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Technology: Welcome to the new world of online dispute resolution

New web-based dispute resolution mechanisms offer convenient, speedy and cheap opportunities to resolve simple matters

Once stodgy and tradition-based, the practice of law is suddenly changing. The convergence of the Great Recession with rapid advances in digital technology provides businesses a powerful financial incentive to take advantage of new, web-based dispute resolution mechanisms. Online dispute resolution (ODR) offers convenient, speedy and inexpensive opportunities to resolve various disputes, particularly simple, document-based and consumer matters. However, standard forms of alternative dispute resolution (ADR) likely will remain best suited to address complicated and many other types of cases.

ODR uses a wide array of technology. Individuals, companies and ADR practitioners are increasingly using email, video-conferencing and web-based programs to tackle disputes. Most likely, new technologies that are just emerging or yet to be conceived or developed will provide other means. To be competitive and successful, cost-conscious attorneys and companies must embrace these new technologies.

ODR approaches are many and varied. At its simplest, a mediator can follow up on an in-person session by communicating with the sides by email rather than by telephone. Or, unrepresented parties can agree to engage an automated mediation program to resolve a purely monetary dispute. Some website programs compare the parties’ double blind offers and demands and emails them when they intersect or enter a reasonable range of settlement. Other applications allow parties, counsel and the neutral to mediate by video-conference, retaining the ability to conduct private sessions or caucuses. Even arbitration can be conducted online, either by the parties submitting all documents and declarations by email and forgoing live testimony or by a video-conferenced hearing.

These and other forms of ODR offer many benefits. Email communication gives participants time to consider their responses or to engage other decision makers. Often, traditional mediations fail because one side cannot obtain approval from an insurance carrier or corporate executive located in another time zone or who is otherwise unavailable at that time. Sometimes the mediator needs more time to work on one party to convince it to make a significant move, but the parties resist the expense and inconvenience or scheduling another in-person session. 

The most common form of dispute involves consumers. Web-based dispute resolution programs can save businesses and consumers time and money. Rarely represented by counsel, consumers often do not understand formal dispute resolution processes or the court system and, as a result, cause businesses to suffer delays and costs until the consumer properly exhausts all available remedies. A better process for both the consumer and business may be a purely web-based computerized program.

One way to reduce the cost of arbitration and achieve its advantages over inflexible court litigation is to conduct it entirely by email or video-conference. A number of cases could be presented entirely by the submission of documents to the arbitrator. If necessary, the arbitrator can conduct a preliminary telephone hearing to decide any evidentiary objections. Why should the parties bear the cost of travel and their time to attend the proceeding when it is possible for the arbitrator to decide without testimony or the need to evaluate the witnesses’ credibility?

Of course, ODR has its limitations. In many mediations, the neutral’s ability to look parties and counsel in the eye establishes the necessary trust to convince reluctant partisans to abandon strongly held views and move toward resolution. Likewise, classic mediation theory holds that cases are more likely to settle as time, exhaustion and hunger wear down even hard-nosed negotiators. Similarly, experienced mediators sense from body language when to present certain arguments. A mediator cannot very well “strike when the iron is hot” by email or do so as effectively as is possible if the parties are present in person.

Legal barriers could impede ODR. For instance, mediation confidentiality agreements may need to cover the improper dissemination of back-and-forth emails, which obviously is easy to do with the click of a mouse.

Recognizing the advantages and disadvantages of ODR, creative and forward-thinking counsel will better serve clients by broadening their ADR tools to include ODR.

Contributing Author

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Terry Friedman

Hon. Terry B. Friedman, a retired Los Angeles Superior Court judge, is a mediator, arbitrator and discovery referee with JAMS, based in Santa Monica. He...

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