Report on the Third Annual Forum on Online Dispute Resolution*

Claro V. Parlade

Executive Director, Cyberspace Policy Center for Asia-Pacific, Philippines

          Harmonization of the legal and regulatory systems for e-commerce in the Asia and the Pacific is one of the most daunting challenges for its policy-makers in the information age.  It wasn’t too long ago when electronic commerce exploded into the scene, radically altering business, government and society. The internet and the world wide web opened a universe of information to all, and the public celebrated the countless opportunities for commerce, entertainment and communication offered by this virtual environment, free from temporal and geographic constraints. 

It was just a matter of time, however, before an offline reality surfaced in the online environment – wherever there is commerce or any form of social interaction, disputes may and do arise.  Unfortunately, even seemingly simple disputes can be complicated by issues of overlapping and conflicting regulations from various jurisdictions.

Many hailed the exponential growth of e-commerce, sometimes overlooking the fact that, for all the revolutionary traits of the internet, public support and use of that amazing medium relies upon trust and confidence which is undermined by the lack of a dispute resolution mechanism. Clearly, neither online commerce nor online social interaction can thrive in the long term without any mechanism by which disputes can be resolved or even avoided.

            The United Nations has played a key role in promoting awareness of, and discussion of issues relating to, online dispute resolution.  In 2002, the United Nations Economic Commission for Europe (UNECE) organized the first Forum on Online Dispute Resolution at Palais des Nations, Geneva.  The Forum brought together international institutions such as the OECD, ITU, ICC, ITC, WIPO, UNCTAD, UNCITRAL, and UNECE, as well as representatives from chambers of commerce, universities, private industry and government from different parts of the world, to discuss new initiatives for the development of online dispute resolution.  Since then, the forum has become an annual event, and this year, the 3^rd Annual Forum on Online Dispute Resolution was hosted by the International Conflict Resolution Centre (ICRC) at the University of Melbourne in collaboration with the United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP).

The high priority conferred by the United Nations to ODR is in recognition not only of the pressing need for a viable dispute resolution mechanism for online transactions that are often cross-border in nature, but also of the potential of ODR for improving access to and quality of justice, whether through streamlining the administration of justice through the court system or by providing more efficient and effective dispute resolution options both for online and offline disputes.  In the welcome remarks of Mr. Kim Hak-Su at the 3^rd Annual Forum on ODR, he highlighted the debate on the role of governments in ODR, and the work that has to be done with respect to the development of the regulatory framework, norms, and standards for ODR.

            I am pleased to report that the 3^rd forum was highly successful, covering an unprecedented range of matters and issues relevant to online dispute resolution.  Prof. Ethan Katsh, Chairman of the UN Expert Group on ODR, recounted the history of ODR, from the experimental stage from 1996-2000 when initiatives like the Virtual Magistrate and the Online Ombudsman Office were launched, to the entrepreneurial stage beginning in 2000, when commercial ODR services were launched.  He noted how ODR has evolved as a service: its application has expanded from resolution of online disputes to offline disputes; from an e-commerce to an e-government application; from a mechanism to resolve simple two-party disputes to one that can handle complex multi-party disputes.

            Melissa Conley Tyler of the International Conflict Resolution Center, University of Melbourne, Australia, reported that 115 ODR sites have been launched to date, out of which 82 are still operational. That 28 new sites or services were launched between 2003 to 2004 is indicative of the rising vitality of the sector.  Many of these sites offered facilitative processes like online conciliation and mediation, or determinative processes like online arbitration.  Some offered advisory services like neutral evaluation.  The count did not include sites which merely enabled the downloading of a complaint form or submission of a complaint without any significant portion of the dispute resolution process carried out in the online environment.

            More than thirty ODR scholars, experts and practitioners from all over the world discussed issues and shared regional as well as commercial perspectives on ODR.  Several themes emerged from  the presentations and the inputs provided by the participants.  Some noted the significance of the personal and human dimension to ODR, how it may affect effectiveness and acceptance of ODR as a service. Closely related is the theme of ODR and culture, which ran in any presentations, explaining how online transpositions of dispute resolution processes may fail to take into account or accurately interpret both verbal and non-verbal cues because of cultural differences.

            Another theme was the relationship between ODR and Alternative Dispute Resolution.  Many, although not all, ODR services are basically online transpositions of ADR processes like arbitration and mediation.   Thus, many skills used in ADR and ODR are similar such that the quality of ODR depends somewhat upon the quality of ADR available to the public.

Transposition, however, is not a cut-and-dried process due to differences between the characteristics of the online and offline environment, and there may be considerable difficulty in achieving the same results from the online transposition of an offline procedure.  One of the challenges of ODR is the constant redefinition of the roles of neutrals and of technology, to discover and establish better ways by which ODR providers may exploit the benefits of technology in resolving disputes efficiently and effectively.

            ODR’s role in improving access to justice was emphasized by several speakers.  The road towards the achievement of a vision and current implementation of “e-Courts” was discussed, illustrating a beneficial application of ODR technology in the court system.  Others discussed ODR as a complement to the judicial system,  a service that will increase access to justice.  In either case, the role of government in establishing the appropriate regulatory framework and in promoting ODR as a service to the public needs to be examined further.  This issue was also raised in the context of other recurring themes – the economics of ODR and technology.  Whose task is it to spread the benefits of ODR to those who do not have the “luxury of technology”?

Finally, numerous applications of ODR were described in various presentations, including consumer ODR, ODR for domain name disputes, financial services ODR, ODR and e-government, while some explored the possibility of applying ODR concepts for conflict transformation and management.

            A lively exchange of ideas from the participants concerning visions of what needs to be achieved preceded the closing of the conference.  While a consensus on a plan of action may be premature at this point, there appeared to be strong sentiments favoring further research and other initiatives pertaining to enhancing the quality and diversity of ODR services, ensuring sustainability, improving links and infrastructure, as well as the range and depth of current applications.  Some of the interesting suggestions are:

(1)               improvement of quality of ODR by continuing professional development of neutrals and the formulation of codes of conducts and feedback loops;

(2)               enhancing sustainability by the use of appropriate technology to make services affordable, solicitation of support from governments and grant agencies, and continuing research;

(3)               addressing the need for diversity in ODR by encouraging services to utilize multiple languages and neutrals to be trained in cross-cultural competency;

(4)               promotion of linkages that will facilitate the adoption of ODR, e.g., setting up of ODR professional organizations and reaching out to groups not currently involved in ODR;

(5)               explore options to strengthen technical infrastructure for ODR, particularly with respect to improving access; and,

(6)               continuing development of ODR applications for specific industries implemented in a manner that is intuitive, culturally sensitive, scalable and platform-neutral.

One of the speakers, Colin Rule, Director for Online Dispute Resolution of eBay, described the forum as a watershed event to which we will look back years from now as the point when we began to regard and build ODR as an institution.  E-commerce, which is still the strongest driver of ODR, is gearing up for a second wave. Significantly, as Mr. Kim Hak-Su noted, internet users in Asia and the Pacific now account for over a third of all Internet users in the world, and the volume of Business-to-business (B2B) e-commerce transactions in the region is expected to reach $300 billion for 2004.  Development of ODR as a mature institution equipped to handle the demands of this second wave, although but a part of challenge, is unquestionably a concern that must be given utmost priority.

            As we continue to undertake harmonization efforts for legal and regulatory systems, it is imperative that we consider how our respective governments can accelerate the development of ODR, whether it is through the establishment of an internationally and functionally interoperable regulatory framework, the establishment of standards for ODR, or generally taking a proactive role in promoting its use and development, both in the private sector and in the administration of its services.