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Your virtual day in court: How online dispute resolution is transforming the practice of ADR
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By Gary Oakes
Victoria
August 15 2008 issue
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As Frank Fowlie put it, “the possibilities are endless” — and, they’re green.
He was talking to The Lawyers Weekly about Online Dispute Resolution or ODR, a subject that’s been much on his mind lately.
In fact, he recently finished chairing the seventh International Forum on Online Dispute Resolution, which attracted scores of people from around the world to Victoria.
In his day job, Fowlie is the Ombudsman for the Internet Corporation for Assigned Names and Numbers (ICANN), the host of the forum which was co-sponsored by Royal Roads University of which he is a graduate.
He believes that ODR will have a fine future but it’s not about to replace the existing justice system.
“I think anything criminal in nature will have to be done in the courts [as will] large-value suits, but certainly things like small claims [matters and] a lot of family law issues could be done on line [as well as] suits arising from commercial transactions.
“It’s definitely a greener technology as opposed to courts because there’s not a lot of paper. Depending on the type of platform that’s being used, there’s instantaneous document retention.”
He thinks of ODR as “the next step to traditional ADR, or Alternate Dispute Resolution, which has been conducted face-to-face.” And it’s not just for commercial transactions. One of the speakers at the forum was talking about using ODR “in the context of world peace [or] interstate conflict.”
It could also be used by divorcing couples to divide assets and schedule parenting time, he added.
Fowlie pointed out that eBay deals with 40 million disputes a year and “the cost for that is built into the transaction fee...”
In Singapore, he said, the small claims court system is entirely on line. “All filings are done [electronically and] it’s a virtual court. Magistrates review the material and render decisions online. Nobody has to appear. That’s wonderful.”
With such a system people don’t have to take time off work or get a babysitter to look after the kids while they’re in court, he said. As well, it doesn’t add to the demand for more court and document storage facilities. And they can fill out the forms at their convenience.
“I think [ODR] is an alternative which will come into its own as a way of collaboratively seeking redress and justice,” Fowlie said.
He explained that in a situation “where you... have a purchaser in one country, a vendor in another... and a sales platform in a third, ...to seek redress through a court-based system [it] may be, first, extremely difficult to determine who has jurisdiction. And secondly, if the jurisdiction is off shore for one of the parties, [it can be] very expensive. So Online Dispute Resolution [enables] the parties to initiate their own redress.”
Fowlie gave as an example travelers with complaints about their airline. Right now “it’s a long, involved process” with people being kept endlessly on hold or waiting for someone to call them back or dealing with it by regular mail. “If people could get off the airplane and log on with their complaints,” it would be dealt with much faster and more efficiently.
ODR is particularly effective “when you’ve got people in different jurisdictions or different time zones. If you’re a party to mediation and the other party is in India, the chances of you actually being in each other’s workday are fairly minimal. But if you’re dealing through a mediator or an on-line platform, you can each enter your own information when it’s convenient for you.”
He also believes the insurance industry “is absolutely ripe” for such a system. In disputes over the quantum of payment, “if they were to invest... in systems where there could be a blind bidding approach on line using technology where they could come to a zone of possible agreement quickly... there would be huge savings.”
And he’s absolutely convinced ODR will prove to be a valuable resource for lawyers. Ernie Thiessen couldn’t agree more.
“There are tremendous benefits in store for lawyers that get on this bandwagon early,” Thiessen told the national legal newspaper.
He is president of B.C.-based iCan Systems Inc. which developed “Smartsettle,” another co-sponsor of the Victoria ODR Forum.
“You can think of Smartsettle as an invisible automated mediator behind the scenes,” explained Thiessen, who obtained his PhD from Cornell University.
According to the program notes from the conference, his work building on his Cornell research has led to the development of “the world’s first secure multiparty eNegotiation system.”
Thiessen said traditional mediation “often kicks in after parties have come to [an] impasse after already wasting time and resources with a tedious negotiation dance. Smartsettle is designed as an early intervention tool. ...”
In one presentation, he said the system “uses optimization algorithms to suggest efficient outcomes. Imagine optimization algorithms as a recipe that is used by the neutral server to take ingredients from the parties and return something good back to them.”
And the suggestions “are completely neutral, based only on information [the parties] provide. [They] remain in control of a process that soon produces an outcome that is not only fair but surprisingly more valuable than [they] could achieve by other means.”
Another participant at the Victoria conference was Dr. Erich P. Schellhammer, the Program Head of the BA in Justice Studies in the School of Peace and Conflict Management at Royal Roads University.
He told The Lawyers Weekly that “on-line mediations are still rarely used (mind you, many see its potential in Canada due to our geography — it is hard to deliver mediation services face to face because we have so many small communities where there are no mediators and it would be costly to get mediators there).
“Whether it will affect lawyers, nobody really can know, in my opinion.”
He said governments are encouraging parties to use mediation which “might lead to less litigation but does it really?”
In his view, those “who wish to litigate will continue to” do so.
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