*Darin Thompson
This article was initially submitted to the Continuing Legal Education Society of BC as a conference paper at the 2014 Civil Litigation Conference for a panel called “From eBay to BC: The Growing Use of Online Dispute Resolution.” The paper was moved behind a paywall so I’m reposting my draft (dated 6 Mar 2014) here.
Introduction
Advances in technology have brought massive changes to many aspects of modern society, including professional services. Professions such as accounting and, perhaps, to a lesser extent, medicine, have begun to reap the benefits of these new advances. Rates of technological adoption in formal dispute resolution have been much slower. Still, technologies have been adopted in isolated cases, including the practices known as online dispute resolution (ODR). In British Columbia (BC), ODR has found a foothold, and will likely continue to see expanded use in the near future.
This article provides a brief overview of ODR, and describes its growth in the BC context. It also includes a brief introductory discussion around the relevance of ODR to litigation lawyers for the present and for the near future.
What is Online Dispute Resolution (ODR)?
Broadly, ODR refers to the application of technology to dispute resolution. Granted, the word ‘technology’ can refer to a range of communication types, both analog and digital. If we take the ‘online’ aspect to refer only to modern information communication technologies, ODR is more specifically understood to involve dispute resolution platforms and processes that utilize the internet. It is also possible to characterize various types of ODR under the equally broad label of ‘technology-facilitated resolution.’ In any event, there is no strict standard for defining what is or is not ODR.
If we accept the fundamental elements of dispute resolution and litigation to be communication and the creation, sharing and retention of information, it is easy to identify a range of potential benefits available through modern information communication technologies. In addition to being our most highly evolved platform for information and communication, the internet is also widely available, ‘always on’ and conspicuous for its low transaction costs. It can span vast distances in an instant and ‘scale up’ or expand to meet volume-related demands very quickly. Vast amounts of information stored in network-connected locations can be searched and retrieved instantly by any user with access to this immense digital network. ODR tries to leverage these benefits for dispute resolution processes.
Some ODR processes offer technology-based substitutions or automations of offline interactions. For example, a mediation might be conducted by a human mediator and the disputing parties in real-time, using audio and video through the internet. Similarly, an ODR provider may offer an online-arbitration process that follows relatively formal procedures and culminates in an adjudication.
Other ODR techniques are less concerned with automating existing processes, aiming instead to create new processes using technology. The most common of these new approaches involves the exchange of information and communications between parties asynchronously. Rather than facilitate real-time interactions, technology is used as a means to allow parties to participate at different times, from any location, similar to the way we use email. These techniques often rely on an internet-based platform to serve as the forum and to be a centralized structure, repository and ‘place’ for the ODR process. For example, a claimant may articulate a claim or demand in the platform, and upload accompanying information to serve as argumentation and evidence. The platform could then send an automatic notification to the respondent that this activity has occurred. The respondent could then log into the platform, review the demand and the accompanying information and make a counter offer, leave questions to be answered or upload other information relevant to the dispute. Parties could continue to interact with one another through the platform, building a store of information and creating new information together in the process. A third party could also interact this way, serving as a neutral facilitator or decision-maker in the process.
Asynchronous or real-time ODR processes may be considered more or less appropriate depending on a variety of factors including the type of dispute or the characteristics of the disputants. A video-based ODR process might be used when it is thought to be important observe the parties’ behavior and emotional states or to encourage a faster-paced negotiation. An asynchronous text-based process might be preferred when the one-to-one emotional exchanges are less important or even undesirable. Asynchronous processes can also be used for complex disputes where the parties need time to consider each exchange in a negotiation or adjudicative process.
Depending on the dispute type, an optimal process might involve a combination or asynchronous and real-time exchanges between parties. A first dispute resolution phase may rely on text-based asynchronous communication and information exchange, followed by a video conference to resolve specific issues or to allow the adjudicator to observe the parties and ask specific questions in a later phase. A truly flexible process could combine technology-based ODR and real-time in-person exchanges if and when either format is thought to be necessary.
Dispute Resolution: Online, Offline or Mixed?
The ability to mix different technologies as well as online and offline processes is often lost in abstract discussions about ODR. These debates tend to focus on the potential benefits and drawbacks of technology-based processes in comparison with their more traditional, offline counterparts. But this separation is artificial and largely unhelpful. It likely has roots in culturally-based opposition to new technologies in the context of long-established practice and tradition, and is usually exacerbated by ODR proponents who are frustrated with the extent of the cultural opposition that prevents wider adoption. Lost in this debate, is the fact that there is no need to opt for online or offline exclusively; technology mixes well into many aspects of human interaction, including dispute resolution.
The appropriate mixture of offline and online processes can deliver the benefits of technology without sacrificing traditional approaches held to be too important to give up entirely. Anyone who has exchanged emails to arrange an in-person meeting has already proved the benefits of a successful online and offline mix. There are few reasons not to take the same approach to dispute resolution, once issues of culture are set aside. Only the person who fears a new form of communication other than face-to-face meetings has any reason to harshly criticize digitally-based communications. In most respects, this comparison holds true for ODR and dispute resolution processes.
Development and Current Uses of ODR
ODR’s roots are based in e-commerce. The rise of the internet brought huge volumes of buying and selling through web-based platforms. With this new form of transacting came new types of disputes. The sheer volume of transactions that occur over the internet, along with expectations of users for remote, impersonal and efficient communication, rendered traditional litigation or court-annexed alternative dispute resolution processes ill-suited to address the resulting disputes. Accordingly, rather than wait for the traditional justice and dispute resolution frameworks to create alternative processes, the internet began creating its own new methods. The resulting techniques and processes came to be called ODR.
The ODR systems used by the online marketplace eBay, considered together with payment intermediary service PayPal, are frequently cited as the biggest example of ODR, handling a volume of approximately 60 million disputes annually. Aside from its impressive volume, the system is also extremely efficient, resolving 85% of the conflicts using software alone. Human intervention is required in only a small minority of cases. The system began limited operations in 1999.
While private users like eBay have been using ODR for some time, formal justice systems have not yet implemented it on a wide scale. Various public authorities have experimented with ODR, including a service in Singapore restricted to disputes arising out of e-commerce transactions and a limited experiment by the City of New York to resolve insurance disputes. The UK’s Money Claims Online system, which is ongoing, has also been held out as an ongoing example of ODR. But this particular example is likely more of an online filing system as opposed to suite of technology-based dispute resolution tools. To date, permanent, publicly administered ODR systems have been rare.
The United Nations Commission on International Trade Law (UNCITRAL) has been working since 2010 to create a draft set of rules to resolve low value, high volume cross-border consumer disputes. However, this project may still be some way from completion, and would in any event represent a set of model rules to be used in a private dispute resolution context, as opposed to a publicly administered system. This example of ODR will be a publicly inspired, but privately administered one.
The European Union (EU) Parliament recently passed a Regulation that will require all EU member states to make ODR available to consumers for the resolution of cross-border disputes within the confines of the European Single Market. Although the proposed system will feature a single platform to initiate claims, most of the dispute resolution processes will occur on platforms provided and administered by private organizations termed ‘ODR Entities’ under the EU regulatory framework. While this example will rely on public regulation, it will also draw heavily on private delivery mechanisms.
As described below, British Columbia’s Civil Resolution Tribunal will be among the first, permanent, publicly administered ODR systems.
BC’s Early Adoption of ODR
Working with a variety of different stakeholders, the BC Ministry of Justice began testing ODR in 2011. Initial testing targeted tenancy and consumer disputes. Mediation was offered for some cases, but the ODR platform was offered primarily as a text-based negotiation system between the disputing parties. Participation in the testing was voluntary for disputants.
Although case volumes were relatively low, the results of BC’s early ODR testing were encouraging, both in terms of resolution rates and user satisfaction. ODR testing has continued on an uninterrupted basis, and is now administered by Consumer Protection BC. Several large companies have committed to use ODR to resolve disputes using the system operated by Consumer Protection BC.
In 2011 BC’s Property Assessment Appeal Board also began to test ODR as a case management and dispute resolution tool. In this test phase, appellants before the board were given the option to try a text-based ODR process as an alternative to the traditional process. Although case volumes were relatively low, promising results led to the continuation and expansion of this testing in 2012 as a permanent service offering. The Property Assessment Appeal Board also added custom-built online self-help guides that help prepare appellants for the appeal process and even to determine the strength of their cases within the process. Both the online guides and the ODR processes serve as examples of new service offerings that rely almost entirely on internet-based technologies.
The Mediate BC Society has also tested ODR for family disputes, using a variety of technologies. Although the results of this testing were positive, it was only offered on a limited basis. Testing has now ended.
The Civil Resolution Tribunal
The Civil Resolution Tribunal Act made ODR part of BC law in 2012. The legislation (not yet in force) creates a new entity, the Civil Resolution Tribunal (CRT), that will resolve small claims and specific strata property disputes. In general terms, the CRT reflects an administrative tribunal framework.
The CRT’s dispute resolution processes have a clear emphasis on collaboration and resolution by agreement. However, the tribunal will also offer an adjudicative phase, resulting in decisions and orders that can be filed and enforced through court enforcement processes. For the delivery of its services, the CRT will rely heavily on modern information communication technologies, including ODR.
The initial CRT phase will require users to engage with an online interface in the form of what can be called an ‘expert system.’ The ‘expert’ aspect refers to the specialized content derived from experts in various fields, structured in a computer-readable format. Using an intelligent questionnaire style of interface, this expert knowledge is then presented in a user-friendly format. Functionally, the expert system will help users to diagnose their problems or disputes, provide specific information, will offer self-help tools, such as calculators or letter templates, and will then triage and stream disputes into a subsequent phase, if necessary. In this case, triage may involve directing users to paid legal help or other resources, depending on their level of need. Streaming will involve preparation for the next phase of the formal dispute resolution process.
In the next phase of the CRT dispute resolution process, users will engage in a direct party-to-party negotiation. In this context, ODR will provide the forum and structure for the negotiation through the internet. Parties will exchange offers and demands and share information such as electronic copies of documents or images, in an attempt to achieve a self-directed resolution by agreement.
If the parties are unable to resolve the dispute through negotiation, it can be escalated to a subsequent phase by formally requesting the CRT to assist in the resolution process. Once a proceeding is started, the case management stage begins. In the first part of case management, a tribunal member or case manager will conduct a facilitative dispute resolution process similar to a mediation. Using an online platform, parties will exchange information and communicate among one another and with the case manager. The flexible nature of the tribunal will also permit case managers to hold teleconferences, video conferences and even in-person meetings, depending on the circumstances. If these case management efforts fail to resolve all the issues between the parties, the focus will turn toward preparation for a adjudication. Working with the parties, the case manager will use the online platform to create, collect, organize and store information that may be necessary for the hearing.
The adjudication phase will also rely heavily on ODR, focusing primarily on information and communications through the online platform. Again, it will also be possible to mix teleconferences, video conferences or in-person meetings into the process as required. Tribunal members will be able to review a case, ask parties to state their positions or respond to the other side, and carry out a range of adjudicative functions using a variety of tools and methods, largely supported by ODR.
The new approach taken by the tribunal will de-emphasize in-person, real time interactions that form the basis of traditional tribunals and courts and will change dramatically the way disputants participate in publicly administered processes. In addition to the strong emphasis on collaborative dispute resolution and active case management, the CRT clearly emphasizes interactions through modern information communication technologies under the umbrella of ODR.
From a design perspective, the CRT is informed by precedents set by successful ODR systems like eBay. However, it is also distinct in that its jurisdiction goes well beyond conflicts arising out of an online marketplace to encompass disputes that originate in the offline world. It also has the obvious distinction of being a publicly administered tribunal, with legislated authority to serve a public justice system. Unlike eBay, which relies on private compliance or enforcement mechanisms, CRT decisions and orders will have the same effect as decisions of other tribunals and courts within the formal court enforcement regime.
The CRT’s technology-facilitated approach to public dispute resolution diminishes the need for a physical place in the resolution process. Where traditional public justice systems and ADR processes tend to emphasize in-person interactions, the CRT will use technology to serve users remotely. Like the internet, it will focus more on the content of interactions and exchanges as opposed to the format or formality. In doing so, the CRT will test the proposition that justice can be oriented toward services as opposed to a place, like a tribunal office or courthouse. Many users will enjoy equal access from within their homes or and mobile devices.
The CRT will also show whether formalized justice systems can unlock significant improvements in terms of speed, cost and accessibility through technology. The new tribunal will go beyond automation of offline processes test the potential of new services, including online problem diagnosis, self-help and triage in the early stages. It will also test the benefits of remote, text-based, asynchronous communication in the dispute resolution process. Collectively, these changes stand to create new services that increase access to justice.
Civil Litigators, ODR and Courts
It is difficult for ODR proponents to resist the temptation of predicting that litigators who ignore the rise of ODR do so at their peril, setting themselves up for future irrelevance. But if such predictions are accurate, we will probably not know it for some time. So long as courts maintain their traditional approaches, there will be traditional work for litigators. Given the courts’ slow adoption of information communication technologies, significant changes are unlikely to occur in the near future.
However, it is possible, if not probable, that ODR will continue to grow outside the formal court framework. The proposed UNCITRAL cross-border consumer ODR rules could become an example of a publicly endorsed rule framework to be administered within a private system. The EU consumer ODR system will serve as an example of a publicly legislated framework with private delivery mechanisms. BC’s CRT will administer ODR through a public tribunal framework.
Each of these examples demonstrate attempts to create new ODR processes with minimal court involvement. In spite of their differences, these examples all serve as efforts to address dispute resolution needs that are not currently met by traditional justice frameworks, and thus further the aim of increasing access to justice.
ODR could see expanded use even while courts maintain their more traditional roles and practices. Instead of positioning new technologies as replacements for courts, they can be used to increase the capacity of our public justice systems alongside more traditional processes. These attempts to add capacity may prove to be realistic in terms of accomplishing transformational change in the short to mid-term, as opposed to more ambitious efforts to effect full-scale court reform. Strategically, the creation of complimentary processes could also help to address levels of unmet demand and resource pressures across our justice systems.
ODR in Practice
For litigators who are interested in exploring new service offerings, ODR might serve as interesting subject for consideration. It is not likely to be a profitable line of practice given the relatively low values of the disputes currently handled by ODR. But if these processes are successful, it is reasonable to expect they will eventually expand to include higher value disputes and new dispute types. Litigators or firms who have knowledge and experience in ODR will be well placed to make the transitions into these future areas of practice, if not to lead them.
In the near term, litigators might also consider ways to leverage these technologies without waiting for them to become formally mandated by the justice system. It should be possible to use video or text based ODR processes to consult more efficiently with clients (particularly if they live some distance away) or to negotiate with opponent parties (or both, within the same platform). Many professionals and businesses have been conducting business activities that are no-less specialized than litigation for some time. Lawyers who serve as mediators or arbitrators could also exploit these technology-based tools to streamline processes, even if they are only used as preliminary steps before an ultimate face-to-face mediation or arbitration.
Many litigators have already used a variety of modern information and communication technologies, including email, video conferencing and document sharing through the internet. The goal of ODR is merely to leverage the benefits of similar technologies and communication channels by pulling together their functions into a single application, making it easier to manage within a centralized, structured virtual ‘place.’ Litigators have relied on technologies like email largely because it is efficient, and because it has been easy to adapt to their needs. ODR is meant to bring similar benefits and should be used in a similar way.
Lawyers considering experimentation with ODR should avoid the temptation to evaluate it too strongly against traditional ways of doing business. For example, email is clearly less personal than face-to-face or telephone conversations, but many lawyers nevertheless use it extensively for communicating with clients or with other counsel. Although it may be considered inferior to more traditional, personal forms of interaction, it is nevertheless valuable and important in its own right. ODR can be a very effective vehicle for doing dispute resolution, even if it is not the only way to do dispute resolution.
Conclusion
Our justice processes have, thus far, proved highly resistant to the massive changes spurred by modern information communication technologies. The slow adoption of ODR into formal justice systems is consistent with the tendency to resist technology, at least on a large scale. However, it is reasonable to expect ODR will eventually become part of the justice ‘mainstream’. Within a few years, it may be endorsed by the UN and will be part of the legal landscape in the EU. In BC, ODR has already been used in limited pilot projects with promising results. It will soon see wider use as the primary platform for the new CRT. If the approach proves successful for small claims and strata disputes, it is reasonable to expect that ODR will eventually be considered for higher value cases and other types of disputes.
Litigators who are content to restrict their practices to today’s approaches should be able to continue doing so for some time. Others, who are interested in new service offerings would be well served to explore the potential of technologies like ODR. These new computer-based process could bring dramatic increases in access to justice and unlock a range of other, yet undiscovered benefits for clients and lawyers alike.