Online Dispute Resolution: Relevance and Future

“There was a time when people felt the internet was another world, but now people realise it’s a tool that we use in this world.”

         Tim Berners- Lee

These are the wise words of the man who is credited with inventing the world wide web, and a rather telling observation by him. We can hardly imagine a world now, where technology is viewed as a separate discipline, and not part of our daily lives. It is safe to say that there has been a pre- internet world and a post-internet world, and using technology, post internet world has seen innumerable and unimaginable breakthroughs, Online Dispute Resolution (ODR) being one of them. ODR has the power to change the landscape of the dispute resolution mechanisms, across territories. It has the power to change how humans view resolving disputes altogether. It already has, and it further will.

  1. Introduction

Online Dispute Resolution is different from the traditional court systems, and is in fact a parallel justice system, which successfully blends information technology and dispute resolution mechanisms together in order to resolve disputes efficiently. ODR is not just dispute resolution, but dispute prevention process as well.

ODR began its existence as ‘Online ADR’ and was meant to be an online equivalent process of offline face to face dispute resolution mechanisms such as negotiation, mediation and arbitration.[1] Therefore, it is very important to understand the origin of both technology and the dispute resolution mechanisms, the two pillars on which ODR has developed.

In this context, ‘how’ and ‘why’ questions become relevant. How has ODR come into picture? Why is it needed at all?

For understanding ‘How ODR came into being’, it is relevant to also understand how the world we are living in has changed since the arrival of technology called Internet and How the concept of Alternate Dispute Resolution came into picture, making Online ADR a reality.

  1. Background:

As far as development of Internet goes, early on in 1468 the Department of Defence, United Nations had established a Federal Advanced Research Projects Agency (ARPA)which was mainly responsible for developing technologies for military use. The military network was called the ARPANET, and was restricted to use only by military.[2] On October 29, 1969, ARPANET delivered its first message: a “node-to-node” communication from one computer to another, thus getting October 29, 1969 widely known as the “Internet Day.”

In the year 1980, access to ARPANET was expanded to several universities by National Science Foundation which funded the establishment of supercomputing centres in these universities. Thus ARPANET was now in use not just by military, but also by academia.

Given the restricted use of ARPANET by military and academia, Internet for the first 20-25 years of its existence saw very few disputes. And for the few disputes there were no online formal institutions for resolving them.

After the exclusive use by military and academia, ARPANET, was later formally decommissioned in 1990, having partnered with the telecommunication and computer industry for commercialization and an expanded world wide network, known from then on as INTERNET came into being.

However, after the decommissioning in 1990, the world saw the evolution of Internet and its unimaginable increased use, which meant the world of Internet would not be dispute free. And that is what exactly happened.

From there to now, we have witnessed how Internet has changed the landscape for communications, associations and interactions. It has connected people disregarding all kinds of boundaries, culture, territories, so much so that the online world did not just begin to connect using internet, but it began disputing on internet too, just like in offline world. 

1990s was the time when online environment for commerce, education, employment, entertainment was on a boom. Suddenly the commercialization of Internet was a ready tool in everyone’s hand to start interacting for anything big and small. This gave them power, this gave their businesses the power too. However, similar to the offline world, where increased interaction often results in increase of disputes, the online world saw increased disputes ranging from spamming, phishing, illegal downloading, piracy, to normal commerce of buying and selling online. Cyberspace was no longer a harmonious place.

Internet as a 21st century medium has revolutionised almost all areas of life. From serving as a common source of information, communications tool, global platform for trade and commerce, it has become the engine for introducing modern technological solutions for almost every activity. Needless to say that Internet has made an impact on many areas of private and public life, one such area being law.

Parallely, when the world was getting introduced to Internet in the 1960’s and 1970s, the world was also witnessing dissatisfaction with the Court systems all over the world. The caseloads were increasing manifolds with each passing day and much more was expected from the Institution responsible for delivering justice. This discontent with the formal Court systems led to the Convening of Pound Conference 1976 where several of the legal stalwarts discussed the current state and the drudgery of the judicial system, not just in terms of efficiency but relating to cost, time, quality of outcome reached, party satisfaction, impact of resolution, interest based needs, creative solutions etc. Pound Conference has given huge impetus to the growth in popularity to the process of Mediation, which is one of the mechanisms under Alternate Dispute Resolution.

Pound Conference pressed for having the mechanisms of Alternate Dispute Resolution (ADR). ADR though seen as a recently developed mechanism, is an old trick/way of resolving disputes between parties. While Courts are the adversarial form of justice system, ADR aims at resolving the dispute in an amicable manner. Amongst the processes of ADR i.e. negotiation, mediation and arbitration, negotiation and mediation are the informal processes which aims to settle the matter between two or more disputing parties, and are more driven by needs and satisfaction of parties than their rights and obligation. In negotiation, parties try to discuss their problems and resolve it amongst each other. Our everyday lives are filled with negotiation, from negotiating for vegetable price to negotiating salaries. The parties realise that the cost of dragging a dispute for long and taking it to the court, and understand the benefits of negotiating and reaching a solution that will benefit both parties, thus creating a win-win situation.

The process of Mediation is facilitated by a third party neutral who assists two or more disputing parties to reach a solution. Mediators doe not take sides and their only aim is to resolve the issue. This is again a very real life situation wherein a third person intervenes between two feuding parties and explains to them the long term benefits of ending the dispute and making the parties reach a solution. Several husband wife matrimonial disputes have been resolved by a third party like this, with or without terming it as mediation. The process is entirely voluntary.

In fact the concept of arbitration, which is very much a formal process like courts, can also be traced back to ancient Greek mythology, wherein an arbitrator was chosen to resolve dispute between two parties through amicable settlement (much like negotiation and mediation). If this didn’t work out then the arbitrator was to adduce evidence of parties, and later on deliver a judgement based on the facts and evidence. This decision could later be appealed against by parties.

Thus, it is very clear that these processes have been part of our systems for very long and the Pound Conference 1976 was instrumental in formally pushing the idea of ADR mechanism, as a respite for parties from the Court systems and lessening the burdens for Courts as well. The Conference was followed by a series of conferences about Alternative Dispute Resolutions.

The idea of ADR has gained momentum since then throughout the world. ADR was not just an efficient way of resolving disputes, it has also come as a tool to change people’s mindset about disputes and resolving it, by looking at the bigger picture.

  1. ODR

ODR began its existence is Online ADR, an amalgamation of technology and ADR. It is a network based equivalent of offline face-to-face dispute resolution processes like negotiation, mediation and arbitration.[3] The idea of Online Dispute Resolution emerged out of the understanding that disputes will grow as the range of online activities grew. In fact, it was very well understood that Internet was part of the problem in generating disputes. However, it was also to be part of the solution in garnering resources to resolve it online.

As already pointed out that the first few years of internet witnessed few cases. In fact, after the decommissioning of Internet in 1990 for commercial activity few disputes relating to online commerce began to surface.

In April, 1994, the first commercial spam occurred when two lawyers tried to recruit clients to participate in an immigration scam.[4] Sometime later, in September, 1994, the U.S. Federal Trade Commission filed its first case of online fraud. The case involved an American Online subscriber who advertised that for $99.00 he could show people how to create new credit files at all the major credit bureaus. However the process was not considered to be legal and he had to provide compensation to consumers. There were other instances like this.

Around the same time in 1996, first articles on ODR began to appear in a Law Review[5] and the National Centre for Automated Information Research (NCAIR) sponsored the first ever conference on ODR, which also funded the ODR projects like the Virtual Magistrate, Online Ombuds at University of Massachusetts. A year after this Hewlett Foundation established Centre for Information Technology and Dispute Resolution with the goal of supporting development of the field of ODR by various initiatives.[6] Since then several conferences, seminars around the world have happened with ODR as the central topic.

A big breakthrough happened in the field of ODR when e-bay founded in 1995 by Pierre Omidyar, put a feedback system where buyers could know more about the seller, in order to generate trust and risk reduction. The feedback was a big step in generating confidence in the buyers and also eliminating disputes between buyers and sellers. Taking this further, in 1999 e-bay asked University of Massachusetts to conduct a pilot project to mediate disputes between buyers and sellers.[7] The pilot project was huge success as it handled two hundred disputes in a two week period, by far the largest number of disputes ever handled online till then. This prompted e-Bay to include dispute resolution as an option for buyers and sellers in the event a transaction were unsuccessful, making it the first company ever to do this. Initially, eBay’s dispute resolution process was contracted out to an Internet start-up, Square Trade. Square Trade which used new methods like employing web rather than email as means of communication, and also technology supported negotiation before requesting for a mediator.

Several years later the resolution process was taken over by eBay itself. By 2010, the number of disputes handled by eB-ay reached the extraordinary figure of sixty million.[8]

According to a BBC report in 2015, e-bay has the most advanced and workable online dispute resolution system that jurisdictions such as Wales and England should adopt to evade the various civil court proceedings. The ODR conference (2016) also ranked e-Bay’s ODR as the largest in the world. The methodology used by the company has prevented 90% of the disputes from making it to the courts. It is very clear the e-bay is a trendsetter in the field of Online Dispute Resolution. Not just other companies, but other countries have also taken inspiration from e-bay and understood what a long leap dispute resolution can take with the help of technology.

Some countries such as U.K have somewhere taken inspiration from this and tried to imbibe the ODR systems in their territories, in similar or different formats. United Kingdom has tried to embrace the e-Bay approach, but they have opted to use judges to resolve the conflicts due to the existing laws. It is apparent that such a methodology is expensive and time-consuming, and can be made more dynamic and easy for the users of the ODR system.

ODR in the current state is also being used as a hybrid mechanism between online and offline by various institutions. E.g. UDRP dispute resolution happened without face to face meetings except sometimes through telephones. Some ODR providers use limited internet. One of the earlier dispute resolution providers eResolution.com employed a completely online system but stopped handling cases in 2001. Currently World Intellectual Property Organisation (“WIPO”) and National Arbitration Forum (“NAF”) have online systems where emails are sometimes used as well.

  1. FUTURE OF ODR

Technology is undergoing a change rapidly. What is the best technology today might get outdated tomorrow. It will become faster and cheaper. There was a time when ADR was introduced and the world took time to adapt to it, and when it did, it realised what power it brought to the whole process of dispute resolution as well as to the parties. In ADR parties are in charge of their cases. ODR furthers this power of resolving disputes without putting a pause in one’s life. A party who was once entangled in a case would have innumerable things to worry about, cost, travel, time, attending courts, so much so that the dispute would become central to his/ her existence. ODR, in its present form, takes away all the above mentioned hassles. The ongoing pandemic has suddenly made us face a situation where the world would have been lost, if not for technology and Internet. The need for ODR hasn’t been felt more.

ODR in future, is believed to be not just an extension of ADR, but bringing in whole different dynamics altogether. ODR tomorrow might not just be about making the technology speedier or less costly but also smarter in data processing. If that happens, the trajectory of ODR, popularly known as the “Fourth Party” would be very different from what we fathom today. The wider acceptance of ODR would also mean bringing on board very many pre litigation stage cases where parties are comfortable to get their future disputes resolved.

Organizations in the future would be adopting business policies for inclusion of ODR system. Although online mediation has received criticisms because of its impersonal attribute, in future it will not be perceived so because we are looking at a world where every transaction and communication will be happening online, and that is going to be the normal.

In future court may also realise the value addition of ODR as part of the system rather than different from it. In fact, economies might realise the benefits of an ODR system over the current Court system. There will always be a need of Courts to resolve certain kinds of matters but there will also be matters which would not need the adversarial approach of the Courts, and the parties would be happy to resolve it using technology. This balancing act would be great in resolving as much number of disputes as we can.


[1]Orna Rabinovich-Einy & Ethan Katsh, Digital Justice: Reshaping Boundaries in Online Dispute Resolution Environment, International Journal of Online Dispute Resolution, Eleven international publishing, Vol 1, 2014, pp. 6

[2] Karolina Mania, Online dispute resolution: The future of justice, International Comparative Jurisprudence, Vol 1 2015, pp76-86

[3] Orna Rabinovich-Einy & Ethan Katsh, Digital Justice: Reshaping Boundaries in Online Dispute Resolution Environment, International Journal of Online Dispute Resolution, Eleven international publishing, Vol 1, 2014, pp. 7

[4] Ethan Katsh, Bringing Online Dispute Resolution to Virtual Worlds: Creating Processes Through Code, New York Law School Law Review, Vol. 49 Issue 1, January 2004, pp 271- 291

[5] E.Katsh, “Dispute Resolution in Cyberspace”, 28 Conn. L. Rev.(1996) 953; E.C. Lide,“ADR and Cyberspace: The Role of Alternative Dispute Resolution in Online Commerce, Intellectual Property and Defamation”, 12 Ohio St. J. On Disp. Resol. (1996) 193.

[6] <www.odr.info>

[7] E. Katsh, J. Rifkin and A. Gaitenby, “E-Commerce, E-Disputes, and E-Dispute Resolution: In the Shadow of eBay Law”, 15 Ohio St. J. On Disp. Resol. (2000), pp. 705, 708-709.

[8] Ethan Katsh, ODR: A Look at History: A Few Thoughts About the present and Some Speculation About the Future 


Author: Shivani Verma, Head of Legal Operations at JustAct.


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