communicate at all hours of the day, diminishing difficulties faced by those located in different time zones. Finally, Internet caucusing provides a timesaving mechanism unique to online mediation. An online mediator can devote time to one party “without wasting the time of the other party, who would traditionally sit around waiting for the next mediation stage… reading Time magazine or growing resentful at being ignored.”
The Disadvantages of ODR
Cyber dispute resolution presents a unique set of concerns regarding privacy and security of information shared online. Although cutting-edge security and encryption technologies continually develop, the Internet “can still be porous when it comes to the security of data transmitted electronically.” In addition, there is a permanency of online written communications that does not exist in the brick-and-mortar world. ODR creates an electronic record, and “could potentially enable a party to print out and distribute e-mail communications easily and without the knowledge of the other party.” Without trust between parties, settlements are harder to reach.
Furthermore, the convenience of communicating via computer must be contrasted with the impersonal nature of the Internet. Email and other written messages do not express pitch, tone, volume, personality, or other nonverbal cues. These cues play an important role in assessing an opposing party’s feelings, creating empathy, and establishing confidence when making agreements. Face-to-face interactions facilitate more rapport than online interactions, “which in turn leads to more trust and thus more cooperation.” Regardless of what form it takes, cyber dispute resolution lacks certain irreplaceable benefits of face-to-face conversations. Though surprisingly few authors have written about the issues associated with ODR’s lack of human interaction, in my opinion, this is by far the biggest disadvantage of online dispute resolution—and arguably the reason it remains uncommon.
The Future of ODR: The Promise of Advancing Technology
There is a strong consensus that most of ODR’s disadvantages will be overcome as technology advances. Cyber dispute resolution is described by some as inevitable due to “the rise of e-communities and the Internet-savvy generation.” In particular, many see videoconferencing as an “obvious solution to the lack of face-to-face encounters” in cyber-mediation. While several challenges exist on the road to perfecting ODR in all of its forms, the predominant view claims “it is only a matter of time before they are overcome.”
But is it really only a matter of time? Even if trust and intimacy increase and technology makes virtual interaction more and more like reality—perhaps there is something about true face-to-face human connection that will never be replaceable. Still, for attorneys and parties who remain open-minded about this technology, there is undoubtedly huge potential for ODR to thrive under the correct circumstances.
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Jennifer Pinsof is an editor on the Michigan Telecommunications and Technology Law Review, and a member of the University Michigan Law School class of 2017.