Online Dispute Resolution Meets the Needs of Modern Business

Aug 3, 2007

Marcia Gulesian

ODR (online dispute resolution) has the potential to revolutionize dispute resolution not only in business-to-business and business-to-consumer e-commerce transactions but in intra-enterprise transactions as well.

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An understanding of ODR can better equip the CIO and his or her colleagues to weigh their level of investment in IT privacy, security, performance, and like matters against the potential costs of ODR. An under investment in the former can increase their risk of needing the latter.

ODR covers a broad spectrum of new emerging modalities. One of the leading academic writers on this subject has defined ODR as "the application of dispute resolution skills and resources over a network."

To truly understand the promise of ODR, it is first necessary to look at the “explosions” that have spawned it: alternative dispute resolution (ADR), e-commerce, and the Web. Readers of this article are no stranger to e-commerce and the Web but, for the most part, not ADR.

ADR covers a wide range of processes used to resolve disputes short of litigation, including the most common, mediation, arbitration and negotiation. The hypertext links found throughout this article connect to a good deal of additional information on ODR and ADR in particular.

The rise of ADR in the twentieth century has led participants in the litigation system to view conflict in an entirely new way, with a goal of producing win-win solutions for the disputants, rather than the win-lose result available in court.

Thirty-years ago, with the possible exception of Harvard, law schools did not recognize nor value the use of ADR processes. And, just a little over a decade ago, the American Bar Association created a section on dispute resolution, the first new section in more than 19 years. Today, all major law firms have practice groups that specialize in ADR.

New Types of Disputes

Many businesses are facing types of disputes they’ve never had to deal with before:

  • Transactions take place all over the world, sometimes between buyers and sellers that have never met face-to-face. Inevitably, one-to-three percent of these transactions will go awry. When you’re in the same town you can drive over and work the dispute out with the other side, or maybe take the matter to court if it gets complicated. How do you resolve a dispute with someone tens of thousands of miles away, who may not even speak the same language?
  • Internal work teams these days frequently interact entirely online, perhaps involving telecommuters or overseas partners. Projects are passed around the globe on 24-hour work cycles. Just like in the real world, workplace disputes can arise between the members of the group. But where is the workplace? How can those disputes get resolved before they escalate?
  • Companies put up a website and it can instantly be accessed all around the world. The website may gather information from users in dozens of countries, all of which have different laws regarding confidentiality and privacy. How can a company meet its obligations to respond effectively to user complaints when its users are on five continents?
  • In all these circumstances the monetary value under dispute may be less than the cost of convening the disputants in the same room, maybe less than the cost of a teleconference. It may even be that the value of the dispute is impossible to determine.

    The online-only dispute is a new type of dispute. It can develop between businesses and customers, suppliers, regulators, and insurers. It can emerge between strangers or between partners. Almost any business that does business online will increasingly become entangled in these kinds of disputes.


    Here's a starter bibliography that provides some real-world discussions of the topics introduced above:

  • Technical Aspects of Online Dispute Resolution
  • Linking Information Technology and Dispute Resolution
  • Uniform Domain Name Dispute Resolution
  • The National Center for Information Technology and Dispute Resolution
  • Accept conflict as normal. People too often associate conflict with dysfunction, but heated discussions are necessary for business success. As everyone knows, unresolved conflicts can quickly spiral out of control and require the support of a third party. So, to avoid this outcome, plan dispute resolution strategies before a blowout takes place.

    Marcia Gulesian has served as software developer, project manager, CTO, and CIO over an eighteen-year career. She is author of well more than 100 feature articles on IT, its economics, and its management, many of which appear on CIO Update.


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