♬  And you just gotta move on, Because it’s all, Lessons learned...♬

Music and lyrics by Wendell Mobley, recorded by Carrie Underwood.

Most lawyers are as yet unaware of the growing discipline known as Online Dispute Resolution (ODR). ODR taps into technology (principally the communication abilities of the Internet) to help resolve disputes between parties. While it is seen as the online equivalent of ADR, it really is much much more.

ODR was born by the combination of ADR and Information and Communication Technologies. In ADR, there are three parties: the plaintiff, the defendant and the third neutral party (a mediator or arbitrator for example). However, ODR differs from this three party system by introducing computers and software – an independent fourth party that can help manage the dispute. Indeed, at the highest and most sophisticated levels of ODR, the technology applies mathematical models and algorithms based on group theory to resolve the dispute. www.SmartSettle.com, one ODR e-Negotiation system, states as follows:

“As the world’s most advanced negotiation system, Smartsettle Infinity can do what human minds alone cannot – model the problem, manage preference information, and quickly optimize solutions. Infinity supports an unlimited number of quantitative or qualitative issues between any number of parties in any combination of real-time and asynchronous negotiations, whether face-to-face or over great distances, anywhere on Earth.”

There are, of course, many other implementations of ODR systems, that range from simple blind-bidding systems (one variable, two parties) where the system does not reveal what each person is willing to accept unless a settlement is reached (the software compares each party’s position and declares a settlement once the positions become sufficiently close), to assisted negotiation, to adjudicative methods and others.

Is this science-fiction? Not in the least. For example:

“The European Consumer Centers Network (ECC-Net) consists of 29 centers in the European Union, Norway and Iceland. Financed by the European Commission and members states, and staffed by individuals trained in law, the network seeks to increase consumer confidence in its internal market. Mr. Knudsen explained that 40,000 to 60,000 complaints and information requests are typically addressed each year, and that eCommerce complaints outstrip on-premise and non-eCommerce distance sales on an order of 2:1. Approximately half of the complaints the ECC-Net oversee are resolved through mediation.”

How important is the field of ODR? It is recognized that low value e-commerce, or sales/purchases conducted over the web, is stalled due to the lack of any effective enforcement mechanism where the purchaser and vendors are in different jurisdictions. Accordingly, the United Nations Commission on International Trade Law (UNCITRAL) has created an ODR Working Group to focus exclusively on a global ODR system for low-value eCommerce disputes and to craft recommendations that can be taken back to the full UN General Assembly. This represents a major development in the effort to build a global ODR system, since it is the first time a body with representation from every sovereign nation in the world has so seriously tackled this complex subject.

Furthermore, governments are looking at more localized ODR systems for small claims, custody and family disputes, among others. Businesses are looking at building in ODR to their contracts of sale to provide a low-cost and effective method to resolve consumer disputes.

One thing is clear: the world is turning to ODR as a way to bridge distances and time zones and implement a dispute resolution mechanism that will allow e-commerce disputes to be settled in a way that is just not possible using the current dispute resolution systems that are otherwise too tied to geography, too expensive or too complex for these types of disputes.

The next ODR Conference will take place in Prague, Czech Republic on June 27-29, 2012.  For more information click here.  This conference will continue the dialogue on how to effectively create a world-wide ODR system for e-commerce disputes.

Once this type of ODR system is effectively built – it will not be long before it is applied to many other types of disputes, since it will all be lessons learned.

(This post was originally written for the Canadian Bar Association ...