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LIENS
Titre:
Disputes in the Digital era
The evolution of dispute resolution and the model ODR system
JURY
Professeur Jacques Larrieu, Université Toulouse 1
Professeur Arnaud Raynouard, Université Paris Dauphine
Professeur Patrina Paparigopoulos, National & Kapodistrian University of Athens
Professeur Michel Attal, Université Toulouse 1
3
Abstract
In i t i a l l y, d i s p u t e s o c c u r r e d b e t w e e n p a r t i e s w i t h g e o g r a p h i c a l
p r o x i m i t y a n d f o r w h i c h t r a d i t i o n a l co u r t s w e r e t h e p r i n c i p a l
i n c r e a s e d i n n u m b e r , b e c a m e m o r e c o m p l ex a n d i n c r e as i n g l y
A l t e r n a t i v e D i s p u t e R e s o l u t i o n ( A D R ) w a s e m p l o ye d . H o w e v e r ,
d i s p u t es e v o l v e d o n c e m o r e w h e n t h e w o r l d e n t e r e d i n t o t h e
d i g i t a l e r a . N o t o n l y d i s p u t e s b e c a m e ye t a g a i n i n c r e a s i n g l y
c r o s s - b o r d e r , b u t n e w d i s p u t e s a p p ea r e d t h a t a r o s e s o l e l y i n
c yb e r s p a c e . In o r d e r t o s a t i s f y t h e r e q u i r e m e n t s o f t h e d i g i t a l
e r a , d i s p u t e r e s o l u t i o n b r o u g h t f o rt h t h e c o n c e p t o f O D R . O DR
a r o s e f r o m t h e c o m b i n a t i o n o f A D R a n d t h e In f o r m a t i o n a n d
C o m m u n i c a t i o n T e c h n o l o g y ( IC T ) o f t h e d i g i t a l e r a . A l t e r n a t i v e
m e a n s o f d i s p u t e r e s o l u t i o n w e r e t r a n s fe r r e d t o t h e v i r t u a l w o r l d
and gave birth to Online Dispute Resolution. ADR and ODR are
4
examined e x t e n s i v e l y, and the examination includes their
c o n c e p t s , t h e i r o r i gi n , t h e m a i n f o r m s o f n e g o t i a t i o n , m e d i a t i o n
T h e t h e s i s i l l u s t r a t es t h e e v o l u t i o n o f d i s p u t e s a n d d i s p u t e
f a c e t o f a c e , t o t h e “ d i g i t a l ” e r a , w h en d i s p u t e s a r e r e s o l v e d i n
c yb e r s p a c e . It d e m o n s t r a t e s t h a t OD R i s a n e c e s s i t y o f t h e
d i g i t a l e r a b u t a l s o t h a t i t h a s t h e p o t e n t i a l t o b e a r e v o l u t i o n a r y,
b e t h e f u t u r e o f d i s p u t e r e s o l u t i o n . B a s e d o n t h e e x p er i e n c e
p r o p o s a l f o r t h e OD R s ys t e m . T h e t h e s i s d e s c r i b e s t h e O D R
s ys t e m , f r o m i t s t h r e e s t e p p r o c e s s a n d t h e n e c e s s i t y o f o n l i n e
a r b i t r a t i o n , t o t h e O D R n e t wo r k , t h e r e g u l a t i o n o f t h e O D R
s ys t e m , t h e t e c h n o l o g i c a l a r c h i t e c t u r e o f O D R p r o v i d e r s , t h e i r
t r u s t s o t h a t O D R fu l f i l s i t s f u l l e s t p o t e n t i a l .
5
Acknowledgments
T h i s p r o j e c t i s t h e r e s u l t o f f o u r ye a r s o f r e s e a r c h f o r a
P h D d i s s e r t a t i o n , wh i c h I s u c c e s s f u l l y s u b m i t t e d i n N o v e m b e r o f
r e s e a r c h , P r o f e s s o r M i c h e l A t t a l at t h e U n i v e r s i t y o f T o u l o u s e 1 ,
w h o f i r s t i n t r o d u ce d m e t o t h e s u b j e c t o f D i s p u t e r e s o l u t i o n
6
List of abbreviations and acronyms
AAA A m e r i c an A r b i t r a t i o n A s s o c i a t i o n
ABA American Bar Association
ADR Alternative Dispute Resolution
AI Ar t i f i c i a l In t e l l i g e n c e
AOL Am e r i c a O n l i n e
BBB Better Business Bureau
B IO A B r i t i s h a n d Ir i s h
Om b u d s m a n A s s o c i a t i o n
CERD C e n t r e f o r E f fe c t i v e D i s p u t e R e s o l u t i o n
CLI C yb e r s p a c e La w In s t i t u t e
CRDP C e n t r e d e re c h e r c h é e n d r o i t p u b l i c
C IE T A C C h i n a In t e r n a t i o n a l E c o n o m i c a n d
T r a d e Ar b i t r a t i o n C o m m i s s i o n
ECC-Net European Consumer Centre Network
E C O D IR Electronic Consumer Dispute Resolution
EDI E l e c t r o n i c D a t a In t e r c h a n g e
FAA Federal Arbitration Act
G U ID E C General Usage for
In t e r n a t i o n a l D i g i t a l l y E n s u r e d C o m m er c e
HTTP H yp e r T e x t T r a n s f e r P ro t o c o l
IC A N N In t e r n e t C o r p o r a t i o n f o r
As s i g n e d N a m e s a n d N u m b e r s
IC C In t e r n a t i o n a l C h a m b e r o f C o m m e r c e
IC D R In t e r n a t i o n a l C e n t e r f o r
Dispute Resolution
IC S ID In t e r n a t i o n a l C e n t r e f o r t h e
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S e t t l e m e n t o f In v e s t m e n t d i s p u t e s
IC T In f o r m a t i o n a n d C o m m u n i c a t i o n s T e c h n o l o g y
IM In s t a n t M e s s a g i n g
IS P s In t e r n e t S e r v i c e P r o v i d e r s
JAMS J u d i c i al A r b i t r at i o n a n d
M e d i a t i o n S e r v i ce s
LC IA Lo n d o n C o u r t o f
In t e r n a t i o n a l A r b i t r a t i o n
NAF N at i o n a l A r b i t r a t i o n F o ru m
N C A IR National Center for Automated
In f o r m a t i o n R e s e ar c h
ODR On l i n e D i s p u t e R e s o l u t i o n
OECD O r g a n i z a t i o n fo r
Economic Co-operation and Development
OOO Online Ombuds Office
PKI P u b l i c K e y In f r a s t r u c t u r e
SSL S e c u r e S o c k e t La ye r
TACD Trans-Atlantic Consumer Dialogue
U C IT A U n i f o r m C o m p u t e r In f o r m a t i o n
T r a n s a c t i o n s Ac t
UDRP U n i f o r m D o m ai n N am e
Dispute Resolution Policy
UETA U n i f o rm E l e c t r o n i c T r a n s a c t i o n s A c t
U N C IT R A L United Nations Commission on
In t e r n a t i o n a l T r a d e La w
VMP Virtual Magistrate Project
W IP O W o rl d In t e l l e c t u a l P r o p e r t y O r g a n i z a t i o n
WTO World Trade Organization
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Contents
Introduction … … … … … … … … … … … … … … … … … … … . p . 1 5
C h a p t e r 2 : Fo r ms o f A D R … … … … … … … … … … … … … … p . 5 1
Section 1: Negotiation…………………………………………….p.52
Section 2: Mediation……………………………………………….p.61
A. Wh a t i s M e d i a t i o n ? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . p . 6 1
B. Choosing Mediation…………………………………………p.69
C. T h e M e d i a t i o n p r o ce s s … … … … … … … … … … … … … … . . p . 7 6
D. The Mediator…………………………………………………p.78
E. The settlement……………………………………………….p.86
S e c t i o n 3 : A r b i t r a t i o n a n d t h e h yb r i d f o r m s … … … … … … … … p . 8 8
A. Wh a t i s A r b i t r a t i o n ? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . p . 8 9
B. Choosing Arbitration……………………………………..p.103
C. The Arbitrator……………………………………………..p.105
E. T h e h y b r i d f o r ms … … … … … … … … … … … … … … … … . . p . 1 0 8
9
i. Conciliation………………………………………………..p.108
ii. Mini-Trials………………………………………………….p.112
iii. Med-Arb……………………………………………………..p.118
iv. Ombudsman…………………………………………………p.122
C h a p t e r 3 : A d v a n ta g e s a n d d r a w b a c k s o f A D R … . … … . p . 1 2 6
A. Confidentiality……………………………………………..p.127
C. Conciliatory function……………………………………..p.129
D. Flexibility…………………………………………………..p.132
B. F o r t h e P r o c e d u r e… … … … … … … … … … … … … … … … p . 1 3 6
C. For Arbitration…………………………………………….p.137
D. Remarks……………………………………………………..p.139
a n d t h e v ar i o u s IC T t o o l s … … … … … … … … … … … p . 1 6 1
A. Online Negotiation………………………………………..p.177
B. Online Mediation…………………………………………..p.183
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C. Online Arbitration…………………………………………p.188
E x a mp l e s o f O D R p r o v i d e r s … … … … … … … … … … … … p . 1 9 6
S e c t i o n 1 : T h e Vi r t u a l M a g i s t r a t e P r o j e c t ( V M P ) … … … … … p . 1 9 8
S e c t i o n 3 : C yb e r T r i b u n a l … … … … … … … … … … … … … … … . . p . 2 0 5
S e c t i o n 5 : T h e In t e r n e t C o r p o r a t i o n f o r A s s i g n e d N a m e s
An d N u m b e r s ( IC A N N ) … … … … … … … … … … … . . p . 2 1 2
S e c t i o n 1 : A d v a n t a g e s o f O n l i n e Di s p u t e R e s o l u t i o n … … … p . 2 1 8
A. Time savings………………………………………………..p.219
B. Cost savings………………………………………………..p.221
C. Access to justice…………………………………………...p.223
D. Convenience………………………………………………..p.226
E. Flexibility…………………………………………………..p.230
A . P r a c t i c a l c h a l l e n g es … … … … … … … … … … … … … … … … p . 2 3 3
B . A u t h e n t i ci t y , d a t a s e c u r i t y a n d c o n f i d en t i a l i t y … … … … . . p . 2 4 3
C . E n f o r c e m e n t o f O DR d e c i s i o n s
a n d S e l f - e n f o r c e m e n t m e c h a n i s ms … … … … … … … … … … . p . 2 4 8
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i. S e l f - e n f o r c e m e n t me c h a n i s m s b a s e d o n
Technical control…………………………………………p.253
ii. S e l f - e n f o r c e m e n t me c h a n i s m s b a s e d o n
R e p u t a t i o n i n c e n t i ve s … … … … … … … … … … … … … … . . p . 2 5 4
1. Feedback systems…………………………………………..p.255
2. Trustmarks…………………………………………………..p.256
iii. S e l f - e n f o r c e m e n t me c h a n i s m s b a s e d o n
Financial control………………………………………….p.258
S e c t i o n 1 : A m u l t i -s t e p p r o c e s s … … … … … … … … … … … … . . p . 2 7 1
S e c t i o n 2 : O n l i n e Di s p u t e P r e v e n t i o n … … … … … … … … … … p . 2 7 7
S e c t i o n 3 : T h e U NC IT R A L e x a m p l e … … … … … … … … … … . . p . 2 8 1
C h a p t e r 2 : O n l i n e a r b i t r a t i o n a s th e f i n a l s t e p o f th e
process…………………………………………..p.284
A . O n l i n e a r b i t r a t i o n ve r s u s l i t i g a t i o n
B . O n l i n e a r b i t r a t i o n ve r s u s o t h e r O D R m et h o d s . … … … … . p . 2 9 2
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and the written requirement ………………………………..p.298
S e c t i o n 2 : T h e U DR P ex a m p l e … … … … … … … … … … … … … . p . 3 2 9
C h a p t e r 1 : T h e O DR n e t w o rk … … … … … … … … … … … . p . 3 4 2
S e c t i o n 1 : A n i n t e rn a t i o n a l n e t w o r k … … … … … … … … … … . . p . 3 4 2
Section 2: Clearinghouses……………………………………….p.347
C h a p t e r 2 : R e g u l a ti o n a n d g u i d e l i n e s … … … … … … … … p . 3 5 4
A. Governmental regulation…………………………………….p.356
B. Self-regulation ………………………………………………..p.360
i. Self-regulation in action………………………………….p.362
C. Co-regulation………………………………………………….p.369
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Section 2: ODR guidelines ……………………………………..p.371
S e c t i o n 3 : T h e p ri n c i p l e s o f O D R … … … … … … … … … … … … p . 3 8 1
B. Transparency ………………………………………………….p.385
C h a p t e r 3 : t h e O DR p r o v i d e r … … … … … … … … … … … . . p . 3 9 7
S e c t i o n 1 : T h e O DR f u n d i n g … … … … … … … … … … … … … … . p . 3 9 7
C. Safeguards……………………………………………………..p.401
E. Solutions………………………………………………………..p.404
A. Accessibility …………………………………………………..p.407
C. Security…………………………………………………………p.411
A. Awareness………………………………………………………p.414
B. Trust ……………………………………………………………p.417
C. Solutions………………………………………………………..p.421
Conclusion … … … … … … … … … … … … … … … … … … … . . p . 4 2 4
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Introduction
D i s p u t e s ex i s t e d a s l o n g a s h u m a n s . D i s p u t e s a r e t h e r e s u l t
c o m m e r c i a l e n v i r o n m e n t , 2 t o a n y o n l i n e c o m m u n i t y. T h e r e ’ s n o
d i s p u t es p e o p l e a l w a ys f o u n d w a ys t o r e s o l v e t h e m . A l t h o u g h
t h e r e h a v e a l w a ys b e e n e x t r a - j u d i c i al w a ys o f d i s p u t e r e s o l u t i o n ,
d i s p u t es w e r e f e w e r i n n u m b e r a n d u s e d t o a r i s e m o s t l y i n s i d e
h u m a n i t y e v o l v e d a n d t h e w a y p e o p l e c a m e i n t o c o n t ac t a n d
c o m m u n i c a t e d c h a n g e d r a d i c a l l y; c o n s e q u e n t l y d i s p u t e s ev o l v e d
1
“The basic premise of conflict was always the same: an expressed struggle between at least two
interdependent parties who perceive scarce resources, incompatible goals and interference from
the other party in achieving their goals” See KATSH Ethan, Dispute Resolution in Cyberspace,
Connecticut Law Review, vol. 28, 2006, p. 953.
2
“Disputes are a fact of life in business. In fact, businesspeople often benefit from conflict, as it
can result in energy, motivation, productivity, and creativity. The challenge lies in managing
conflict so that it doesn’t impede progress, or worse, destroy the capacity to achieve business
goals”. See RULE Colin, Online Dispute Resolution For Business: B2B, E-commerce, Consumer,
Employment, Insurance, and other Commercial Conflicts, (John Wiley & Sons) 2002, p. 1.
15
in parallel. People started to travel longer distances, interact
t o i n v o l v e m u c h m o r e c o m p l ex t h a n e v er y d a y i s s u e s .
dispute resolution grew even more. During the last quarter of the
d r a s t i c a l l y a n d s e v e r a l m e t h o d s o f AD R w e r e i n c r e a s i n g l y u s e d
t o r e s o l v e a l l k i n d o f d i s p u t e s , wi t h m o r e r e p r e s e n t a t i v e a m o n g
a d v a n t a g e s o u t w e i g h e d a n y p o t e n t i a l d i f f i c u l t i e s . A DR m e t h o d s
a l l o w e d f o r c o n s i d e r a b l e t i m e a n d c o s t s a v i n g s , c o n fi d e n t i a l i t y
i n t e r n e t , t h e w a y o f c o m m u n i c a t i o n a n d w i t h i t t h e n at u r e o f
d i s p u t es e v o l v e d o n c e m o r e . T h e w o r l d e n t e r e d t h e d i g i t a l e r a a s
and a whole virtual world was created in parallel with the real
16
world. The vast technological d e v el o p m e n t and the rapid
d i s s e m i n a t i o n o f i n fo r m a t i o n i n f l u e n c e d t h e n a t u r e o f d i s p u t e s a s
In f o r m a t i o n and Communication T ec h n o l o g y 3 a l l o w fo r an
o v e r w h e l m i n g f l o w o f i n f o r m a t i o n wh i c h e n a b l e s p a r t i e s t o
p e r f o r m , r a t h e r e a s i l y, l i m i t l e s s t r a n s ac t i o n s a r o u n d t h e w o r l d . 4
t r a n s a c t i o n , i n s t a n t l y, w i t h t h e p u s h o f a b u t t o n . Un f o r t u n a t e l y,
i n t h e c yb e r w o r l d , a s e a s i l y a s i n t h e r e a l w o r l d , t h e s e
i n t e r a c t i o n s c a n r e s u l t t o d i s p u t e s , o v er m a t t e r s a s d i v e r s e a s t o
i t e m s o f p ri v a c y, s e r v i c e q u a l i t y, d e f a m a t i o n a n d i n t e l l e c t u a l
properties.
c r e a t e d n e w k i n d s o f d i s p u t e s b u t al s o c h a n g e d t h e n a t u r e o f t h e
a n d n e w d i s p u t e s a ro s e , t h i s t i m e b o r d e r l e s s , a s t h e v i rt u a l w o r l d
k n o w s n o b o u n d a r i e s . D i s p u t e s i n c r e as e d i n n u m b e r a s an yo n e
t h e i n t e r n e t . N e w d i s p u t es o f l e s s e r v a l u e a r o s e , f o r w h i c h n o
3
Hereafter will be referred as ICT.
4
DOMENICI Kathy, Mediation: Empowerment in Conflict Management Prospect, (Height:
Waveland Press, Inc.), 2006, p. 18.
5
Disputes arising from e-commerce i.e. transactions over the Internet and m-commerce i.e.
transactions through the use of a mobile device.
17
d i s p u t e r e s o l u t i o n w e r e u n e q u i p p e d a n d i n a d e q u a t e t o ad d r e s s
a n d r e s o l v e t h e s e d i s p u t es . T h e n e e d f o r a s ys t e m c a p a b l e t o
a d a p t t o t h e n e w w a ys o f c o m m u n i ca t i o n f o r t h e r e s o l u t i o n o f
d i s p u t es b e c a m e i n c r e a s i n g l y a p p a r e n t d u r i n g t h e p a s t t w o
A s d i s p u t e s e v o l v e d s o d i d d i s p u t e r e s o l u t i o n . Al t e r n a t i v e m e a n s
v i r t u a l w o rl d a n d g a v e b i r t h t o O n l i n e D i s p u t e R e s o l u t i o n . 7
O D R a r o s e f r o m t h e c o m b i n a t i o n o f AD R a n d IC T t o o l s .
d i s p u t e a n d t h e t h i r d n e u t r a l p a r t y. T h e A D R m e t h o d s g a v e b i r t h
a m o n g s t t h e m , o n l i n e n e g o t i a t i o n , o n l i n e m e d i at i o n a n d o n l i n e
a r b i t r a t i o n . M a n y O D R i n i t i a t i v e s we r e b o r n t h e p a s t t w o
d e c a d e s , f r o m t h e V i r t u a l M a g i s t r a t e t o E B a y a n d P a yP a l , w h i c h
a r e c o u n t i n g m i l l i o n s o f r e s o l v e d d i s p u t e s . O D R p r e s e n t ed m a n y
a n d h i g h l y i m p o r t a n t a d v a n t a g e s a l l o wi n g f o r c o n s i d e r a b l e t i m e
i n c r e a s e d c o n v e n i e n c e f o r t h e d i s p u t a n t s . U n f o r t u n a t e l y, b e s i d es
t h e i n v a l u a b l e a d v a n t a g e s , O D R p r e s e n t e d s e v e r a l d r a wb a c k s
6
BENYEKHLEF Karim and GELINAS Fabien, Online Dispute Resolution, Lex Electronica, vol.
10, No. 2, 2005, p. 11.
7
Hereafter will be referred as ODR.
18
s u c h a s t h e u n f a m i l i a r i t y o f u s e r s w i t h t h e n e w IC T t o o l s , t h e
r e l a t i n g t o a u t h e n t i c i t y, d a t a s e c u r i t y a n d c o n f i d e n t i a l i t y b u t
d e c i s i o n s . H o w e v er , a s i s e v i d e n t b y t h e u s e o f t h e t e r m
m o v e m e n t p r o v i d e t h e n e c e s s a r y k n o w l e d g e f o r t h e s t r u ct u r i n g
o f a n O D R s ys t e m t h a t t a k e s a d v a n t a g e o f t h e i n v a l u a b l e
benefits of ODR and at the same time overcomes all the potential
d r a w b a c k s . T h i s r e s e a r c h p r o j e c t a i m s t o d o ex a c t l y t h a t .
T h e t h e s i s i s d i v i d ed i n t o t w o m ai n p a r t s a n d e a c h o f t h e s e
is further divided into two halves and each half into its relevant
p r o v i d e s a n ex t e n s i v e r e s e a r c h t o b o t h A DR a n d OD R . It
d e m o n s t r a t e s t h e e v o l u t i o n o f d i s p u t es a n d t h e a p p e a r a n c e o f
O D R a s a n u n a v o i d a b l e r e s u l t o f t h a t ev o l u t i o n . T h e f i r s t h a l f o f
p r e s e n t a t i o n p u r p o s e s , t h e a n a l o g e r a . It b r e a k s d o w n A D R f r o m
its definition and its evolution during the ages, to its most
19
the way for ODR. The second half of the first part is dedicated
t e c h n o l o g y’ s i m p a c t , t o t h e s h o r t h i s t o r y o f O D R a n d t h e m o s t
i n f l u e n t i a l i n i t i a t i v e s , t o f i n al l y t h e i n v a l u a b l e a d v a n t a g e s o f
d r a w b a c k s t h a t a n y O D R s ys t e m m u s t co m b a t .
t o t h e f i r s t . It p o r t r a ys h o w t h e O D R s ys t e m m u s t b e s t r u c t u r e d
t o t a k e f u l l a d v a n t ag e o f t h e l e s s o n s l ea r n e d f r o m t h e A D R a n d
t h e O D R ex p e r i e n ce , i n o r d e r t o m ax i m i z e t h e a d v a n t a g e s a n d
m i n i m i z e t h e p o t e n t i a l d r a w b a c k s . T h e O D R s ys t e m p r o p o s e d i n
this thesis tackles one by one all the drawbacks faced by ODR.
a n d o n l i n e a r b i t r at i o n i n a m u l t i -s t e p p r o c e s s t h a t a i m s t o
p a r t i c u l a r , m u s t b e t h e f i n a l s t e p o f t h e p r o c e s s , s i n ce o n l y
o n l i n e a r b i t r a t i o n ca n o v e r c o m e o n e o f t h e g r e a t e s t d r a w b a c k s o f
20
o n l i n e a r b i t r a t i o n aw a r d . T h e O D R s ys t e m p r o p o s e d i n t h e t h e s i s
s t r u c t u r e o f t h e O DR s ys t e m . In p a r t i c u l a r , i t p o rt r a ys t h e O D R
a c c r e d i t s O D R p ro v i d e r s t h r o u g h t h e c l e a r i n g h o u s e s a n d i n
O D R s ys t e m p r o v i d e s a n e f f e c t i v e a n d f a i r w a y t o r e s o l v e
d i s p u t es . F u r t h e r m o r e , t h e s e c o n d h a l f e x a m i n e s t h e O D R s ys t e m
t e c h n o l o g i c a l c o n s i d e r a t i o n s , i . e . w h a t IC T t o o l s s h o u l d O D R
O D R i n i t i at i v e s s h o u l d h a v e m a d e t h e u s e o f O D R a co m m o n
p h e n o m e n o n , h o w ev e r , O D R i s s t i l l n o t w i d e l y u s e d . O n e o f t h e
21
as the lack of trust regarding ODR. The last section of the
second part describes all the necessary steps that must be taken
f i n a l l y O D R w i l l r ea c h i t s f u l l e s t p o t e n t i a l .
22
Part 1
t h e o r e t i c a l f o u n d a t i o n f o r O D R . It d e s c r i b e s t h e e v o l u t i o n i n
dispute resolution that created the need for a faster and more
r e c e n t t i m e s . T h e re a d e r w i l l b e t a k e n t h o u g h t a c o m p r e h e n s i v e
a n a l ys i s o f O D R a n d o f t h e e v o l u t i o n i n d i s p u t e r e s o l u t i o n t h a t
T h e f i r s t h a l f e x am i n e s d i s p u t e r e s o l u t i o n i n w h a t i s
t h e u s e o f IC T t o o l s , w h e n d i s p u t e r e s o l u t i o n w a s p e r f o r m e d f a c e
t o f a c e ( t r a d i t i o n a l A D R ) . T h e f i r s t h al f i s e s s e n t i a l , n o t o n l y t o
w i t h t h e t e c h n o l o g i c a l a d v a n c e s o f r e c e n t t i m e s ( In f o r m a t i o n a n d
c o m m u n i c a t i o n t e c h n o l o g y) i s t h e c o r e o f m o s t p l at f o r m s u s e d t o
r e s o l v e d i s p u t e s b y m a n y O n l i n e D i s p u t e R e s o l u t i o n s ys t e m s . 8
8
MUECKE Nial, STRANIERI Andrew and C. MILLER Charlynn, Re-consider: The Integration
of Online Dispute Resolution and Decision Support Systems, in POBLET Marta, Expanding the
23
O D R i n i t i al l y w a s d e v e l o p e d a s s u c h c o m b i n a t i o n a n d e v o l v e d t o
a c o n s t a n t l y d e v e l o p i n g f o r m o f d i s p u t e r e s o l u t i o n t h at u s e s
w h e n c o m b i n e d w i t h IC T t o o l s a n d t r a n s f e r r e d t o t h e o n l i n e
e n v i r o n m e n t . 10
T h e s e c o n d h a l f e x a m i n e s d i s p u t e r es o l u t i o n d u r i n g t h e
ongoing today digital era (ODR). The main weight of the first
p a r t w i l l r e s t o n OD R a n d t h e p ri n c i p a l s u r r o u n d i n g q u e s t i o n s .
b r o u g h t t o t h e w a ys o f i n t e r a c t i o n a n d c o m m u n i c a t i o n . F r o m
t h e r e i t p r o c e e d s t o a n i n d e p t h ex a m i n a t i o n o f O DR , i t s
d e f i n i t i o n , s e v e r a l k e y r e a l w o r l d e x am p l e s o f O DR a n d f i n a l l y
the advantages that advocate the importance of ODR and the few
Horizons of ODR, Proceedings of the 5th International Workshop on Online Dispute Resolution
(ODR Workshop ’08), Firenze: Italy), 2008, p. 1.
9
WAHAB Mohamed S. Abdel, KATSH Ethan & RAINEY Daniel, Online Dispute Resolution:
Theory and Practice - A Treatise on Technology and Dispute Resolution, (Eleven International
Publishing), 2012, p. 23.
10
RULE Colin, op. cit., pp. 35, 36.
24
Title 1
t i m e c o n s u m e d b y t h e c o u r t s , t h e c o m p l ex i t y o f l i t i g a t i o n
settlement b e t w e en t h e d i s p u t a n t s ) d i s c o u r a g e d a n d c o n t i n u e
t o , m o r e a n d m o r e e a c h p a s s i n g d a y, t h e a c c e s s t o t r a d i t i o n al
c o u r t s . 11. A c c o r d i n g t o Lo r d W o o l f , “ t h er e i s a c u t e c o n c e r n o v er
t h e c i v i l c o u rt s . T h e p r o b l e m s a r e b a s i c a l l y t h e s a m e . T h e
p r o c e s s i s t o o ex p e n s i v e , t o o s l o w an d t o o c o m p l ex . It p l a c e s
m a n y l i t i g a n t s a t co n s i d e r a b l e d i s a d v a n t a g e s w h e n c o m p a r e d t o
d e s c r i b e t h e u s e o f m e t h o d s o t h e r t h an l i t i g a t i o n t o r e s o l v e t h e
11
HAMID Nor ‘Adha Binti Abdul, The Alternative Dispute Resolution (ADR): Malaysian
Development And Its State-of-Innovative-Art, 2010, p. 2 available at
http://www.aija.org.au/NAJ%202010/Papers/Hamid%20A.pdf
12
Lord Woolf, Access to Justice, Interim Report, June 1995; Access to Justice, Final Report, July
1996 as seen at ZUCKERMAN A. S. Adrian, Lord Woolf’s Access to Justice: Plus Ça Change....,
Modern Law Review, vol. 59, 1996, p. 773.
25
d i s p u t e . T h e v a r i o u s m e t h o d s i n c l u d ed i n A DR c o v e r a b r o a d
s p e c t r u m t h a t ex t en d s f r o m t e c h n i q u es o f m u t u a l r e s o l u t i o n t o
t h i r d - p a r t y- i m p o s e d s o l u t i o n s . 13 S o m e o f t h e m o s t c o m m o n l y
s e t t l e m e n t c o n f e r e n c e s . 14 O f c o u r s e , i t w o u l d b e i m p r a c t i ca l t o
their online equivalents for that matter; therefore the thesis will
a n a l ys i s o f t h e s e m e t h o d s t a k e s p l a c e i n t h e s e c o n d c h a p t e r o f
t h i s p a r t . T h e fi r s t c h a p t e r i d e n t i f i es A D R a s a c o n c e p t , i t s
c h a r a c t e r i s t i c s , i t s a p p e a r a n c e a n d i t s e v o l u t i o n . F i n a l l y, t h e
disadvantages.
13
SHAMIR Yona, Alternative Dispute Resolution Approaches and their Application, Report for
the joint UNESCO–Green Cross International project entitled “From Potential Conflict to Co-
operation Potential (PCCP): Water for Peace”, 2003, p. 6.
14
RESNIK Judith, Many Doors? Closing Doors? Alternative Dispute Resolution and
Adjudication, Ohio State Journal on Dispute Resolution, vol. 10, No. 2, 1995, pp. 217, 218.
26
Chapter 1
T h e f i r s t c h a p t e r i s d e d i c a t e d t o t h e co n c e p t o f A D R ; i n
p a r t i c u l a r t h e fi r s t s e c t i o n s et s t h e f o u n d a t i o n b y d e f i n i n g A D R .
c o n c e p t i o n t o m o re r e c e n t t i m e s . F i n a l l y, t h e t h i r d s e c t i o n
r e l a t e s t o A D R o f t o d a y, d e m o n s t r a t i n g t h e g r o w t h o f AD R i n
t h e p a s t s e v e r a l ye a r s , f r o m t h e A D R m o v e m e n t i n t h e 1 9 7 0 ’ s t o
p r e s e n t d a y.
a l t e r n a t i v e t o l i t i g a t i o n . S yn o n ym s i n c l u d e e x t r a - j u d i c i a l a n d
t h e s t ri c t r e g u l a t i o n s o f l i t i g a t i o n . Th e a l t e r n a t i v e n a t u r e o f
15
HÖRNLE Julia, Cross-border Internet Dispute Resolution, (Cambridge University Press), 2009,
p. 48.
27
ADR implies that it functions as a complement to litigation
r a t h e r t h a n a s u b s t i t u t e . It i n c r e a s e s a c c e s s t o j u s t i c e s i n c e i t
i n c r e a s e s t h e l i k e l i h o o d o f d i s p u t e s b ei n g s e t t l e d t h a t w o u l d n o t
b e o t h e r w i s e , b e c a u s e o f t h e c o m p l ex i t i e s , h i g h m o n e t a ry c o s t s
a n d r e q u i r e d t i m e as s o c i a t e d wi t h t h e l e g a l p r o c e s s . A l t e rn a t i v e
a w a y t o r e s o l v e d i s p u t es o u t s i d e t h e c o u r t s a n d r e d u c e t h e
judicial caseload.
t h e r e w a s a l w a ys a t e n d e n c y f o r l a w ye r s a n d a c a d e m i c s t o
c o n s i d e r t h e c o u r t s a s t h e n at u r a l a n d o b v i o u s d i s p u t e r e s o l v e r s
r e s o l u t i o n ” . 16 In t h e p a s t , c o u r t s w e r e c o n s i d e r e d t h e p r i n c i p al
m e a n s o f d i s p u t e re s o l u t i o n . F o r t u n a t e l y, f o r s o m e t i m e n o w i t
h a s b e c o m e m o r e an d m o r e c o m m o n t o d e l e g a t e c e r t a i n d i s p u t e s
t o s p e c i a l i z e d b o d i e s f o r i n i t i a l r e s o l u t i o n . 17 T h e p a s t ye a r s ,
a l t e r n a t i v e w a ys a r e u s e d m o r e a n d m o r e t o r e s o l v e c o m m e r c i a l
r e s o l u t i o n h a s g r o w n r a p i d l y, f u e l e d b y a d e s i r e t o c r e a t e a m o r e
s ys t e m h a s b e e n c r e a t e d b y a g r o w i n g p o o l o f p r o f e s s i o n a l
16
SANDER E. A. Frank, Varieties of Dispute Processing in the Pound Conference: Perspectives
on Justice in the Future, 1979, p. 69.
17
Ibid., p. 82.
28
d i s p u t e r e s o l v e r s ; a s ys t e m t h a t e n a b l e s d i s p u t i n g p a r t i e s t o
r e s o l v e t h e i r d i s a g r e e m e n t s m u c h m o r e r a p i d l y a n d e f f e c t i v e l y. 18
T h e p a r t i e s a n d t h e i r l a w ye r s a r e i n c r e a s i n g l y s e a r c h i n g t o
f o r m a l a n d c o m p l ex p r o c e d u r e s , t h e d e f i c i e n c i e s a n d c o s t s o f t h e
d i s p u t e r e s o l u t i o n . A s a r e s u l t , a r b i t r a t i o n , m e d i at i o n , a n d o t h e r
c o m m e r c i a l l a w , e m p l o ym e n t l a w , d o m e s t i c r e l a t i o n s , l a b o r l a w ,
m e d i c a l m al p r a c t i c e , c o n s t r u c t i o n l a w , i n t e r n a t i o n a l p ri v a t e l a w ,
a n d m a n y o t h e r a r e a s . 19
r e s o l v e d i s p u t e s i n a w a y d i f f e r e n t t h a n l i t i g a t i o n . 20 It i n c l u d es
18
RULE Colin, op. cit., pp. 2, 3.
19
STONE V. W. Katherine, Alternative Dispute Resolution, University of California, Los Angeles
School of Law Public Law & Legal Theory Research Paper Series, Vol. 04, No. 30, 2004, p. 1.
20
“Strictly speaking the term ‘alternative’ may be something of a misnomer. Most forms of ADR
are used hand in hand with either litigation or arbitration”. See CLIFT Rhys, Introduction to
Alternative Dispute Resolution: A Comparison between Arbitration and Mediation, pp. 4, 5
available at
http://www.hilldickinson.com/pdf/A%20Comparison%20between%20Mediation%20and%20Arbit
ration.pdf
29
w i t h o u t r e s o r t i n g t o l i t i g a t i o n ” . 21 It c o v e r s a b r o a d r a n g e o f
t r i a l s , w h i c h a r e m u c h c l o s e r t o l i t i g a t i o n , d u e t o t h e d ec i s i o n -
c o n c i l i a t i o n a s w e l l a s s o m e h yb r i d p r o c e s s e s l i k e M e d - A r b a n d
t h e O m b u d s m a n a re i n c l u d e d i n t h e A D R p r o c e d u r e s . 23 T h e
p a r t i e s t o a d i s p u t e a r e f r e e t o u t i l i z e a n y o f t h o s e m et h o d s ,
d e p e n d i n g o n t h ei r n e e d s a n d t h e n a t u re o f t h e d i s p u t e . H o w e v e r ,
A D R s ys t e m s u s u a l l y f a l l u n d e r o n e o f t h r e e c a t e g o r i e s a n d t h e
a s t h e m o s t s u c c e s s f u l . 24
21
HEUVEL V. D. Esther, Online Dispute Resolution as a Solution to Cross-border E-disputes: An
Introduction to ODR, 1997, p. 5 available at http://www.oecd.org/internet/consumer/1878940.pdf
22
SHAMIR Yona, op. cit., p. 4.
23
BROWN J. Henry and MARRIOTT L. Arthur, ADR Principles and Practice, (London: Sweet
& Maxwell), 1993, p. 19.
24
See infra at chapter 2.
30
S e c t i o n 2 : T h e b i r th o f A D R
O n e m u s t k e e p i n m i n d t h at a l t h o u g h a g r a n d h i s t o r i c a l
l a c k a n a l yt i c a l f o c u s ; h o w e v e r , n o m a t t e r h o w c o n f i n e d i t
d i s p u t e r e s o l u t i o n . A s s t a t e d , “ t h e b a s i c p r e m i s e o f c o n fl i c t w a s
a l w a ys t h e s a m e : a n e x p r e s s e d s t r u g g l e b e t w e e n a t l e a s t t wo
a c h i e v i n g t h e i r g o a l s . ” 25 T h e r e f o r e , d i s p u t e s h a v e e x i s t e d s i n ce
t h e e a r l y d a ys o f c i v i l i z a t i o n a n d s o h a s t h e n e e d f o r t h e i r
resolution.
could very easily come under the impression that ADR was
i n i t i a l l y c r e a t e d i n t h e U n i t e d S t at e s o f A m e r i c a d u r i n g t h e p a s t
c e n t u r y. H o w e v e r , A D R i s n o t a m o d er n p h e n o m e n o n ; i t e x i s t e d
25
KATSH Ethan, op. cit., p. 953.
31
l i t i g a t i o n . 26 W h a t i s m i s t a k e n l y c o n s i d e r e d a s t h e r e c e n t b i r t h o f
a n d t h e f o r m a t i o n o f a s t r o n g m o v e m e n t ; i t s m o d e r n r e b i r t h . In
r e a l i t y, “ a l t e r n a t i v e d i s p u t e r e s o l u t i o n m e t h o d s h a v e b e e n i n u s e
s i n c e t h e e a r l y d a ys o f c i v i l i z at i o n ”. 27 A D R o r i g i n a t e s f r o m
d i s p u t es o n m e a n s o f c o e r c i o n b u t o n t h e c o n t r a r y o n u n a n i m i t y.
S o c i e t i e s i n Eu r o p e , A s i a a n d A f r i c a r e s o r t e d t o ex t r a j u d i c i a l
m e a n s t o r e s o l v e d i s p u t e s l o n g b e f o r e t h e y e v o l v e d i n t o s t a t es
w i t h h o m o g e n o u s p o p u l a t i o n . It s r o o t s d a t e b a c k t o a n t i q u i t y,
r e s o r t i n g t o ex t r a j u d i c i a l f o r m s o f d i s p u t e r e s o l u t i o n .
t h e M a r i k i n g d o m ( i n c o n t e m p o r a r y S yr i a ) u s e d m e d i a t i o n a n d
a r b i t r a t i o n i n d i s p u t e s w i t h o t h e r k i n g d o m s ” . 28 A f i r s t c l e a r
m e n t i o n o f a r b i t r at i o n c a n b e f o u n d i n P l a t o ’ s “ La w s ” ( 3 5 0
26
FIADJOE Albert, Alternative Dispute Resolution: A Developing World Perspective (London,
Sydney, Portland, Oregon: Cavendish Publishing Limited), 2004, pp. 2-6.
27
SEVERSON M. Margaret and BANKSTON V. Tara, Social Work and the Pursuit of Justice
Through Mediation, Social Work, vol. 40, no. 5, 2005, pp. 683-689.
28
BOULLE Laurence, "A History of Alternative Dispute Resolution”, ADR Bulletin: Vol. 7, No.
7, Art. 3, 2005, pp. 1, 2.
32
l e a d i n g t h e m t o a re m o t e t e m p l e a n d co n v i n c i n g t h e m t o t a k e a n
oath that they will obey to his arbitral award which was: “Stay
h e r e u n t i l yo u c o n c i l i a t e ” . In a n c i e n t A t h e n s , t h e a r b i t r a t o r s i n
p r i v a t e l a w s u i t s t r i e d t o m a k e s u r e t h a t e v e r yt h i n g w a s s e t t l e d
t h e y a l w a ys d e c i d e d m o r e i n a s p i ri t o f f a i r n e s s a n d n o t s t r i c t
o b s e r v a n c e o f t h e l a w , a s A r i s t o t l e s ays i n h i s b o o k ” A t h e n i a n
C o n s t i t u t i o n ” . 29 A r a r e a n d w o n d r o u s m o n u m e n t o f A D R i s a n
i l l u s t r a t i o n o f a n a rb i t r a t i o n p r o c e d u r e o n t h e s h i e l d o f A ch i l l e s ,
o n w h i c h H e p h a e s t u s f o r g e d a d i s p u t e r e s o l u t i o n b e t w ee n t w o
m e n , w h o f o r a j u s t s o l u t i o n a d d r es s e d a t h i rd p e r s o n , t h e
‘ Is t o r a ’ , i . e . t h e a r b i t r a t o r , a s g r a p h i c a l l y d e s c r i b e d b y H o m e r i n
t h e Il i a d a t t h e 1 8 t h R h a p s o d y. 30 T h e p r a c t i c e o f s e t t l i n g d i s p u t e s
b y a r b i t r a t i o n o c cu r r e d v e r y f r e q u e n t l y i n a n c i e n t c l a s s i c a l
G r e e c e , w h e r e t h e i n s t i t u t i o n o f Am p h i c t yo n i c w a s d e v e l o p e d ,
29
ARISTOTLE, Athenian Constitution, 53 1-4.
30
HOMER, Iliad ΙΗ’ 478-608 : “[Λαοί δ’ ειν αγορή εθρόοι ένθα δε νείκος … ωρώρει, δύο δ’
άνδρες ενείκεον είνεκα ποινής…. ανδρός αποφθιµνέου ο µεν εύχετο παντ’ αποδούναι …]”
33
p h i l o s o p h y o f C o n fu c i u s , h a d f o s t e r e d i n t e n s e a n d a d m i r ab l y i n
o b e d i e n c e t o c e r e m o n i a l r u l e s , t h e re w a s a n o b l i g a t i o n t o
a t t e m p t r e s o l v i n g d i s p u t e s a m i c a b l y. O t h e r A s i a n s o c i e t i e s , f o r
o f d i s p u t e s . A D R a l s o ex i s t s i n l e s s d e v e l o p e d s o c i et i e s t h a t
t h e K a l a h a r i D e s e r t . 32
In In d i a a l r e a d y s i n c e 5 0 0 B . C . a r b i t r a t i o n w a s a f e a t u r e o f
In d i a n l i f e . P e o p l e s u b m i t t e d t h e i r d i f fe r e n c e s v o l u n t a r i l y t o t h e
“ P a n c h a ya t s ” w h o r e s o l v e d t h e d i s p u t es a n d t h e i r d e c i s i o n s w e r e
“srenis” (unions of men with the same job) and the “parishads”
w e r e b r o u g h t t o t h e k i n g f o r a r u l i n g . M u c h l at e r , i n 1 8 8 9 t h e
f i r s t In d i a n A r b i t r a t i o n A c t w a s p a s s ed , w h i c h m a d e A D R m o r e
31
WATSON Adam, The Evolution of International Society: A Comparative Historical Analysis,
(Taylor & Francis Book L.t.d.), 2006, p. 163.
32
“The lack of technological refinement belies sophistication in dispute resolution practices which
have evolved without courts and a formal state system and are suited to the needs of a collective
hunter-gatherer society. The Bushmen’s is not an idyllic existence and disputes occur over food,
land and mates. Those in conflict bring other members of the tribe together to hear out both sides.
Where passions rise, senior tribal members hide the disputants’ poisoned hunting arrows to
prevent resort to violence. If resolution is not reached in the small group the larger community is
brought together where everyone is able to talk through methods that have obvious analogies with
mediation, conciliation and peace-making practices in non-traditional societies similar among
Hawaiian islanders, the Yoruba of Nigeria and the Abkhazian of the Caucuses.” See BOULLE
Laurence, op. cit., pp. 1, 2.
34
s ys t e m a t i c a n d o r g a n i z e d , a n d w i d e l y u s e d t o r e s o l v e d i s p u t e s i n
r e c e n t ye a r s .
R e l i g i o n a l w a ys a c c e p t e d A D R a s a w a y t o r e s o l v e a
d i s p u t e . T h e C h r i s t i a n r e l i g i o n a s we l l a s J u d a i s m l o n g a g o
e s t a b l i s h e d n e g o t i a t i o n , m e d i a t i o n a n d a r b i t r a t i o n a s m a i n w a ys
furthermore the Ten Commandments and the 613 laws that can be
found in the torah, which Moses brought from mount Sinai are
o n e o f t h e f i r s t ex am p l e s o f a f r a m e wo r k t h a t g u i d e d p e o p l e o f
t h a t t i m e o n h o w t o r e s o l v e d i s p u t e s . 33 A c c o r d i n g t o t h e B i b l e,
K i n g S o l o m o n i n 9 6 0 B . C . w a s t h e fi rs t a r b i t r a t o r , w h e n h e w a s
h e r e f e r e e d w i t h w i s d o m a n d c o m p a s s i o n a n d r e s o l v ed t h e
d i s p u t e b y a w a r d i n g j u s t i c e . 34 F u r t h e r m o r e , A p o s t l e P a u l ar g u e d
i n f a v o u r o f t h e u s e o f A D R i n s t e a d o f l i t i g a t i o n a s a m ea n s o f
s h a m e yo u . Is i t p o s s i b l e t h at t h e r e i s n o b o d y a m o n g yo u t o b e
w i s e e n o u g h t o j u d g e a d i s p u t e b e t w ee n b e l i e v e r s ? B u t i n s t e a d ,
33
LODDER R. Arno and ZELEZNIKOW John, Enhanced Dispute Resolution through the use of
Information Technology, Cambridge University Press, 2010, p. 1.
34
The Bible, 1 Kings 3:16-28.
35
o n e b r o t h e r g o e s t o l a w a g a i n s t a n o t h er a n d t h i s i s i n f r o n t o f
u n b e l i e v e r s . T h e v e r y f a c t t h a t yo u h a v e l a w s u i t s a m o n g yo u
f r o m t h e e a r l y d a ys o f Is l a m a n d Is l a m i c l a w e a r l y o n r e c o g n i z e d
t h e l e g i t i m a c y o f a r b i t r a t i o n a s a p e ac e f u l m e a n s o f r e s o l v i n g
d i s p u t es b o t h i n c i v i l a n d p u b l i c l a w . 36 “ A m o n g t h e i n t r i g u i n g
h i s t o ri c a l i l l u s t r a t i o n s o f ‘ A D R ’ p h e n o m e n a i s t h e r o l e o f
M o h a m m e d i n a v e r t i n g w a r o v e r t h e r e c o n s t r u c t i o n o f K a a b a ” . 37
P e o p l e f r o m al l r e l i g i o n s , s u c h a s J e w s , C h r i s t i a n s , M u s l i m s a n d
B u d d h i s t s h a v e p r a c t i c e d A D R f o r t h o u s a n d s o f ye a r s . 38
B u t e v e n l a t e r o n t h r o u g h o u t h i s t o r y, a l t e r n a t i v e m e a n s o f
d i s p u t e r e s o l u t i o n a l w a ys h a d a s t r o n g p r e s e n c e . F o r i n s t a n c e ,
d u r i n g t h e m i d d l e ag e s , “ w h e n e v e r a n i n j u r y w a s c a u s e d b y o n e
p e r s o n a g a i n s t a n o t h e r , t h e p a r t i e s we r e e x p e c t e d t o r e a c h a n
example of ADR during the middle ages was in West Francia, the
u s e o f s ym b o l i c c o n t e s t s t o r e s o l v e l a n d d i s p u t e s . In t h e It a l i a n
p e n i n s u l a , s e v e r a l It a l i a n c i t i e s b e c a m e t r a d i n g c e n t e r s o f t h e
t h e n k n o w n ci v i l i z e d w o r l d a n d u t i l i z e d A D R t h r o u g h t h e
35
The Bible, 1 Corinthians 6:6.
36
WATSON Adam, op. cit., p. 57.
37
BOULLE Laurence, op. cit., pp. 1, 2.
38
MOORE W. Christopher, The Mediation Process: Practical Strategies for Resolving Conflict,
(John Wiley & Sons), 2003, p. 14.
39
SEVERSON M. Margaret and BANKSTON V. Tara, op. cit., pp. 683-689.
36
existence of the “fair courts” that were established by
d u r i n g t h e a n n u a l f ai r s .
In E n g l a n d d u r i n g t h e 1 0 t h c e n t u r y n e i g h b o u r s o v e r c a m e
m o r e l i k e m o d e r n ar b i t r a t i o n , i n a d d i t i o n t o t h e p r o p e r t y b a s e d
p o w e r o f t h e k i n g a n d t h e l o c a l l o r d ” . 40 B y 1 2 2 4 a r b i t r a t i o n w as
u s e d t o r e s o l v e c o m m e r c i a l d i s p u t e s . 41 D u r i n g t h e f o u r t e e n t h a n d
fifteenth centuries ADR was fairly common and the lobby of the
“Chartered In s t i t u t e o f A r b i t r a t o r s ” i n Lo n d o n h a s s e v e r a l
framed arbitration awards from that time, that are very similar to
t o d a y’ s a w a r d s a n d a c c o r d i n g t o w h i c h , a r b i t r a t o rs r e s o l v e d
d i s p u t es r e l a t i n g t o l a n d d i s p u t e s b e t we e n n e i g h b o r s , a s w e l l a s
f a r m i n g r i g h t s . 42
In F r a n c e , o n e o f t h e h o m e l a n d s o f m o d e r n p r e v e n t i v e
R e v o l u t i o n , a r b i t r at i o n w a s r e g a r d e d a s n a t u r a l l a w an d t h e
40
MANEVY Isabelle, Online Dispute Resolution: What Future? 2001, p. 4 available at
http://lthoumyre.chez.com/uni/mem/17/odr01.pdf
41
CARTER T. Albert, A History of the English Courts, 7th Ed., (London: Hambledon Press), 1994,
pp. 2, 3.
42
RULE Colin, op. cit., pp. 13, 14.
43
FERRAND Frederique, La mediation judiciaire, EXPERTS, No 41, 1998, p. 8.
37
C o n s t i t u t i o n o f 1 7 9 1 d e c l a r e d t h e c o n s t i t u t i o n al r i g h t o f ci t i z e n s
Holland.
E v e n i n t h e U n i t e d S t a t e s , wi t h t h ei r r e l a t i v e l y s h o r t e r
h i s t o r y, A D R h a s b e e n i n e f f e c t f o r c e n t u r i e s . F o r i n s t a n c e ,
“ s t a t u t e s l i k e t h o s e e n a c t e d i n P e n n s yl v a n i a i n 1 7 0 5 a n d 1 8 1 0 ,
t h r e e a r b i t r a t o r s . In 1 8 5 4 t h e U n i t ed S t at e s S u p r e m e C o u r t
t h e ‘ In t e r n a t i o n a l C o u r t o f A r b i t r a t i o n ’ a t t h e ‘ In t e r n a t i o n a l
A s s o c i a t i o n ’ ( 1 9 2 6 )” . 45
44
MANEVY Isabelle, op. cit., p. 4.
45
RULE Colin, op. cit., pp. 13, 14.
38
Section 3: The 20th Century Rebirth of ADR
c e n t u r i e s a n d c o n t i n u e d t o c h a n g e d u r i n g t h e t w e n t i e t h c e n t u r y.
In t h e U n i t e d S t a t e s , p a r t i c u l a r l y, d u r i n g t h e 1 9 6 0 s m ed i a t i o n
f a m i l y d i s p u t e s , a n d c o m m e r c i a l m a t t e r s . 46 “ In t h e 1 9 7 0 s , j u r i s t s
b e g a n t o v o i c e c o n c e r n s a b o u t t h e r i s i n g c o s t s a n d i n c r ea s i n g
d e l a ys a s s o c i a t e d w i t h l i t i g a t i o n a n d s o m e e n v i s i o n e d c h e a p e r ,
a l t e r n a t i v e s a s a rb i t r a t i o n a n d m e d i a t i o n ” . 47 In r e s p o n s e t o
c o n c e p t u a l i z e d A DR , f o r m i n g w h a t l a t e r b e c a m e k n o w n a s t h e
m o d e r n A D R m o v em e n t . 48 W h i l e t h e r e l o n g h a v e b e e n a l t e r n a t i v e
p e r h a p s o n e o f t h e m o s t i m p o rt a n t m i l e s t o n e s f o r A D R wa s t h e
c o u r t c a s e s l e d l a wye r s a n d a c a d e m i c s t o s p e a k o f t h e s o c a l l e d
movement.
46
Ibid., p. 15.
47
MANEVY Isabelle, op. cit., p. 4.
48
HÖRNLE Julia, op. cit., p. 48.
39
T h e A D R m o v e m en t w a s t h e c e n t r e o f a t t e n t i o n a t t h e
“ P o u n d C o n f e r e n c e o n T h e C a u s e s o f P o p u l a r D i s s a t i s fa c t i o n
M i n n e a p o l i s , M i n n es o t a , f r o m t h e s e v en t h t o t h e n i n t h o f A p r i l
1976 and where “US chief Justice Warren Burger encouraged the
e x p l o r a t i o n a n d u s e o f i n f o r m a l d i s p u t e r e s o l u t i o n p r o c e s s e s ” . 49
o r s e q u e n c e o f p r o c e s s e s ” . 50 La w s c h o o l s a n d a c a d e m i c s s t a r t e d
t o d e v e l o p t h e t h e o r e t i c a l b a c k g r o u n d b e h i n d A DR , b as e d o n
c o n c e p t s s u c h a s n e g o t i a t i o n t h e o r y, w h i c h t u r n e d t h e d i s p u t e
d e c a d e s . 51 N e w A D R p r o v i d e r s s t a r t e d t o i n c r e a s i n g l y a p p e a r a n d
c a s e l o a d . 52
49
LODDER R. Arno and ZELEZNIKOW John, op. cit., p. 1.
50
JACOBS L. Becky, Often Wrong, never in Doubt: How Anti-arbitration Expectancy Bias may
Limit Access to Justice, Maine Law Review, vol. 62, 2010, p. 532.
51
RULE Colin, op. cit., p. 16.
52
For instance, “the American Arbitration Association, the largest business-to-business dispute
resolution service provider in the United States, handled more than 150,000 cases in 1999, while
Judicial Arbitration and Mediation Services (JAMS) handled more than 60,000. The Better
Business Bureau (BBB) handled more than 450,000 cases in 2000”. Ibid., p. 17.
40
o r g a n i z a t i o n a l s t ru c t u r e o f t h e j u d i c i a l s ys t e m , t h e c o n t i n u o u s
m a n y c a s e s e x c e e d t h e v a l u e o f t h e s u b j e c t m a t t e r , an d t h e
o f a l t e r n a t i v e d i s p u t e r e s o l u t i o n . 53
w a ys t o r e s o l v e d i s p u t e s a n d a v o i d l i t i g a t i o n w a s i n t h e f i r s t
p l a c e a r e s u l t o f t h e p a r t i e s t h e m s el v es w h o w i s h e d t o a v o i d t h e
f o r m a l , c o m p l ex an d o f t e n l e n g t h y j u d i c i a l p r o c e d u r e s , t h e
d e f i c i e n c i e s , c o s t s a n d t h e i n c r e a s e d u n c e r t a i n t y, a n d s e c o n d l y, a
t h e c i v i l c o u rt s o f a l l d e v e l o p e d c o u n t r i e s . F o r i n s t a n c e , i n
F r a n c e t h e l a s t t h i r t y ye a r s h a v e s e e n a l a r g e i n c r e a s e i n c i v i l ,
p r o c e s s i n g c a s e s w i t h i n a r e a s o n a b l e p e r i o d o f 6 - 9 m o n t h s . In
41
It a l y i s f a c i n g a v e r y s e r i o u s p r o b l em i n t h e h a n d l i n g o f
p r i v a t e d i s p u t e s b ec a u s e o f t h e e v e r i n c r e a s i n g c a s e s . T h i s h a s
r e s u l t e d i n t h e a v e r a g e d u r a t i o n o f a t r i a l t o ex c e e d t h r e e ye a r s
i n t h e f i r s t i n s t a n ce a n d f o r a f i n a l d e c i s i o n o f t h e C o u r t o f
A p p e a l t h e p a r t i e s o f t e n w a i t m o r e t h a n 1 0 ye a r s . B e c a u s e o f
t h i s s i t u a t i o n m a n y It a l i a n l a w ye r s a p p e a l t o t h e E u r o p e a n C o u r t
s e e k i n g t h e c o n v i c t i o n o f t h e It a l i a n g o v e r n m e n t f o r b r e a c h o f
p r o v i d e s , t h e ri g h t o f e v e r y p e r s o n t o b e t r i e d i n t h e c a s e w i t h i n
a r e a s o n a b l e t i m e . In E n g l a n d , t h e t i m e r e q u i r e d t o p r o c e s s a
c a s e i n t h e f i r s t i n s t a n c e i s a r o u n d t h r e e ye a r s f o r t h e c o u r t o f
Lo n d o n a n d a r o u n d f o u r ye a r s f o r c a s e s i n c o u r t s o u t s i d e
Lo n d o n . T h e g r e a t e s t p r o b l em i s , t h e ex t r e m e l y h i g h c o s t s w h i c h
the poor because of the benefit of free legal aid, but for people
of the middle classes who do not have the financial ability nor
the trial is different in each state and often in the courts of the
s a m e s t a t e . 54 T h e i n e f f e c t i v e n e s s o f t r a d i t i o n al c o u r t s , d u e t o t h e
s h i n e d t h e s p o t l i g h t o n t h o s e m e t h o d s as a n e f f e c t i v e a l t e r n a t i v e .
54
GENN Hazel, 'Tribunals and. Informal Justice', Modern Law Review, vol. 56, 1993, p. 277.
42
A s s t a t e d , t h e m o d e r n A D R m o v e m en t f o u n d i t s r o o t s
t o A m e r i c a n i z e t h e l a w ” . 55 H o w e v e r , o v e r t h e ye a r s a l t e r n a t i v e
s i m i l a r t o t h o s e o f c o n t i n e n t a l E u r o p e . In a s u r v e y c o n d u c t e d b y
A D R , i f n e c e s s a r y. N o t o n l y t h a t , b u t f u r t h e r m o r e d u r i n g t h e
p a s t ye a r s i n t h e Eu r o p e a n U n i o n t h e re h a v e b e e n c o n s i d e r a b l e
c o n s u m e r s a n d s m a l l a n d m e d i u m - s i z e d b u s i n e s s e s p l ac e i n
e l e c t r o n i c c o m m e r ce ” . 56
M e m b e r S t at e s a n d i n s t i t u t i o n s h a v e s h o w n a s t r o n g a n d
55
MARRIOTT, Arthur, Tell it to the judge…but only if you feel you must, Arbitration
International, vol.12, 1995, p.13.
56
COM/2002/0196 final, Green paper on alternative dispute resolution in civil and commercial
law, 2002, p. 6.
43
E u r o p e a n S u m m i t i n Li s b o n i n 2 0 0 0 , 57 t h e C o u n c i l o f M i n i s t e rs
p r e s e n t a “ G r e e n P ap e r o n a l t e r n a t i v e d i s p u t e r e s o l u t i o n i n c i v i l
a n d c o m m e r c i a l l a w” , e x c l u d i n g A r b i t ra t i o n . 58 In 1 9 . 0 4 . 2 0 0 2 , t h e
r e s o l u t i o n i n c i v i l an d c o m m e r c i a l l a w ” , w h i c h r a i s e s a w a r e n e s s
o n A D R , d e t a i l s t h e d e v e l o p m e n t s i n t h e f i e l d o f ex t r a j u d i c i a l
f u n c t i o n i n g o f t h e c o u r t s , b u t a s an a l t e r n a t i v e m e a n s t o
E s p e c i a l l y f o r c o n s u m e r d i s p u t e s w h i ch a r e c o n s i d e r e d t h e
C o m m i s s i o n c o n s i d e r e d t h a t A D R t h ro u g h i m p a r t i a l m ed i a t o r s
57
DONEGAN L. Susan, Alternative dispute resolution for global consumers in E-commerce
transactions. E-commerce: law and jurisdiction (Kluwer Law International), 2003, p. 61.
58
COM/2002/0196 final, op. cit., p. 10.
59
JACOBS Wendela and JOUSTRA Caria, Consumer redress schemes from a comparative
perspective, Consumer Law Journal, vol. 11, 1995, p. 16.
44
procedures in which a third party helps the parties to reach an
i t a t t a c h e s t o a l t e r n a t i v e w a ys o f d i s p u t e r e s o l u t i o n i s s h o w n b y
t h e c r e a t i o n i n 2 0 0 0 o f t h e E u r o p e a n E x t r a j u d i ci a l - N e t b o o k
“ E E j - N e t ” t o c o o r d i n a t e d i s p u t e r e s o l u t i o n i n M e m b e r S t a t es
a n d p r o v i d e c o m m u n i c a t i o n a n d s u p p o r t t o t h e p a r t i es . T h e
a m i c a b l e s e t t l e m e n t o f d i s p u t e s a n d i s a p p l i c a b l e ( i n i t i al l y) i n
f o r a c t s o m i s s i o n s . 60 O n e c a n c l e a r l y s e e t h e E U e f f o r t s t o
t h e u s e o f m e d i a t i o n a n d b y b a l a n c i n g t h e r e l a t i o n s h i p b et w e e n
O v e r t h e l a s t ye a r s i t h a s b e c o m e s t a n d a r d i n s e v e r a l
i n s t a n c e , “ i n P o rt u g a l a n d s e v e r a l G e r m a n ‘ Lä n d e r ’ , c l a i m a n t s
60
2008/52/EC Directive of the European parliament and of the council of 21 May 2008 on certain
aspects of mediation in civil and commercial matters, Official Journal of the European Union L
136/3.
45
m u s t f i r s t r e s o r t t o A D R b e f o r e t h e a c t u a l j u d i c i a l p r o c ee d i n g s
m a y b e g i n , w h e r e a s i n Ir e l a n d a n d S w e d e n , t h e c o u r t w i l l
a t t e m p t t o a c h i e v e a s e t t l em e n t am o n g t h e p a r t i e s , e v e n i f s u c h
i s n o t l e g a l l y r e q u i r e d ” . 61
In F r a n c e t h e p r e v a i l i n g a l t e r n a t i v e w ays o f s e t t l i n g c i v i l
d i s p u t es i n c l u d e c o n c i l i a t i o n a n d m e d i a t i o n . B o t h a r e p r o p o s e d
b y t h e j u d g e a n d e x e r c i s e d b y a t h i r d p a rt y. T h e F r e n c h
p r o c e d u r a l l a w ex p r e s s l y p r o v i d e s t h a t s e t t l e m e n t i s a m o n g t h e
p o w e r s o f t h e c o u r t . M e d i a t i o n i s p r i m a r i l y e x e r c i s e d i n fa m i l y
m a t t e r s , i n h e r i t a n ce , l a b o r , j o i n t o wn e r s h i p a n d c o m m e r c i a l
m a t t e r s a s w e l l a s g e n e r a l m a t t e r s o f b u s i n e s s l a w . T h e co u r t , i f
o f t h e d i s p u t e m ay a p p o i n t a n e u t r al t h i r d p a r t y t o c o n d u c t
p e r s o n ( a n a g e n c y o r a m e d i a t i o n c o m p a n y) o r a n a t u r a l p e r s o n
m a y b e a p p o i n t e d a s a m e d i a t o r . Th e m e d i a t o r i s i n d e p e n d e n t
p r o c e d u r e , b u t u n d e r t h e s u p e r v i s i o n o f t h e j u d g e . In t h e e n d , i f
61
EU study on the Legal analysis of a Single Market for the Information Society. New rules for a
new age? Digital Agenda For Europe; A 2020 initiative, 2010, pp. 10, 11.
46
agreement for resolving the dispute, if it does not violate any
r u l e o f t h e l a w , i s n o t c o n t r a r y t o p u b l i c p o l i c y o r a b u s i v e . 62
In E n g l a n d , i n a d d i t i o n t o t h e o r d i n a r y c i v i l c o u r t s a n d t o
w i t h t h e p r o s p e c t o f a d v a n c e m e n t . In i t i a t e d b y f a m i l y l a w i n
1980 ADR has been extended to almost all areas of private law,
p r i m a r i l y i n c o m m e r c i a l l a w , w h i c h h a s s h o wn c o n s i d e r a b l e
g r o w t h . S e v e r a l A DR c e n t e r s o p e r a t e , s u c h a s t h e “ Lo n d o n C o u r t
( b o d i e s ) , s t a f f e d b y l a w ye r s a n d o t h e r t r a i n e d p r o f e s s i o n a l s ,
p r o c e d u r e i n E n g l a n d , a f t e r a r a d i c a l r e f o r m b y Lo r d W o o l f,
r e s o l v i n g d i s p u t e s a r e r e a c h i n g t h e 1 6 t h c e n t u r y. M e d i a t i o n i s
p r a i s e d b y a l l r e l e v a n t p l a ye r s , a s t h e w a y t o r e s o l v e d i s p u t e s ,
62
FERRAND Frederique, op. cit., p. 10.
47
s m a l l cl a i m s ( u n d e r 3 0 0 , 0 0 0 ye n ) t h e j u d g e r e f e r s t h e c a s e t o a
m e d i a t o r f o r a m i c a b l e s e t t l e m e n t a n d t h e l a w ye r s t h e m s e l v e s
s e e k a n a m i c a b l e s e t t l e m e n t o f c a s e s . In J a p a n , t h e c u r r e n t l e g a l
e n v i r o n m e n t al pollution, e m p l o ym e n t relationships,
m a t e r i a l s , d e f e c t i v e p r o d u c t s , i n t e l l e c t u a l p r o p e r t y, e t c . ) .
In 1 9 9 6 In d i a a d o p t e d t h e La w o n A r b i t r a t i o n a n d C o n c i l i a t i o n ,
In t e r n a t i o n a l Trade La w ( U N C IT R A L) Model La w on
f u r t h e r d e v e l o p e d a n d p r o m o t e d A DR , b y f a c i l i t a t i n g t h e u s e o f
c o n c i l i a t i o n , n e g o t i a t i o n , M i n i - T r i al s , c o n s u m e r s f o r u m s , Lo k
In d i a , t h a t n e e d s p e c i a l m e n t i o n , s u c h a s t h e “ In d i a n C o u n c i l o f
A r b i t r a t i o n ” ( IC A ) , t h e “ In t e r n a t i o n a l C e n t r e f o r Al t e rn a t i v e
D i s p u t e R e s o l u t i o n ” ( IC A D R ) t h e “ F e d e r a t i o n o f In d i a n C h a m b e r
48
o f C o m m e r c e a n d In d u s t r y” , t h e “ In d i a n C h a m b e r o f C o m m e r c e ”
a n d t h e “ C h a m b e r o f C o m m e r c e a n d In d u s t r y o f B e n g a l ” .
s u c c e s s f u l a n d h a s m e t t h e p o s i t i v e c o n t r i b u t i o n o f l a w ye r s . 63 In
t h e U . S . A DR i s i n t h e m i n d s o f t h e p a r t i e s t h e m o s t p o p u l a r
d i s p u t e . Th e “ U n i f o r m M e d i a t i o n A c t ” i s t h e s p e c i a l l e g a l
f r a m e w o r k t h a t r e g u l a t e s t h e i s s u e t h ro u g h o u t t h e c o u n t ry a n d
m e d i a t i o n i s a p p l i ed i n m a n y b r a n c h e s o f l a w ( f a m i l y, l a b o r ,
D i s p u t e R e s o l u t i o n i s a n a l yz e d a t a h i g h s c i e n t i fi c l e v e l i n m a n y
A m e r i c a n u n i v e r s i t i e s . T h e s c i e n t i f i c d e v e l o p m e n t o f a l t e rn a t i v e
a l t e r n a t i v e d i s p u t e r e s o l u t i o n a n d n o v el t e c h n i q u e s a n d m e t h o d s
a r e c r e a t e d , w h i c h o f t e n c o m b i n e el e m e n t s o f c o n c i l i a t i o n ,
etc.).
63
OTIS Louise, Pour une nouvelle justice civile, Magistrats Européens pour la Démocratie et les
Libertés, 2011, p. 27.
49
T o d a y A D R , a f t e r t h o u s a n d s o f ye a r s o f e v o l u t i o n a n d
a f t e r i t s m o d e r n re b i r t h d u e t o t h e A D R m o v e m e n t o f t h e
t w e n t i e t h c e n t u r y, h a s b u i l t a n i n d i s p u t a b l e f o u n d a t i o n a n d h o l d s
c o n s i d e r e d t h e u s u a l w a y t o r e s o l v e d i s p u t e s i n a wi d e v a r i e t y o f
c o n s t r u c t i o n d e f e c t s , i n t e l l e c t u a l p r o p e r t y, a n d p u b l i c p o l i c y
d i s p u t es .
50
Chapter 2
Forms of ADR
e x p e r t e v a l u at i o n an d m i n i - t r i a l s , t o h yb r i d f o r m s t h a t c o m b i n e
A D R c a n b e e n v i s i o n e d a l o n g a s p e c t r u m . A t o n e e n d t h er e a r e
A D R t e c h n i q u e s wi t h w h i c h t h e p a r t i es h a v e c o n t r o l o v e r b o t h
t h e p r o c e d u r e a n d t h e o u t c o m e . A t t h e o t h e r e n d a r e t e c h n i q u es
m e t h o d s a n d t e c h n i q u e s w i l l n o t b e ex a m i n e d i n d e t ai l h er e , a s
64
RULE Colin, op. cit., p. 37.
51
n e u t r a l t h i r d p a r t y w i t h d e c i s i o n au t h o r i t y. T h e d i s t i n c t i o n
between methods assisted by third neutrals and the ones that are
However, the last section presents not only arbitration but also
s o m e o f t h e h yb r i d f o r m s o f A D R , b e c a u s e a b r i e f p r e s e n t a t i o n i s
e s s e n t i a l i n b e t t e r u n d e r s t a n d i n g A D R a n d i t s w h o l e s p ec t r u m .
The other methods that are included in the brief presentation are
S e c t i o n 1 : N e g o ti a ti o n
N e g o t i a t i o n i s o n e o f t h e m o s t b a s i c fo r m s o f i n t e r a c t i o n 66
a n d p e o p l e a r e c o n s t a n t l y n e g o t i a t i n g i n e v e r yd a y l i f e a n d i n
b u s i n e s s e v e n i f t h e y d o n ’ t r e a l i z e i t . 67 N e g o t i a t i o n i s s o
65
KENNEDY F. John, President of the United States of America inaugural address, January 20,
1961.
66
MOFFITT Michael & BORDONE Robert, The handbook of Dispute Resolution, (San Francisco:
Jossey Bass), 2005, p. 279.
67
BETANCOURT C. Julia and ZLATANSKA Elina, Online Dispute Resolution (ODR): What Is
It, and Is It the Way Forward?, International Journal of Arbitration, vol. 79, Is. 3, 2013, p. 4
52
c o m m o n t h a t i t i s p r a c t i c a l l y i n v o l v e d i n a l l i n t e r p er s o n a l
c o m m u n i c a t i o n a n d c a n b e i d e n t i f i e d i n m o s t o f t h e e v er yd a y
i n t e r a c t i o n s . 68 A f t e r a l l , i t i s e s s e n t i a l t o u n d e r s t a n d t h a t i t i s a
s o m e t h i n g f r o m s o m e o n e o r s o m e o n e w an t s s o m e t h i n g f r o m u s . 69
r e s o l u t i o n p r o c e d u re s s u c h a s m e d i a t i o n . 70 N e g o t i a t i o n t h e o r y
t h e o r y. N e g o t i a t i o n i s t h e m e a n s b y w h i c h c o n f l i c t i n g p a r t i e s
p e r s u a s i o n a n d t h e c o n s o l i d at i o n o f c o n f i d e n c e . 71 C o m m u n i c a t i o n
t h e d i s p u t e c o n s t i t u t e t h e p r o c e s s o f n e g o t i a t i o n . “ In i t s s i m p l e s t
68
“You negotiate with your kids about their bedtime, you negotiate with your boss about your
raise, you negotiate with the car dealer about the purchase price for your new minivan [...] as the
saying goes, in work as in life, you don’t get what you deserve, you get what you negotiate”.
RULE Colin, op. cit., p. 38.
69
SHELL G. Richard, Bargaining for advantage: Negotiation Strategies for Reasonable People,
(Viking), 1996, p. 6.
70
MOEVES S. Amy and MOEVES C. Scott, Two Roads Diverged: A Tale of Technology and
Alternative Dispute Resolution, William & Mary Bill of Rights Journal, vol. 12, Is. 3, 2004, pp. 2-
5.
71
LUECKE Richard, Harvard business essentials: negotiation, Harvard Business School Press,
2003, p. 2.
53
f o r m , n e g o t i a t i o n i n v o l v e s a n ex c h a n g e o f v i e w s a n d p r o p o s a l s
b y p a r t i e s w h o w i s h t o s e t t l e o u t o f c o u r t ” . 72
n e g o t i a t i o n i s t h e n e g o t i a t i n g s t yl e .
In t h e f i e l d o f A D R , n e g o t i a t i o n i s c h ar a c t e r i z e d p r i m a r i l y
a p p r o a c h , t h e c o l l ab o r a t i v e o r o p e r a t i v e b a r g a i n i n g a p p r o a c h a n d
n e g o t i a t i o n o r w i n -l o s e n e g o t i a t i o n a t t a c h e s t o t h e n e g o t i a t i o n
t h e n a t u r e o f a c o n f r o n t a t i o n w i t h w i n n e r s a n d l o s e r s . It i s
e x p a n d t h e i r p o s i t i o n s ( p o s i t i o n al b a r g a i n i n g ) a n d i t i s u s e d
s t r a t e g y h a s l i t t l e c r e a t i v e a n d d i s t r i b u t i v e n at u r e . T h e s t r o n g
i . e . t o c l o s e t h e d ea l , t o w i n i n t h e n eg o t i a t i o n wi t h l i t t l e o r n o
72
BENYEKHLEF Karim and GELINAS Fabien, Online Dispute Resolution, Lex Electronica,
Vol. 10, No. 2, 2005, p. 44.
54
regard for the consequences to the subsequent relationship or
n e g o t i a t o r s i s v i ct o r y. T h e y u s u a l l y s t a r t wi t h a n ex t r e m e
They use lies, threats and often harm their relationship with the
o t h e r s i d e , b e c a u s e t h e h a r d b a r g a i n i n g t a c t i c s r a i s e eq u a l l y
harsh reactions.
C o l l a b o r at i v e n e g o t i a t i o n o r w i n - w i n n e g o t i a t i o n i s
c h a r a c t e r i z e d b y m i l d n e g o t i a t o r s a n d w i n / w i n o u t c o m e s . It
a i m s t o s o l v e t h e p r o b l e m , t o c o v e r t h e i n t e r e s t s a n d m e et t h e
p o s i t i o n s . It i s u s e d w h e n t h e g o a l s a n d o b j e c t i v e s o f b o t h
r e d i r e c t i n g t h e c o n f l i c t . In t h i s s t r a t eg y i t i s a l s o i m p o rt a n t t o
achieve the substantive goals and at the same time keep the
r e l a t i o n s h i p i n t a c t . T h e p a r t i e s a r e t yp i c a l l y e x p e c t e d t o h a v e a
i d e a b e h i n d t h e n e g o t i a t i o n i s t h at t h e o b j e c t i v e s o f t h e t w o
achieve their goals, this does not prevent the other to achieve its
o w n . T h e g a i n o f o n e s i d e i s n o t a c h i e v e d a t t h e ex p e n s e o f t h e
55
personal conflicts; they tend to make many concessions to reach
c o n v e r t t h e i n i t i a l d i l e m m a o f o n e p ar t y v e r s u s t h e o t h e r , t o a
b o t h p a r t y c o l l a b o r a t i o n w i t h a w i n - w i n r e s u l t . In t h e e n d b o t h
p a r t i e s f e e l v i n d i ca t e d , b e c a u s e e v e n i f t h e s o l u t i o n i s n o t
o p t i m al , i t i s t h e i r co m m o n e f f o r t . 73
F i n a l l y, p r i n c i p l e d n e g o t i a t i o n o r i e n t s t h e p a r t i e s i n t o t w o
m a i n d i r e c t i o n s ; t o a l w a ys s e e k m u t u a l b e n e f i t s a n d w h en t h e i r
protecting them from the other side when they try to exploit this
It s h o u l d b e e f f i c i e n t i . e . s a v e t i m e a n d c o s t a s w e l l a s m e e t t h e
o f i n f o r m a t i o n b e t w e e n t h e p a r t i e s . A n d f i n a l l y, i t s h o u l d
i m p r o v e t h e r e l a t i o n s h i p b e t w e e n t h e p a r t i e s . In p r i n c i p l e d
and needs of both parties. The negotiators take into account the
73
DONALDSON C. Michael, Negotiating for dummies, (Wiley Publishing Inc.: Indiana) 2nd
Ed., 2007, p. 317.
56
existing conditions and look for a way to resolve the dispute
o b j e c t i v e l y a n d i m p a r t i a l l y. 74
In n e g o t i a t i o n t h e r e i s n o i n t e r v e n t i o n b y a t h i r d p a r t y. 75 B e c a u s e
o f r e s o l v i n g d i s p u t e s b e t w e e n p a r t i es . 76 “ F i n d i n g a m u t u a l l y
a c c e p t a b l e s o l u t i o n t o t h e d i s p u t e d e p en d s o n t h e p a r t i e s a n d t h e
n e g o t i a t i o n p r o c e s s i s c o n f i d e n t i a l a n d c o m p l e t e l y v o l u n t a r y;
g e n e r a l l y, t h e p a r t i e s c a n w i t h d r a w a t a n y p o i n t ” . 77 .
a u t o n o m o u s p r o c e s s t h a t u s u a l l y d i s p l a ys c e r t a i n s p e c i f i c t o e a c h
c o m m o n t o a l l n e g o t i a t i o n s . T h e f i rs t s t a g e i n c l u d e s t h e “ d e s i g n
a n d a n a l ys i s ” . T h i s s t e p i s e s s e n t i al l y t h e b e g i n n i n g o f t h e
p r e p a r a t i o n i s t h e k e y p a r t o f a n y n e g o t i a t i o n . G o o d p r e p ar a t i o n
74
FISHER Roger, URY L. William and PATTON Bruce, Getting to Yes: Negotiating Agreement
Without Giving In, (Penguin), 2011, pp. 13- 49.
75
MENKEL-MEADOW J. Carrie, Lawyer Negotiations: Theories and Realities- what we learn
from Mediation, Modern Law Review, vol. 56, 1993, p. 361.
76
LODDER R. Arno and ZELEZNIKOW John, op. cit., pp. 2, 3.
77
BENYEKHLEF Karim and GELINAS Fabien, op. cit., p. 44.
57
creates a solid foundation for the negotiation and gives the
t h i s s t a g e t h e n e g o t i a t o r s c o l l e c t a l l t h e r e l e v a n t i n f o rm a t i o n
n e g o t i a t o r a n a l yz e s t h e n e e d s , i d e n t i f i es t h e i n t e r e s t s , s e l ec t s t h e
s t r a t e g y, t h e t e c h n i q u e a n d g e t s f a m i l i a r w i t h h i s o p p o n e n t . T h e
p r o c e s s , w h i c h d ep e n d i n g o n t h e ci r c u m s t a n c e s , s h o u l d b e
n e i t h e r t o o l o n g n o r t o o s h o r t . 78
n e g o t i a t i o n s b e g i n . B y s h a r i n g i n f o r m a t i o n t h e p a r t i e s a t t em p t t o
d i s c o v e r w h a t e l em e n t s e a c h s i d e p r e f e r s t o a c q u i r e. E a c h
c o m p l e t e d h i s r e s e a r c h , k n o w s w h a t h e w a n t s a n d i s r ea d y t o
78
DONALDSON C. Michael, op. cit., p. 317.
58
t h e w a y a n d t h e o r d e r i n w h i c h t h e y a n a l yz e t h e i n i t i a l p o s i t i o n s .
t o f i r s t s t at e t h e i r v i e w s a n d i d e a s . T h i s s t a g e i n c l u d e s t h e
s h a r i n g o f e a c h n e g o t i a t o r ’ s v i e w s a n d t h e i r c a r e f u l ex a m i n a t i o n ,
s o m e t h i n g a b s o l u t e l y e s s e n t i a l i n a l l n eg o t i a t i n g r e l a t i o n s h i p s .
i n c l u d e s t h e c o m p ro m i s e s . At t h i s s t a g e a l l t h e d e t a i l s t h at e a c h
n e g o t i a t o r m i g h t r ev e a l t o t h e o t h e r ar e a l r e a d y p r e s e n t e d , a n d
t h e p a r t i e s c l a r i f y t h e i r d i s p u t e t h r o u gh t h e f i n a l p r e s e n t at i o n o f
t h e i r c l a i m s . Th e p a r t i e s i m p l e m e n t t ac t i c s t h at w i l l r e s u l t i n a
b e t t e r a p p r o x i m a t i o n o f t h e a n t i c i p at e d r e s u l t , t h e s at i s f a c t i o n o f
are drawn defining the end of the negotiation. At this point the
a g r e e m e n t b e t w e e n t h e c o n f l i c t i n g p a rt i e s o c c u r s a s a r e s u l t o f
the previous stages. The agreement can occur either because the
t h e d i s c o v e r y o f m i d d l e g r o u n d , i . e. a m u t u a l l y a c c e p t a b l e
s o l u t i o n . 79
79
FISHER Roger, URY L. William and PATTON Bruce, op. cit., pp. 41, 42.
59
T h e n e g o t i a t i o n i s c o n s i d e r e d s u c c e s s fu l i f t h e b e n e f i t s t o
one side have been achieved while the other side feels the same
w a y. 80 If n o p o i n t o f a g r e e m e n t i s f o u n d a n d t h e p r o c e s s d o e s n o t
t h e b e g i n n i n g o r t h e p r o c e s s m u s t e n d . If t h e p a r t i e s s t i l l c a n n o t
r e a c h a n a g r e e m e n t , o t h e r f o r m s o f a l t er n a t i v e d i s p u t e r e s o l u t i o n
w h i c h i s ex a m i n e d n e x t , a s w e l l a s s e v e r a l o f t h e h yb r i d f o r m s .
80
EL-HAKIM Jacques, Les modes alternatifs de règlement des conflits dans le droit de contrats,
Revue Internationale de Droit Compare, vol. 2, 1997, p. 349.
81
LODDER R. Arno and ZELEZNIKOW John, op. cit., pp. 2, 3
60
Section 2: Mediation
A . Wh a t i s m e d i a t i o n ?
m e d i a t i o n a l l o ws t h e p a r t i e s t o r e t a i n t h e i r c o n t r o l a n d t h e i r
d e c i s i o n m a k i n g a u t h o r i t y, b u t a l s o i n v o l v e s a t h i r d n e u t r al p a r t y
r e p r e s e n t a t i v e t yp e s o f a l t e r n a t i v e d i s p u t e r e s o l u t i o n a s w e l l a s
o n e o f t h e m o s t wi d e l y u s e d A D R m e t h o d s . 83 M e d i a t i o n i s a
r e s o l v e t h e d i s p u t e w i t h t h e a s s i s t a n ce o f a n e u t r a l t h i r d p a r t y,
t h e m e d i a t o r , w h o e m p l o ys v a r i o u s t e c h n i q u e s i n o r d e r t o h e l p
t h e p a r t i e s fi n d a co m m o n g r o u n d a n d s e t t l e t h e d i s p u t e . It i s t h e
p a r t y, s ys t e m a t i c a l l y i s o l a t e t h e p o i n t s o f t h e d i s a g r e e m e n t , w i t h
82
RULE Colin, op. cit., p. 39.
83
BOULLE Laurence and NESIC Miryana, Mediation: Principles, Process, and Practice,
(Butterworths), 2001, p. 4.
61
serves both their interests. Mediation is essentially a dialogue or
a n e g o t i a t i o n wi t h t h e i n v o l v e m e n t o f a t h i r d p a r t y. 84 T h e
mediator does not decide on the dispute, but helps the disputing
b e c o l l e g i a l , i n o t h e r w o r d s , p e r f o r m e d b y m o r e t h an o n e
i n d i v i d u a l ” . 85 T h e n e e d f o r i n v o l v e m e n t o f a t h i r d p e r s o n i s
j u s t i f i e d i n t h e o r y b a s e d o n t h e p r em i s e t h a t m a n y t i m e s t h e
p a r t i e s a r e s i m p l y n o t a b l e t o i d e n t i f y t h e m s e l v e s , i n a c l ea r a n d
m e a n i n g f u l w a y, t h e c o n f l i c t i n g e l e m e n t s o f t h e i r d i s p u t e a n d
p o t e n t i al m u t u a l h o s t i l i t y.
T h e i m p o rt a n c e o f m e d i a t i o n i s e v i d e n c e d b y i t s m u l t i p l e
s c o p e o f t h e d i s p u t e . M e d i a t i o n r e s o l v e s d i s p u t e s b et w e e n r i v a l
d o e s n o t p ro d u c e t h e d e s i r e d e f f e c t i t p r o m o t e s t h e u s e o f
62
management of lengthy conflicts that are expected to continue.
c o m m u n i c a t i o n . T h i s a l l o ws f o r f u t u r e i n v o l v e m e n t i n s e t t l e m e n t
c o n f l i c t i n g p a r t i e s , w i t h t h e a s s i s t an c e o f a m e d i a t o r , c a n
i m p r o v e c o m m u n i c a t i o n , t o a c h i e v e h an d l i n g n e g a t i v e e m o t i o n s ,
c r e a t e s a n e n v i r o n m e n t t h a t al l o w s fo r l a t e r a l t h i n k i n g w h i c h
i n v o l v e s r e s t r u c t u ri n g , e s c a p e , a n d t h e p r o v o c a t i o n o f n e w
p a t t e r n s a n d l e a d s t o b r a i n s t o rm i n g a n d s u b s e q u e n t l y t o t h e r i s e
o f m a n y d i f f e r e n t i d e a s i n o r d e r t o r e s o l v e t h e d i s p u t e . 86
M e d i a t i o n h a s i t s ro o t s i n a n c i e n t p r ac t i c e s a n d i s o n e o f
m e d i a t o r i n c o m m er c i a l r e l a t i o n s o f t h e A r a b s , t h e el d e r s a s
exemplify the need for a third party as a neutral who will reduce
i m p o r t a n t d e v e l o p m e n t i n r e c e n t d e c a d e s h a s b e e n t h e n e ce s s i t y
86
DE BONO Edward, Lateral Thinking: A Textbook for Creativity, (Australia: Penguin Books
Ltd), 2009, p. 11.
63
o f p a r t i c u l a r A n g l o - S ax o n j u r i s d i c t i o n s t o a v o i d t h e c o s t a n d
d e l a y o f l i t i g a t i o n s ys t e m , d e v e l o p i n g m e d i a t i o n i n c i v i l a n d
i n s t i t u t i o n o f A m e ri c a n i n s p i r a t i o n . E v e n t h o u g h m e d i a t i o n w a s
s u b j e c t t o t h e o r e t i ca l a n d p r a c t i c a l p r o c e s s i n g s i n c e t h e 7 0 ' s a n d
8 0 ' s , e s p e c i a l l y i n r e c e n t ye a r s i t h a s s p r e a d r a p i d l y i n m a n y
s t a t e s . F o r i n s t a n ce , In G r e a t B r i t a i n , w h e r e m e d i a t i o n e x i s t s
m e d i a t i o n d e v e l o p ed t o s u c h a n ex t en t i n t h e l e g a l w o r l d i n
England that since 1999 has been part of the English civil
o f t h e A n g l o -S a x o n c o u n t ri e s . At t h e e n d o f t h e 2 0 t h ce n t u r y
s u c h d yn a m i c t r e n d s d i d e m e r g e i n F r a n c e , C a n a d a , H o n g K o n g
a n d s e v e r a l E u r o p e a n c o u n t r i e s . F o r e x a m p l e , i n G e r m an y, i n
2 0 0 2 s p e c i a l r u l e s fo r m e d i a t i o n w e r e e s t a b l i s h e d a n d m o r e s o i n
two levels because of the federal form of the state, i.e. both in
s p e c i f i c l e g i s l a t i o n o f t h e Lä n d e r o f t h e F e d e r a l R e p u b l i c o f
G e r m a n y.
i d e n t i f y i s s u e s , ex p l o r e t h e i r i n t e r e s t s a n d p o s s i b l e s o l u t i o n s ,
64
whereas in litigation the judge is not affiliated with the parties,
i n s t e a d s i m p l y a s s e s s e s t h e e v i d e n c e a n d d e c i d e s . In m e d i a t i o n
p o t e n t i al c o m p r o m i s e w h i l e i n l i t i g a t i o n t h e p a r t i e s s h i f t c o n t r o l
to the judge and there are few prospects for compromise because
i s c h a r a c t e r i z e d f o r f a c i l i t at i n g n e g o t i at i o n s , s o m e t h i n g w h i c h i s
t h e d i s p u t e . In s t e a d c o u r t p r o c e e d i n g s a r e p u b l i c a n d a t t r i b u t e
e r r o r t o o n e o f t h e p a r t i e s h u rt i n g i n t h i s w a y i t s r e p u t a t i o n . In
s o m e c u l t u r e s , s u ch a s A s i a n o r M i d d l e E a s t c u l t u r e s , i t i s
because the mediator does not impose liability to any party but
f a c i l i t a t e s a g r e e m e n t s t h a t d o n o t o f f en d a n y o f t h e p a r t i e s . T h e
s u b s t a n t i v e a n d p r o c e d u r a l l a w s , a s w e l l a s t o r i g h t s i n s t ea d o f
interests.
65
communication of the parties, by focusing on the defence of
t h e i r a r g u m e n t s , e s s e n t i a l l y l i m i t i n g t h e c o m m u n i c a t i o n b et w e e n
l a w ye r s a n d c o u r t s , a n d r e p l a c i n g i n f o r m a l m e e t i n g s w i t h fo r m a l
c o u r t s e s s i o n s i n a c e r t a i n p l a c e a n d t i m e . 87 M o r e o v e r , t h e
the parties, offering the opportunity for both parties to come out
b e t w e e n t h e m . In s t e a d i n l i t i g a t i o n d ec i s i o n s a r e m a d e b a s e d o n
the evidence and the law and record one of the parties as the
f l e x i b l e t e r m s b e t we e n t h e p a r t i e s , a c c e l e r a t e d p r o c e s s a n d l o w
c o s t . O n t h e c o n t r a r y i n l i t i g a t i o n t h e r e i s l a c k o f f l ex i b i l i t y, t h e
d i f f e r e n c e s b e t w e e n m e d i a t i o n a n d l i t i g a t i o n i t i s u n d er s t o o d
t h a t m e d i at i o n i s f ra m e d w i t h s e v e r a l ad v a n t a g e s t h a t m a k e i t a n
a t t r a c t i v e a n d p r e f er r e d o p t i o n .
p a r t i e s i n d i s p u t e c o m m u n i c a t e wi t h t h e a s s i s t a n c e o f a t h i r d
n e u t r a l p a r t y w i t h n o d e c i s i o n p o w e r ( c a l l e d m e d i a t o r ), w h o
87
BREIDENBACH Stephan, Mediation: Struktur, Chancen und Risiken von Vermittlung im
Konflikt, (Schmidt Dr. Otto KG), 1995, p. 69.
66
a m i c a b l e a g r e e m e n t . 88 T h e r e a r e s e v e r a l k i n d s o f m e d i a t i o n . T h e
t h e d i s p u t e i n t e r m s o f t h e u n d e r l yi n g n e e d s a n d i n t e r e s t s o f t h e
p a r t i e s r a t h e r t h a n s t r i c t l e g a l r e q u i r e m e n t s . It c o n t r i b u t e s
p o w e r s , g o v e r n s t h e d i s p u t e , t h e e x t en t a n d l i m i t s o f l i a b i l i t y
a n d t h e s o l u t i o n ) an d f a c i l i t a t e s t h e n e g o t i a t i o n , e n s u r i n g a s a f e
r e c o g n i z i n g t h e i n f l u e n c e o f e a c h p a r t y . In f a c i l i t a t i v e m e d i a t i o n
s e t t l e m e n t . Th e t h i rd k i n d i s t h e r a p e u t i c m e d i a t i o n , wh i c h d e a l s
88
“Mediation shall mean any process, however named or referred to, where two or more parties to
a dispute are assisted by a third party to reach an agreement on the settlement of the dispute,
regardless of whether the process is initiated by the parties, suggested or ordered by a court, or
prescribed by the national law of a Member State”. See Report on the proposal for a directive of
the European Parliament and of the Council on certain aspects of mediation in civil and
commercial matters, 2007, Article 2 (a).
67
with the causes of the conflict in the relations between the rival
p a r t i e s . T h e m e d i a t o r i s r e q u i r e d t o h av e e x p e r t i s e i n c o u n s e l i n g ,
p s yc h o t h e r a p y a n d g e n e r a l u n d e r s t a n d i n g o f t h e p s yc h o l o g i c a l
f a c t o r s . T h e m e d i at o r f o l l o w s t h e p at h o f e m p o w e r m e n t a n d
F i n a l l y, t h e f o u r t h k i n d o f m e d i a t i o n i s k n o w n a s e v a l u a t i v e
t h e c a s e , w h i c h i n v o l v e s a n a l ys i s o f t h e d i s p u t e i n a c c o r d a n c e
with the legal rights of the parties. The parties are encouraged to
this approach; the parties do not acquire skills for the future
c l o s e . In e v a l u a t i v e m e d i a t i o n t h e t h i r d p a r t y e v a l u a t e s t h e
s e t t l e m e n t b a s e d o n i t s v i e w . 89
89
HÖRNLE Julia, op. cit., p. 51.
68
B. Choosing Mediation
p r o c e d u r e a n d m a y a l s o a b a n d o n t h e m e d i a t i o n at a n y s t a g e p r i o r
t o t h e s i g n i n g o f a s e t t l e m e n t a g r e e m e n t ” . 90 H o w e v e r , m e d i a t i o n
c a n a l s o b e d i s c r e t i o n a r y, i n t h e s e n s e t h a t i t m a y b e u n d e r t a k e n
U n i t e d S t at e s , a n d m a n y A u s t r a l i a n j u r i s d i c t i o n s . 91 M e d i a t i o n
p a r t i c i p a n t s a r e w i l l i n g t o t r y. S u b m i t t i n g a d i s p u t e t o m ed i a t i o n
o b l i g a t i o n s a r e s u ff i c i e n t l y c l e a r , a s i l l u s t r a t e d b y C a b l e &
Wi r e l e s s P l c v . I B M. 92
often the question arises how to make the choice of whether the
d i s p u t e s h o u l d b e r e s o l v e d t h r o u g h m ed i a t i o n . In t h i s c a s e t h e
90
HEUVEL V. D. Esther, op. cit., p. 7.
91
LODDER R. Arno and ZELEZNIKOW John, op. cit., pp. 3, 4.
92
“In Cable & Wireless Plc v. IBM, a mediation clause was held to be enforceable since it referred
to an institution and specified procedure, and the court held that the parties’ obligation was to
participate in the process of initiating the mediation, selecting a mediator and presenting the
mediator with the case and relevant documents”. See HÖRNLE Julia, op. cit., p. 51
69
d i s p u t e c o u l d t h e o re t i c a l l y b e r e s o l v e d t h r o u g h n e g o t i a t i o n s a n d
w h e t h e r t h e r e i s p r o g r e s s i n t h e o n - g o i n g n e g o t i a t i o n s b et w e e n
t h e p a r t i e s . 93 M e d i a t i o n i s i n f o r m al a n d h a s a m o r e f l ex i b l e f o r m ,
c a n b e i n v o k e d a t a n y s t a g e , b e f o r e o r d u r i n g t h e t r i a l . 94
b y a r b i t r a t i o n . It m u s t b e n o t e d t h a t t h e a p p l i c a t i o n o f m e d i a t i o n
b e c o m e s d i f f i c u l t i n c a s e s o f f o r g e r y, p l a g i a r i s m o r a n y o t h e r
case where the bad faith of at least one party can infringe the
t r u s t a n d c o m m u n i ca t i o n b e t w e e n t h e p a r t i e s . 95
p a r t i e s c a n g o t o c o u r t o r u s e a r b i t r a t i o n t o r e s o l v e t h ei r d i s p u t e ,
and they usually require for a certain amount to pass, time that
93
BEVAN H. Alexander, Alternative dispute resolution: a lawyer's guide to mediation and other
forms of dispute resolution, (Thomson, Sweet & Maxwell Editions), 1992, pp. 39- 44.
94
FIADJOE Albert, op. cit., pp. 22-23.
95
VARADY Tibor, BARCELLO J. John and VON MEHREN T. Arthur, International
Commercial Arbitration, A Transnational Perspective, (Thomson West), 2003, p. 10.
70
S e t t l em e n t o f In v e s t m e n t D i s p u t e s ( IC S ID ) , i n l e g a l i n s t r u m e n t s
c o m m e r c i a l c o n t r a c t s ” . 96 F u r t h e r m o r e , t h i s w a y m e d i a t i o n c an b e
s u g g e s t e d b y o n e o f t h e p a r t i e s wi t h o u t h i n t s o f i n c r i m i n a t i o n
and without giving the impression to the other party that the
p o t e n t i al u n f a v o r a b l e o u t c o m e t h r o u g h t h e j u d i c i a l r o u t e . In
i n t e r e s t s . 97
d i s p u t es , s u c h a s c i v i l , c o m m e r c i a l , fa m i l y, l e a s i n g , t r a d e , r e a l
e s t a t e , c o n s t r u c t i o n , p r o p e r t y, a n d b a n k i n g d i s p u t e s , r e g a r d l e s s
o f t yp e , w h i c h c a n b e r e s o l v e d b y a g r e e m e n t a n d a r e w i t h i n t h e
l a t t e r c a t e g o r y o n e m a y s o l v e i s s u e s o f m a i n t e n a n c e o r p ro p e r t y
96
BENYEKHLEF Karim and GELINAS Fabien, op. cit., pp. 45, 46.
97
LODDER R. Arno and ZELEZNIKOW John, op. cit., pp. 3, 4.
71
but not the divorce, which by order of the law is the
a p p l i c a t i o n i n c a s es o f f a m i l y a n d c o m m e r c i a l l a w , m e d i a t i o n
g e n e r a l l y a p p l i e s i n c a s e s w h e r e t h e em o t i o n i s d o m i n a n t a t t h e
M e d i a t i o n i s s u i t ed f o r s i t u at i o n s wh e r e t h e p a r t i e s a r e m o r e
i n t e r e s t e d i n a c o m p r o m i s e , r a t h e r t h an p a r t i c i p a t i n g i n a f o r m a l
juridical process.
T h e r e a s o n s f o r c h o o s i n g m e d i at i o n c a n b e i l l u s t r a t e d b y
C o n t i n u i t y, C o n t r o l a n d C o n fi d e n t i al i t y, o f t e n r e f e r r e d a s t h e “ 4
t h e C o n t i n u i t y, a l l o w s f o r t h e d e v e l o p m e n t o f a p r o f e s s i o n a l a n d
F i n a l l y, t h e p r i n c i p l e o f C o n f i d e n t i al i t y a p p l i e s t o a l l
d i s c u s s i o n s a n d a ct i o n s o f s t a k e h o l d e r s a n d p a r t i e s i n v o l v e d .
C o r n e r s t o n e f o r t h e r e c o g n i t i o n a n d a cc e p t a n c e o f m e d i a t i o n a s
c o n f i d e n t i a l i t y, s i n c e t h e m u t u a l t r u s t o f t h e p a r t i e s i s a
72
p r e r e q u i s i t e o f a s u c c e s s f u l m e d i at i o n . 98 T h e c o n f i d e n t i a l i t y
e n h a n c e s t h e s i n ce r i t y a n d h o n e s t y a n d c o n f i r m s t h a t a n y
s u g g e s t i o n s , i d e a s a n d s t a t e m e n t s ex p re s s e d b y a p a r t y i n o r d e r
to resolve the dispute are not going to affect the outcome of the
result and will not be used later against that party during
t h a t t h ei r d i s c u s s i o n s m i g h t b e r e v e a l ed i n c o u r t .
C o n f i d e n t i a l i t y, d e s p i t e t h e p a r t i ci p a t i o n o f t h e t h i r d p a r t y
i s n o t e n d a n g e r e d i n a n y w a y, c e r t a i n l y n o t t o t h e ex t e n t t h at
a p p l i e s , o r i n a r b i t ra t i o n w h e r e t h e s e cr e t p r o c e s s o f t e n i n v o l v e s
m a n y t h i r d p e r s o n s ( r e f e r e e s , a r b i t r a t o r s , l a w ye r s , p a r t i e s e t c . )
a n d i n c r e a s e s t h e r i s k o f i n f o rm a t i o n l e a k i n g . 99 T h e m e d i at i o n
i n f o r m a t i o n i n c o u r t o r i n a r b i t r a t i o n . In f o r m a t i o n d i s c l o s e d
m u s t b e r e t u r n e d o r o t h e r w i s e d e s t r o ye d , i f t h e p a r t y c h o o s e s s o .
In c o n c l u s i o n , t h e i n f o r m a t i o n o b t a i n e d d u r i n g t h e m e d i a t i o n
s h a l l b e c o n f i d e n t i al a n d t h e r e s p o n s i b i l i t y f a l l s b o t h t h e o n t h e
m e d i a t o r a n d t h e p ar t i e s . 100
98
BREIDENBACH Stephan, op. cit., pp. 288-289.
99
FOLBERG Jay and TAYLOR Alison, Mediation; A Comprehensive Guide to Resolving
Conflicts without Litigation, (San Francisco: Jossey Bass Publishers), 1984, pp. 8-9.
100
VARADY Tibor, BARCELLO J. John and VON MEHREN T. Arthur, op. cit., p. 9.
73
As already mentioned, one of the strongest selling points
w i n - s o l u t i o n ) . T h e r e s o l u t i o n i s f o r m ed t o t h e m e a s u r e s o f t h e
l e g a l a r g u m e n t s . In p a r t i c u l a r , t h e n o m i n a t i o n a n d c o n s i d er a t i o n
a n d n o t t h e r i g h t s o f t h e p a r t i e s . 101
e f f i c i e n t . T h e p r o ce s s i s q u i c k , w i t h o u t d e l a ys , b u r e a u c r a c y, o r
t h e p e r p e t u a t i n g t h e d i s p u t e . Th e e c o n o m i c b e n e f i t i s m o s t
s t a g e o f t h e d i s p u t e , w h e n t h e c o s t o f t h e w h o l e p r o c e s s ca n b e
c a l c u l a t e d i n a d v a n c e . It o f f e r s e a s y a c c e s s t o p e o p l e a n d
t h e i r c o m m o n p ro b l e m i n v e r y s h o r t t i m e , wh i c h i s e s p e c i a l l y
u s e f u l i n c o m m e r c i al m a t t e r s , w h e r e t i m e c o u n t s s i g n i f i c a n t l y.
101
DUVE Christian, EIDENMULLER Horst and HACKE Andreas, Mediation in der Wirtschaft:
Wege zum professionellen Konfliktmanagement, (Schmidt), 2011, p. 162.
74
m e d i a t o r i n c o o p e r at i o n wi t h t h e p a r t i es . T h e p a r t i e s , r a t h er t h a n
benefit from procedures that are tailor made to their own needs.
d i f f e r e n c e s t h r o u g h t h e m e d i a t i o n p ro c e s s , t h e y s h a l l n o t b e
r e q u i r e d t o c o n t i n u e t h a t p r o c e s s a f t e r t h e f i r s t s e s s i o n , an d c a n
c o n t r o l o f t h e r e s o l u t i o n o f t h ei r d i s p u t e . M o r e o v e r , t h e n o n -
i m p o s e d o n t h e p ar t i e s , u n l e s s t h e p a r t i e s t h e m s e l v e s w i s h t o
m e d i a t i o n a r e m o re l i k e l y t o f o l l o w a n d c o m p l y w i t h t h e
d i s t u r b e d r e l at i o n s b e t w e e n t h e p a r t i e s a n d c o n t r i b u t e t o a m o r e
s u s t a i n a b l e e c o n o m i c a n d s o c i a l c l i m a t e.
f u n d a m e n t a l r i g h t s o f t h e p a r t i e s , b ec a u s e o f t h e e q u a l i t y a n d
p a r t i e s r e t a i n t h e i r r i g h t t o r e c o u r s e t o l i t i g a t i o n . F i n a l l y,
75
m e d i a t i o n i s a p p r o p r i a t e f o r m u l t i l a t er a l d i s p u t e s b e c a u s e m o r e
c h o o s e m e d i a t i o n . M e d i a t i o n i s a u s e fu l t o o l t o r e s o l v e ex i s t i n g
c o n f l i c t s a n d p r e v e n t f u t u r e o n e s , c o n t r i b u t i n g t h e p r e s e rv a t i o n
of social peace.
C . T h e M e d i a t i o n p r o ce s s
T h e m e d i a t i o n p r o c e s s c o n s i s t s o f s ev e r a l s t a g e s ; i n t h e
p a r t n e r s h i p . D u ri n g t h i s s t a g e t h e p a r t i e s a n n o u n c e t h e i s s u e s o f
t h e d i s p u t e a s w e l l a s t h e i r i n i t i a l p o s i t i o n t o t h e m e d i a t o r, w h o
d r a w s u p a s u m m a ry. T h e n e x t p h a s e u s u a l l y i n c l u d e s d o cu m e n t
a n d i n f o r m a t i o n e x ch a n g e w i t h t h e p r e s e n c e o f r e p r e s e n t a t i v e s o f
t h e p a r t i e s a n d o f co u r s e t h e m e d i a t o r . It i s t h e fi r s t s u b s t a n t i v e
m e e t i n g b e t w e e n t h e p a r t i e s , w h e r e e v er yo n e h a s t h e o p p o rt u n i t y
t o s t at e t h e i r v i ew s o n t h e l e g a l , f i n a n c i a l a n d e m o t i o n a l
76
implications of the dispute and to propose preferable solutions.
T h e m a i n p r o c e d u r e s t a r t s wi t h t h e ac c e p t a n c e o f t h e ru l e s o f
c o n d u c t i n v o l v i n g m a i n l y t h e t i m e t a b l e a n d w i t h t h e i n au g u r a l
c o m m e r c i a l d i s p u t es , t h e m e d i a t o r a f t e r a s e r i e s o f m e e t i n g s ,
s i d e , e n c o u r a g e s b o t h p a r t i es t o c o n s i d e r t h e p o s i t i o n s o f t h e
o t h e r s i d e a n d p ro p o s e s o p t i o n s t h at w i l l h e l p t h e m i n t h e
“ a s s i s t e d s t o r yt e l l i n g ” t o h e l p t h e p a r t i e s r e f r a m e t h e i r p o s i t i o n s
a n d a r g u m e n t s w i t h m o r e c l a r i t y, r e v e a l t h e u n d e r l yi n g i s s u e s
s e t t l e m e n t . 102 F o r t h e e f f e c t i v e n e s s o f t h i s p h a s e , t h e m e d i a t o r
s h o u l d wo r k w i t h a s m a l l g r o u p f r o m e a c h s i d e a n d m a i n l y w i t h
c o m m e r c i a l m e d i a t i o n s , p e o p l e i n v o l v ed i n t h e s e c o n d p h a s e a r e
u p t o s i x t o t e n , wh i l e i n t h e t h i r d p h a s e t h e r e a r e u p t o t w o o r
t h r e e p a r t i c i p a n t s f r o m e a c h s i d e . 104 F i n a l l y, u s u a l l y n e a r t h e e n d
102
RULE Colin, op. cit., p. 41.
103
FISHER Roger, URY L. William and PATTON Bruce, op. cit., p. 14.
104
CARROLL Eileen and MACKIE Karl, International Mediation - The Art of Business
Diplomacy, (Kluwer Law International), 2000, pp. 101-102.
77
to further assist the parties to reach a resolution, but in no way
D. The Mediator
a c c e p t a b l e w a y t o r e s o l v e t h e d i s p u t e . In s h o r t , “ t h e m ed i a t o r
does not make a decision, but helps the disputing parties to find
t h e s o l u t i o n t h a t i s a c c e p t a b l e t o a l l p ar t i e s i n v o l v e d ” . 105 M o d e rn
b y w h i c h t h e g o a l i s t o h e l p t h e p ar t i e s f i n d t h e m s e l v e s a n
a p p r o p r i a t e s o l u t i o n b a s e d o n t h e i r n e e d s a n d i n t e r e s t s . 106 T h e
o w n w i t h o u t a d v o ca t i n g i n f a v o r o f o n e o r t h e o t h e r p a r t y;
toward one side or the other, because it’s not the opinion of the
105
HEUVEL V. D. Esther, op. cit., p. 7.
106
BÜHRING-UHLE Christian, op. cit., pp. 274, 280, 282.
78
mediator but the opinion of the parties that will lead to the
s e t t l e m e n t . 107
T h e m e d i a t o r w i t h a b s o l u t e i m p a r t i a l i t y a n d c r e d i b i l i t y,
h a v i n g e x p e r i e n c e i n t h e p r o c e s s a n d n e g o t i a t i n g s k i l l s , wi t h o u t
h a v i n g d e c i s i v e a u t h o r i t y, i s l i m i t e d t o b r i n g i n g t h e p a r t i e s
a n d e n c o u r a g e s t h e m t o u n d e r s t a n d t h ei r n e e d s a n d i n t e r e s t s a n d
i n r e g a r d t o t h e co n t e n t o f t h e d i s p u t e o r t h e o u t c o m e o f i t s
r e s o l u t i o n ” , 108 t h e m e d i a t o r m a y a d v i s e o n o r d e t e r m i n e t h e
dispute.
U s u a l l y, t h e m e d i a t o r i s a l l o w e d t o h e a r t h e p a r t i es
t o g e t h e r a n d s e p a r a t e l y. O n e o f t h e m o s t i m p o r t a n t f e a t u r e s o f
t h e i n i t i a t i v e f o r a b r e a k , t h e “ c a u c u s ” i n o r d e r t o m ee t t h e
p r o p o s a l s f o r r e s o l v i n g t h e d i s p u t e . Th e “ A m e r i c a n A r b i t r a t i o n
107
RULE Colin, op. cit., p. 41.
108
LODDER R. Arno and ZELEZNIKOW John, op. cit., pp. 3, 4.
79
mediator the selective use of information obtained by each party
t o r e d u c e h o s t i l i t y b e t w e e n t h e p a r t i e s a n d h e l p t h e m t o en g a g e
t o r e s o l v e c u r r e n t p r o b l e m s a n d f u t u re n e e d s o f t h e p a r t i e s . 109
A l s o i t m a k e s t h e re a c h i n g o f a s e t t l e m e n t m o r e l i k e l y b e c a u s e
o f t e n t h e p a r t i e s a re m o r e w i l l i n g t o s h a r e s e n s i t i v e i n f o rm a t i o n
t h a t t h e y w o u l d n o t r e v e a l t o t h e o t h e r p a r t y, i n f o r m a t i o n w h i c h
could lead to possible middle ground that the parties might not
h a v e s u s p e c t e d w a s t h e r e w i t h o u t t h e h el p o f t h e m e d i a t o r . 110
T h e m e d i a t o r m u s t b e a b l e t o l i s t e n c a r e f u l l y, t o a p p r e c i a t e
m o d i f yi n g v i e w s , r e l a t i o n s h i p s a n d p ri n c i p l e s a n d u l t i m a t e l y t o
i n t e r p r e t i n a p r o p e r w a y t h e p o s i t i o n o f t h e p a r t i e s . 111 T h e
m e d i a t o r m u s t b e s k i l f u l i n p u b l i c r e l at i o n s , t o c o n d u c t wh a t w e
c a l l d i p l o m a c y m e d i a t i o n ( a l s o k n o w n a s s h u t t l e d i p l o m ac y) i n
109
CONNERTY Anthony, A Manual of International Dispute Resolution, (Commonwealth
Secretariat Library), 2006, p. 269. For more information see American Arbitration Association
available at www.adr.org
110
“However, caucus meetings are very sensitive undertakings and require some reserve on the
part of the mediator because the basis for agreement has to be woven out of confidential
information. In cases where the dispute resolution system allows the mediator to become an
arbitrator if mediation fails, it is very inadvisable for the mediator to meet with the parties
separately. Under the law of many countries, such a process would contravene the principles of
fair hearing, and could nullify any arbitration award on the grounds that it violates public order.
The principle of fair hearing is entrenched worldwide, and prevents an individual invested with
judicial functions from hearing one party without allowing the other party to respond to the
representations”. See BENYEKHLEF Karim and GELINAS Fabien, op. cit., p. 47.
111
MACKIE J. Karl, A Handbook of Dispute Resolution; ADR in Action, (London and New York:
Routledge and Sweet & Maxwell), 1991, pp. 89-90.
80
discussions with the parties and able to transfer critical
m e s s a g e s a b o u t t h e o u t c o m e o f t h e r e s u l t . 112 T h e m e d i a t o r s w o rk
is often hard and described as equal parts art and science since it
e n v i r o n m e n t o f c o n fl i c t a n d d i s t r u s t . 113
p r e v e n t t h e e s c a l a t i o n o f t e n s i o n a n d co m p e t i t i o n b et w e e n t h e m .
T h e m e d i a t o r h e l p s t h e p a r t i e s t o w o rk t o g e t h e r t o u n d e r s t a n d
is to find a solution and not the victory of one part y over the
112
HIBBERD Peter and NEWMAN Paul, ADR and Adjudication in Construction Disputes,
(Blackwell Science), 1999, pp. 63-64.
113
“Some mediators have an innate ability to help people understand each other, and their
involvement can be the catalyst that enables resolutions to emerge when there seems no possibility
an agreement could ever be achieved. There is no ideal mediation style. Some mediators are very
aggressive and challenging, like trial lawyers, focusing on the details in the dispute and pushing
disputants on inconsistencies. Other mediators are much more reflective, like therapists or
counselors, letting the parties go through their own exploration of the issues, and focusing on the
relationship between the parties. Different styles fit different types of disputes and different types
of disputants”. See RULE Colin, op. cit., p. 41
81
q u e s t t o f i n d t h e m s e l v e s a l t e r n a t i v e wa ys t o r e s o l v e t h e d i s p u t e
n e g o t i a t i o n s a n d en c o u r a g e t h e p a r t i e s t o c o n t i n u e e v e n u n d e r
e x t r e m e c o n d i t i o n s o f i n t e n s e p e r s o n a l r i v a l r y, m a i n t a i n i n g o p e n
c o m m u n i c a t i o n wi t h e a c h o f t h e m a n d c o o p e r a t i n g e q u a l l y w i t h
c r e a t i n g a n e n v i r o n m e n t t h at e n s u r e s c o n f i d e n t i a l i t y, f o r h i m ,
f o r t h e p r o c e d u r e i t s e l f , b u t al s o b e t w ee n t h e r i v a l p a r t i e s . W h e n
there is trust, the parties are less defensive and appear more
w i l l i n g t o s h a r e i n f o r m a t i o n a m o n g t h e m s e l v e s a n d wi t h t h e
c o n f i d e n t i a l i n f o rm a t i o n s h a l l n o t b e co m m u n i c a t e d t o t h e o t h e r
p a r t y. T h e m e d i a t i o n m u s t b e c o n d u c t e d i n a m a n n e r t h a t d o e s
n o t v i o l at e p r i v a c y, u n l e s s t h e p a r t i e s a g r e e o t h e r w i s e . F i n a l l y,
82
problem in question and promote a plan of settlement which
w o u l d a c t u a l l y c o n t a i n t h e a g r e e d p o s i t i o n o f t h e p a r t i e s . 114
It i s i m p o r t a n t t h a t t h e e f f e c t i v e m e d i a t o r m u s t h a v e s o m e
such as being able to carefully listen to the parties but also pick
u p o n a n y s i l e n t cu e s o f c o m m u n i c a t i o n a n d a s s i s t p a r t i e s t o
d e v e l o p a n d p r o m o t e a d d i t i o n a l p e r s p ec t i v e s , i d e a s a n d o p t i o n s ,
s e n s i t i v i t y, w h i c h i s a n a b i l i t y t h a t a l l o w s t h e m e d i a t o r t o
r e s p o n d t o t h e ex p r e s s i o n o f e m o t i o n s o f t h e p a r t i e s a n d t o
a p p r o a c h s e n s i t i v el y a n y m a n i f e s t a t i o n s o f c o n f r o n t a t i o n o r
114
MACKIE J. Karl, op. cit. pp. 89, 90.
83
emotions is a necessary element of mediation and there are
e m o t i o n s , t h e m a n ag e m e n t o f t h e r e s p o n s e o f e a c h p a r t y t o t h e
e m o t i o n al ex t r e m i t i e s o f t h e o t h e r s i d e a n d t h e r e c o g n i t i o n o f
t h e r i g h t a s w e l l a s t h e t i m e n e e d e d f o r e a c h s i d e t o ex t e r n a l i z e
t h e a c c u m u l a t e d p r es s u r e . 115
Im p o r t a n t a r e t h e s k i l l s o f g o o d j u d g m e n t , t h e a b i l i t y t o
r e l i a b i l i t y a n d t h e c o m p e t e n c e t o e x e rc i s e t h e r e l e v a n t d u t i e s i n
a n e f f e c t i v e , c o n s t ru c t i v e a n d s e l f - r e l i a n t m a n n e r . F u r t h e rm o r e ,
t h e m e d i a t o r m u s t h a v e t h e n e c e s s a r y c o m m u n i c a t i o n s k i l l s t h at
a r e r e q u i r e d i n t h e p r o c e s s o f c o n f l i c t r e s o l u t i o n , t h e a b s en c e o f
e t c . In o r d e r t o i m p r o v e t h e m e d i a t o r’ s c o m m u n i c a t i o n s k i l l s ,
115
HIBBERD Peter and NEWMAN Paul, op. cit., pp. 63, 64
84
productive and adjusting to personality and cultural differences.
F i n a l l y, t h e m e d i a t o r m u s t b e a b l e t o s c h e d u l e m e e t i n g s .
In c o n c l u s i o n , t h e ca t a l yt i c a s s i s t a n c e a n d g u i d a n c e o f t h e
p a r t i e s t o f i n d a t ai l o r m a d e s o l u t i o n b a s e d o n t h e i r n e ed s a n d
l i t i g a t i o n . T h e s e a r c h f o r t h e c a u s e s o f t h e c o n f l i c t , t h e a n a l ys i s
s p e c i f i c p a t t e r n s fo r b e h a v i o r a n a l ys i s i s t h e t h e o r e t i c a l b a s i s
the above it is clear that the skills of a mediator vary and extend
b e yo n d l e g a l s c i e n c e , p s yc h o l o g y a n d n e g o t i a t i o n s . It c o m e s
d o w n t o t h e a b i l i t y o f " e m p a t h y" , i . e . t h e a b i l i t y t o u n d e r s t a n d
s i l e n c e , s u b m i t t h e a p p r o p r i a t e q u e s t i o n s , a b s o r b t h e n eg a t i v e
e m o t i o n s o f t h e p a rt i e s t o u n b l o c k t h e p r o c e s s , a n a l yz e i n t e r e s t s
process.
85
E. The settlement
O n e o f t h e m a i n f ea t u r e s o f m e d i a t i o n i s i t s n o n - b i n d i n g
c h a r a c t e r a s o p p o s e d t o o t h e r f o r m s o f A D R l i k e a r b i t r a t i o n . 116
In i t i a l l y, t h e p a r t i e s c a n l e a v e t h e m e d i a t i o n a t a n y p o i n t a n d a r e
b i n d i n g m e d i a t i o n ag r e e m e n t a s C a b l e & Wi r e l e s s P l c v . IB M i s
v o l u n t a r y, s i n c e t h e p a r t i e s a r e o n l y o b l i g a t e d t o i n i t i a t e a n d
a t t e m p t t h e p r o c e s s . 117 T h e m e d i a t i o n p ro c e s s c a n b e a f a i l u re
a n d l e a v e t h e p a r t i es b a s i c a l l y w h e r e t h e y s t a r t e d , t h o u g h b e t t e r
i n f o r m e d . B u t , i t ca n b e a s u c c e s s , i n w h i c h c a s e a s e t t l e m e n t
c o u n t r i e s , f o r i n s t a n c e i n t h e U n i t ed S t at e s , “ p a r t i e s d e c i d e
a c c e p t a b l e s o l u t i o n t h a t w i l l b e h o n o r ed b y b o t h o f t h e m w i t h o u t
h a v i n g t o r e s o r t t o l e g a l l y b i n d i n g w r i t t e n a g r e e m e n t s ” . 118
b i n d i n g c o n t r a c t , wh i c h i n c a s e o f n o n -p e r f o r m a n c e , w h e n o n e o f
116
See infra at section 3.
117
HÖRNLE Julia, op. cit., p. 51.
118
HEUVEL V. D. Esther, op. cit., p. 7.
86
t h e p a r t i e s d o e s n o t h o n o r t h e a g r e e m e n t , a l l o ws f o r a l e g a l
U n f o r t u n a t e l y t h i s p r o b l e m w a s n o t o v e r c o m e b y U N C IT R A L’ s
M o d e l La w ; a l t h o u g h s e v e r a l s o l u t i o n s w e r e s u g g e s t e d t o m a k e
m e d i a t i o n a g r e e m e n t s b i n d i n g a n d e n f o r c e a b l e i n t e r n a t i o n a l l y,
a r b i t r a t i o n a w a r d t h a t w a s d e s c r i b e d as c o n t a i n i n g a g r e e d t e r m s
p u r p o s e o f r e c o g n i z i n g i t s e n f o r c e a b i l i t y” , 119 t h e M o d e l La w
c o u l d n o t p r o v i d e t h e n e c e s s a r y i n t e r n a t i o n a l r e m e d i es t h a t
international disputes.
t h e r e f o r e t h e p r e f e r r e d A D R m e t h o d a t l e a s t f o r i n t e r n at i o n a l
d i s p u t es . T h e f a c t t h a t t h e m e d i at i o n p r o c e d u r e i s v o l u n t a r y a n d
the fact that mediation is not suitable for all disputes, make
119
BENYEKHLEF Karim and GELINAS Fabien, op. cit., p. 48.
87
accessible for disputes and especially those not lending
t h e m s e l v e s t o c o m p r o m i s e . A ft e r a l l , a l t h o u g h m e d i a t i o n a i m s t o
find out the parties’ respective interests and align the resulting
p r e f e r e n c e s i n s u ch a w a y, t h a t t h e s o l u t i o n s a t i s f i e s e a c h
p a r t y’ s i n t e r e s t s ; h o w e v e r , o n e m u s t n o t f o r g e t t h at n o t a l l
d i s p u t es c a n b e s o l v e d i n t h i s w a y. In s o m e c a s e s , t h e u n d e r l yi n g
t h e r e f o r e n e c e s s a r y t o r e s o r t t o a d j u d i ca t i o n . 120
S e c t i o n 3 : A rb i t r a ti o n a n d t h e h y b r i d f o r ms
“ h yb r i d ” f o r m s . T h e e x a m i n a t i o n o f t h e s e m e t h o d s i s i n cl u d e d i n
t h e s e c t i o n a b o u t a rb i t r a t i o n b e c a u s e i t w a s d e e m e d t h a t i t w o u l d
s e c t i o n a b o u t t h e s e h yb r i d f o r m s , b u t i n s t e a d t h a t i t w o u l d b e
A D R a n d c o n s e q u e n t l y p r o v i d e a b e t t e r u n d e r s t a n d i n g o f AD R .
120
HÖRNLE Julia, op. cit., pp. 55- 58.
88
A . Wh a t i s A r b i t r a t i o n
c o n f r o n t a t i o n al f o rm o f a l t e r n a t i v e d i s p u t e r e s o l u t i o n ; i t i s a
s ys t e m o f j u s t i c e , c r e a t e d b y m e r c h a n t s t h o u s a n d s o f ye a r s
a g o . 121 T h e v a s t g r o w t h o f a r b i t r at i o n i n re c e n t d e c a d e s i s d u e t o
t r a d e . 122 T h e b i g i n c r e a s e i n i n t e r n a t i o n al t r a d e t h a t o c c u r r e d i n
m o d e r n t i m e s c a u s e d m a j o r p r o b l e m s a l w a ys a s s o c i a t e d w i t h
c o n d u c t , w i t h e m p h a s i s o n t h e ex c h a n g e o f b e n e f i t s . O n e t h e
a r b i t r a t i o n . Th e m a i n r e a s o n s f o r l e a d i n g t h e p a r t i e s t o a
121
ROEBUCK Derek, Cleopatra Compromised: Arbitration in Egypt in the First Century BC,
Journal of the Chartered Institute of Arbitrators, 2008, p. 263.
122
CARABIBER Charles, L’evolution de l’arbitrage commercial international, Recueil des Cours
de l'Académie de Droit international, vol. 99, 1960, pp. 125- 130.
89
p a s t . 123 H o w e v e r , i n m o d e r n t i m e s , a r b i t r a t i o n i s p r e f e r r e d f o r
a d d i t i o n a l r e a s o n s , s u c h a s t h e p r o t e c t i o n o f p ri v a c y, t h e c o n t r o l
o f t h e p a r t i e s a n d t h e e a s e i n t h e i n t er n a t i o n a l r e c o g n i t i o n a n d
F r o m v e r y e a r l y, h u m a n s o c i e t i e s h a d m a n i f e s t e d a s p i r i t
o f r e s o l u t i o n o f d i s p u t e s a n d e s s e n t i al a t t e m p t s h a d b e e n m a d e
f o r t h e p e a c e f u l a n d a m i c a b l e s e t t l e m en t o f d i s p u t e s t h r o u g h t h e
back to ancient Greek law, the “heroic” period and the epics of
H o m e r , w h e r e a s c e n e o f t h e q u a r r e l b et w e e n O d ys s e u s a n d A i a s
T e l a m o n i o s i s d e s c ri b e d , t h e r e s o l u t i o n o f w h i c h w a s p e r f o r m e d
p r i v a t e a n d p u b l i c a n d i n c l u d e d a s a f i r s t s t a g e t h e a t t em p t t o
r e c o n c i l e t h e t w o d e f e n d a n t s . T o c o n d u c t t h e a r b i t r at i o n a
c o n t r a c t u a l a g r e e m e n t w a s r e q u i r e d , w h i c h h a d t o b e i n w ri t i n g ,
s i g n e d b y t h e p a r t i e s , i n c l u d i n g t h e n u m b e r o f a r b i t r a t o rs a n d
d e c i s i o n . A r b i t r a t o rs i n e a c h c a s e h a d t o d e c i d e i n a s p i r i t o f
f a i r n e s s a n d n o t m er e l y s t r i c t o b s e r v a n c e o f t h e l a w . T h e r o l e o f
a r b i t r a t o r s i n a n c i en t G r e e k l a w s t r o n g l y r e m i n i s c e n t t h e b a s i c
c h a r a c t e r i s t i c s o f t h e m u n i c i p al c o u r t s ( j u g e d e p a i x ) o f F r e n c h
123
CARBONNEAU E. Thomas, Etude historique et compare de l’arbitrage, Revue Internationale
de droit comparé, 1984, pp. 727- 730.
90
l a w a f t e r t h e F r e n c h R e v o l u t i o n . A r b i t r a t i o n w a s f a v o u re d i n
m o s t a n ci e n t l e g a l s ys t e m s a n d h i s t o r i c a l l y f u n c t i o n e d a s a n
a m o n g t h e a n c i e n t G r e e k s a n d P h o e n i ci a n s t r a d e r s . 124
In a n c i e n t S u m e r i a, o n e o f t h e m o s t i n n o v a t i v e a n c i e n t
w h e n n e c e s s a r y e n f o r c e d e c i s i o n s . Fu r t h e r m o r e , t h e C o d e o f
H a m m u r a b i i n B a b y l o n i n c l u d e s c o n f i rm e d m e n t i o n s o f a d u t y t o
a d m i n i s t e r j u s t i c e t h r o u g h a r b i t r a t i o n . 125
In In d i a a r b i t r a t i o n h a s a l o n g h i s t o r y a n d t h e a r b i t r a t i o n
s ys t e m w h i c h w a s a f e a t u r e o f In d i a n l i f e , w a s v e r y s i m i l a r t o
t h e s ys t e m o f a n c i e n t G r e e c e . P e o p l e v o l u n t a r i l y p r e s e n t e d t h e i r
d i s p u t es t o a p e r s o n o r a g r o u p o f w i s e m e n o f t h e c o m m u n i t y,
d e c i s i o n s w e r e b i n d i n g . La t e r t h e “ R e g u l a t i o n o f B e n g a l ” i n
1 7 7 2 p r o v i d e d f o r ca s e s i n v o l v i n g p r i v a t e d i s p u t e s t o b e re f e r r e d
124
BONNER J. Robert, The Jurisdiction of Athenian Arbitrators, Classical Philology, vol.2, 1907,
pp. 132 -135.
125
WATSON Adam, op. cit., p. 57.
91
t o a r b i t r a t i o n . T h e f i r s t In d i a n A r b i t r a t i o n A c t w a s p a s s e d i n
1 8 8 9 a n d i t s e l em e n t s w e r e s i m i l a r t o m o d e r n a r b i t r a t i o n .
In E g yp t a n o r i g i n a l p a p yr u s f r o m t h e 3 r d c e n t u r y p r o v e s
m o d e r n a r b i t r a t i o n a n d i n t h e M i d d l e E a s t t h e c o n ce p t o f
a r b i t r a t i o n ( t h a k i m ) w a s p r a c t i c e d s i n c e t h e e a r l y d a ys o f Is l a m
a s a p e a c e f u l m e a n s o f s e t t l i n g d i s p u t e s . T h e a r b i t r a t i o n s ys t e m
i n E g yp t f o l l o w e d t h e p r o v i s i o n s o f t h e Is l a m i c S h ar i a i n
In C h i n a , t h e i n s t i t u t i o n o f a r b i t r a t i o n d a t e s f r o m 1 6 0 0
t h e m o r a l s i g n i f i c an c e o f t h e r e l a t i o n s h i p c a u s i n g t h e d i s p u t e
Zh o u t h e r e w e r e l o c a l j u d g e s t h e “ T i a o P e n ” , w h o s e m a i n
s o c i e t y, b e c a m e t h e m a i n m e t h o d f o r r e s o l v i n g d i s p u t e s a n d w a s
a n i n t e g r a l p a r t o f t h e l e g a l s ys t e m a n d n o t j u s t a n a l t e r n a t i v e .
92
and social teachings of Confucius. The Chinese believed that the
l a w s a r e n o t t h e a p p r o p r i a t e w a y t o r e g u l a t e d i s p u t e s i n e v e r yd a y
a v o i d t h e l a w c o u r t s ” . 126
In R o m a n t i m e s a r b i t r a t i o n w a s v e r y p o p u l a r . T h e R o m a n s
r e s o l v e d b y a t h i r d p a r t y, t h e a r b i t r a t o r . T h e a r b i t r a t o r w a s
t h e c o m m u n i t y a n d h a d n o r e l a t i o n t o s t a t e a u t h o r i t y. In t h e
p a r t y a k i n d o f p e n a l t y. H o w e v e r , i n g e n e r a l a r b i t r a t i o n w a s
o p t i o n al a n d t h e d e c i s i o n w a s n o t r e s j u d i c a t a . C i c e r o t e s t i f i e s t o
a r b i t r a t i o n a n d i n d i c a t e s w h a t c r i t er i a t h e R o m a n s u s e d t o
c h o o s e b e t w e e n t h e c o u r t s o r a r b i t r at i o n .
126
PAN Junwu, Chinese Philosophy and International Law, Asian Journal of International Law,
vol. 233, 2010, p. 6.
93
performed by the pope, by emperors or kings, parliaments and
b y t h e m e r c h a n t s . A t t h e e n d o f t h e 1 1 t h c e n t u r y t h e It a l i a n
c i t i e s h a d b e c o m e i n d e p e n d e n t a n d m e r c h a n t s o r g a n i z ed t h e i r
a n d h a d t h ei r o w n l e a d e r s h i p s u c h a s t h e “ C o n s u l e s M e r c a t o r u m ”
f u n c t i o n s a n d l e d t h e v a r i o u s u n i o n s a n d g u i l d s o f m e r c h a n t s . In
m a n y It a l i a n c i t i e s t h e u n i o n s a n d g u i l d s ex e r c i s e d p o w e r b y
a d o p t i n g r e g u l a t i o n s t o r e s o l v e t h e i r d i f f e r e n c e s . In i t i a l l y t h e s e
i n e f f i c i e n c y o f t r a d i t i o n al c o u r t s t o r e s o l v e t h e s e d i s p u t e s l e d t o
i s s u e s a n d a s p e c i f i c s u b s t a n t i v e l a w o f m e r c h a n t s , t h e “ Le x
f o r b i d d e n t o i n t e r f e r e w i t h t h e j u r i s d i c t i o n o f t h e a r b i t ra t o r s .
94
D u r i n g t h e e a r l y 1 0 t h c e n t u r y, i n En g l a n d , i n d i v i d u a l s
w i s h i n g t o s e t t l e a d i s p u t e r e s o rt e d t o j u r i e s w h i c h c o n s i s t e d o f
d i s p u t es a n d o p e r a t i n g t h e m s e l v e s a s l a w ye r s . 127 D u r i n g t h e 1 6 t h
c e n t u r y, c a s e s a r e r e f e r r e d t o a r b i t r a t o r s , n o t o n l y w i t h t h e
B r i t i s h a n d f o r e i g n e r s . T h e f i r s t r e c o r d e d j u d i c i al d ec i s i o n
a r b i t r a t i o n w a s s u b s t a n t i a l s o m et h i n g t h a t b o t h e r e d t h e j u d g e s
w h o c o n s i d e r e d a r b i t r a t i o n c o m p e t i t i v e a n d w e r e t r yi n g t o
b u s i n e s s m e n t o s u b m i t t h e i r d i s p u t es t o b e r e s o l v e d b y t h e
a r b i t r a t o r s a n d n o t t h e c o u r t s . In S c o t l a n d t h e e a r l i e s t k n o w n
w h i c h d a t e s t o t h e e a r l y 1 4 t h c e n t u r y. It e x a m i n e s i s s u e s , s u c h
a s w h o c o u l d r e f e r t h e d i s p u t e t o ar b i t r a t i o n , w h e n i t w a s
A s s t a t e d , F r a n c e i s o n e o f t h e h o m e l a n d s o f m o d e rn
127
CARTER T. Albert, op. cit., pp. 2, 3.
95
France dates back to the ancient courts “Pie poudre”, established
w a s n o t u s e d o f t e n , a l t h o u g h i t w a s a l l o w e d f o r m o s t c a s es a n d
u n d e r v a r i o u s d e c r e e s a d o p t e d i n t h e 1 6 t h c e n t u r y. A f t e r t h e
c o n s t i t u t i o n a l r i g h t o f c i t i z e n s t o r e s o r t t o a r b i t r a t i o n . In e a c h
j u d g e s a n d t h ei r m a i n c o n c e r n w a s t o r e c o n c i l e t h e p a r t i e s a n d
r e s o l v e t h e d i s p u t e i n q u e s t i o n b a s e d o n t h e p r i n c i p l e o f e q u i t y.
F a m i l y c o u r t s w e r e e s t a b l i s h e d t o a d j u d i c a t e d i s p u t e s b et w e e n
c o m m e r c e ” f o r c o m m e r c i a l d i s p u t e s . Th e “ N a p o l e o n i c C o d e ” a n d
t h e “ C o d e d e P r o c e d u r e C i v i l e ” a d o p t ed i n 1 8 0 6 a s w e l l a s t h e
c a s e s s u c h a s f o r d i s p u t es r e l a t i n g t o m a r i t i m e i n s u r a n c e a n d
d i s p u t es b e t w e e n t h e s h a r e h o l d e r s o f a c o m m e r c i a l c o m p an y. I n
o t h e r a r e a s , t h e l a w a u t h o r i z e d t h e s u b m i s s i o n o f ex i s t i n g
d i s p u t es t o a r b i t r a t i o n , b u t a r b i t r a t i o n cl a u s e s f o r f u t u r e d i s p u t e s
96
“ G e n e v a P r o t o c o l o n A r b i t r a t i o n ” C l a u s e s o f 1 9 2 3 , w i t h t h e La w
a r i s i n g f r o m c o m m e r c i a l r e l a t i o n s . S u b s e q u e n t l a w s en a c t e d
s p e c i f i c s e c t o r s w i t h o u t a n y c h a n g e s o n t h e p r o c e d u r a l r u l e s . 128
t r i b e , b u t al s o f o r t h e r e s o l u t i o n o f d i s p u t e s t h a t a r o s e b e t w e e n
a r b i t r a t i o n o p e r a t ed i n a c c o r d a n c e w i t h t h e B r i t i s h c u s t o m a r y
r e s o l u t i o n , f o l l o w e d b y P e n n s yl v a n i a i n 1 7 9 5 . B u t w h i l e t h e r e
a n d n o t wi d e l y a c c e p t e d . A r b i t r a t i o n w a s m e t w i t h h o s t i l i t y a n d
displacement of justice and public policy and the belief that the
e s t a b l i s h e d f o r m o f d i s p u t e r e s o l u t i o n b e f o r e t h e Am e r i c a n
R e v o l u t i o n . In 1 7 6 8 t h e “ N e w Y o r k C h a m b e r o f C o m m e r c e ” w a s
i t s m a i n a c t i v i t y w a s i n i t i al l y t o r e s o l v e d i s p u t e s b et w e e n
128
CARBONNEAU E Thomas, op. cit., pp. 9- 11.
97
merchants and in 1794 the arbitral tribunal in New Haven was
e s t a b l i s h e d . In 1 7 9 9 G e o r g e W a s h i n g t o n i n h i s w i l l , w h i c h
i n c l u d e d a n a r b i t r a t i o n c l a u s e , s t a t e d t h e e x p l i ci t i n t e n t i o n t h a t
a l l d i f f e r e n c e s ( i f a n y a r i s e u n f o r t u n a t e l y) m u s t b e s o l v e d b y
three impartial and intelligent men, known for their honesty and
disputants, the third chosen by these two, and the decision would
d e c i s i o n . In 1 8 9 1 i n P h i l a d e l p h i a t h e C h a m b e r o f C o m m e r c e w a s
e s t a b l i s h e d . A r b i t r a t i o n r e c e i v e d t h e f u l l s u p p o rt i n g o f t h e
S u p r e m e C o u r t i n 1 8 5 4 w h e n t h e co u r t u p h el d t h e r i g h t o f
i n s t i t u t i o n a l i z e d i n t h e US A i n 1 8 2 2 w h e n b u s i n e s s l e a d e r s
d i s c r e t i o n a r y p o w e r . In 1 9 1 9 a s m a l l g r o u p o f i n d u s t r i a l i s t s ,
w o u l d r e p r e s e n t b u s i n e s s e s e v e r yw h e r e a n d t h a t w o u l d b r i n g
h o p e t o a w o r l d d e s t r o ye d b y t h e r e c e n t w a r . T h e y m a n a g e d t o
r e p l a c e f e a r a n d s u s p i c i o n wi t h a n e w s p i r i t o f f r i e n d s h i p a n d
C h a m b e r o f C o m m e r c e ” ( IC C ) a n d c a l l e d t h e m s e l v e s t h e " T h e
m e r c h a n t s o f p e a c e " . In a n a t t e m p t t o o v e r c o m e t h e d i s t r u s t a n d
98
animosity in dealing with arbitration, the Chamber of Commerce
A m e r i c a ” c e a s e d t o e x i s t i n 1 9 2 6 an d w e r e r e p l a c e d b y t h e
“ A m e r i c a n A r b i t r a t i o n A s s o c i a t i o n ” ( A A A ) . In 1 9 2 5 C o n g r e s s
p a s s e d t h e A c t k n o w n a s t h e “ F e d e r a l A r b i t r a t i o n A c t ” (F A A )
i n t e r s t a t e o r i n t e r n at i o n a l c o m m e r c e b e c a m e e n f o r c e a b l e .
T h e r e c e n t ye a r s t o i m p r o v e t h e h a n d l i n g o f i n t e r n a t i o n a l
b e e n e s t a b l i s h e d . T h e m o s t f am o u s c e n t r e s o f i n t e r n a t i o n a l
a r b i t r a t i o n a r e t h e “ C h a m b r e d e C o m m e r c e In t e r n a t i o n a l e ” , t h e
C h a m b e r o f C o m m e r c e ” b a s e d i n P a r i s , t h e “ Lo n d o n C o u r t o f
A r b i t r a t i o n ” , t h e “ A m e r i c a n A r b i t r a t i o n A s s o c i a t i o n ” ( A A A) , t h e
“ In t e r - A m e r i c a n C o m m i s s i o n o f C o m m e r c i a l A r b i t r a t i o n ” , a n d
t h e “ In t e r n a t i o n a l C e n t r e f o r t h e S e t t l em e n t o f In v e s t m e n t
a r b i t r a t i o n i t b e c o m e s o b v i o u s t h at a r b i t r a t i o n i s a n i m p o r t a n t
99
t o o l fo r t h e p r o p e r f u n c t i o n i n g o f i n t e r n a t i o n a l t r a d e . T h e
c o n f i r m s i t s s i g n i f i c a n t v a l u e . To d a y i t i s c l e a r t h at a r b i t r a t i o n
p r e s e n t s a n u n p r e c e d e n t e d g r o w t h a n d h a s b e c o m e t h e p r ef e r r e d
C yb e r s p a c e .
i n d e p e n d e n t p e r s o n s w h o d e r i v e t h ei r a u t h o r i t y f r o m t h e p a r t i e s
t h e m s e l v e s a n d n o t b y t h e s t a t e , a n d r es o l v e t h e d i f f e r e n c e b a s e d
l e g a l l y b i n d i n g f o r t h e p a r t i e s . In a r b i t r a t i o n t h e p a r t i e s t ra n s f e r
the control over the outcome to the neutral party who has
d e c i s i o n m a k i n g a u t h o r i t y, m a k i n g a r b i t r a t i o n a k i n d o f p r i v a t e
j u d g i n g . 129 T h e p a r t i e s i n v o l v e d i n a d i s p u t e a g r e e t o s u b m i t
t h e i r d i s p u t e a n d p r e s e n t t h e i r e v i d e n c e t o a n e u t r a l p a rt y, t h e
129
RULE Colin, op. cit., p. 42.
100
d e c i s i o n . Th e a r b i t ra t o r h a s t h e p o w e r o f d e c i s i o n i n t h e d i s p u t e .
O n c e t h e d i s p u t e i s s u b m i t t e d t o b e r e s o l v e d t h r o u g h a r b i t ra t i o n ,
“ a p a r t y c a n n o t u n i l a t e r a l l y w i t h d r a w f r o m t h e a r b i t r a t i o n ” . 130
U n l i k e m e d i a t i o n , ar b i t r a t i o n i s n o t v o l u n t a r y b u t m a n d a t o ry a n d
i f t h e r e s p o n d e n t re f u s e s t o p a r t i c i p a t e i n t h e a r b i t r a t i o n , t h e
a r b i t r a t o r m a y i s s u e a d e f a u l t a w a r d . 131
O n e t h i n g t h a t m a k e s a r b i t r a t i o n s u c h a f a s c i n a t i n g s u b j e ct
i s i t s d u a l n at u r e . A r b i t r a t i o n i s a t t h e s a m e t i m e a n e x e r c i s e o f
o f c o n s c i o u s p r i v a t e c h o i c e a n d a l s o i t i s a n e x e r ci s e i n
j u d g m e n t o f a p u b l i c t r i b u n a l . 132 A r b i t r a t i o n i s a p r o c e d u r e h e l d
l i t i g a t i o n . 133 H o w e v e r , i t i s a p r i v a t e , m o r e f l e x i b l e a n d l es s
f o r m a l p r o c e s s t h a n l i t i g a t i o n i n co u r t t h at p r o d u c e s f i n a l
d e c i s i o n s , t h e a r b i t ra l a w a r d s , w h i c h a r e e q u a l l y b i n d i n g , a s w e l l
a s e a s i e r t o e n f o r c e i n t e r n a t i o n a l l y. F u r t h e r m o r e , l i k e m e d i a t i o n ,
130
HEUVEL V. D. Esther, op. cit., p. 5.
131
HÖRNLE Julia, op. cit., p. 59.
132
RAU Alan Scott, The Culture of American Arbitration and the Lessons of ADR, Texas
International Law Journal, vol. 40, 2005, p. 1.
133
GENN Hazel, Mediation in Action, Resolving Court Disputes Without Trial, (London:
Galouste Gulbenkian Foundation), 1999, p. 14.
101
“arbitration is for parties that are in conflict but nonetheless
w i s h t o p u r s u e t h e i r c o n t r a c t u a l r e l a t i o n s h i p ” . 134
T h e r e a r e d i f f e r e n t k i n d s o f a r b i t r at i o n ; f o r i n s t a n c e ,
d e p e n d i n g o n t h e n a t u r e o f t h e o u t c o m e, a r b i t r a t i o n c a n b e e i t h e r
a r b i t r a t i o n . Th e r e a r e m a n y t yp e s o f a r b i t r a t i o n s ys t e m s b e c a u s e
p a r t i e s c a n d e s i g n t h e m h o w e v e r t h e y c h o o s e . S o m e p r o ce d u r e s
a r e i n f o r m a l a l l o wi n g p a r t i e s t h e o p p o r t u n i t y t o p r e s e n t a n y
p e r m i t d i s c o v e r y a n d s o m e d o n o t . “ A rb i t r a t i o n h e a r i n g s c a n b e
f o r m a l b u t t h e r u l es o f e v i d e n c e u s e d i n c o u r t s d o n o t u s u a l l y
a p p l y” . 135 A r b i t r a t i o n s c a n b e h e l d w i t h a s i n g l e d e c i s i o n - m a k er
a n d o t h e r s c a n b e h e l d w i t h a p a n el o f t h r e e o r e v e n f i v e .
A r b i t r a t i o n s c a n b e d o c u m e n t s o n l y, i . e . w i t h o u t t h e n e e d f o r
p a r t i e s t o p r e s e n t t h e i r p o s i t i o n s i n f a c e - t o - f a c e h e a r i n gs . 136
A n o t h e r i m p o rt a n t d i s t i n c t i o n i s b e t w e e n a d h o c a n d i n s t i t u t i o n a l
a r b i t r a t i o n . In a d h o c a r b i t r a t i o n , o n e a r b i t r a t o r o r s e v e r a l
134
BENYEKHLEF Karim and GELINAS Fabien, op. cit., p. 49.
135
SHAMIR Yona, op. cit., p. 38.
136
RULE Colin, op. cit., p. 42.
102
t h e p a r t i e s h a v e t o r e c o u r s e t o n at i o n a l c o u r t s , s o m et h i n g t h a t
n o r m a l l y p a r t i e s w a n t t o a v o i d . H o w e v e r , t h e s a m e p r o b l em d o e s
n o t ex i s t w i t h i n s t i t u t i o n a l a r b i t r a t i o n , i n w h i c h t h e i n s t i t u t i o n
s t a b l e f o u n d at i o n f o r t h e b a s i s o f t h e a rb i t r a t i o n . 137
B. Choosing Arbitration
Li k e i n m e d i a t i o n , p a r t i e s c a n a g r e e t o u s e a r b i t r a t i o n t o
r e s o l v e t h e i r d i s p u t e s w h e n t h e y s i g n t h e i r i n i t i a l c o n t ra c t b y
i n c l u d i n g a n a r b i t r a t i o n c l a u s e , a c c o r d i n g t o w h i c h a l l d i s p u t es
a r b i t r a t i o n ) , b u t u s u a l l y c r e a t e s m o r e d i f f i c u l t i e s s i n ce t h e
m e t h o d o r d et a i l s c o n c e r n i n g i t . H o w ev e r , o n c e t h e p a r t i es h a v e
137
BENYEKHLEF Karim and GELINAS Fabien, op. cit., p. 50.
103
chosen arbitration to resolve their dispute they renounce the
the parties across the whole spectrum of the procedure, and the
state courts and the power to shape the terms and conditions for
A r b i t r a t i o n i s a wi d e l y u t i l i z e d A DR m e t h o d p a r t i c u l a rl y f o r
i s p u b l i ci t y, a r b i t r a t i o n t a k e s p l a c e b e h i n d c l o s e d d o o rs i n a
p r o v i d e s f l ex i b i l i t y a s t h e p a r t i e s a r e f r e e t o a g r e e o n a n d s h a p e
several aspects of the arbitration, such as the tie and place of the
“ C o n v e n t i o n a l wi s d o m s u g g e s t s t h a t b u s i n e s s e s c h o o s e b i n d i n g
l i t i g a t i o n i n s e v e r a l i m p o r t a n t t o t h e m a s p e c t s ” . 139 C o s t a n d t i m e
104
c o n f i d e n t i a l i t y, a n d t h e f i n a l i t y g u a r a n t e e d b y t h e r e n d e r i n g o f
c i v i l t r i a l , wi t h a rb i t r a t i o n p r o v i s i o n s u t i l i z e d i n al l k i n d s o f
contracts.
C. The Arbitrator
T h e a r b i t r a t o r c o m m u n i c a t e s wi t h t h e d i s p u t i n g p a r t i e s
s p e c i a l i s t w h o s e ex p e r t i s e w i l l c o r r e s p o n d t o t h e n a t u r e o f t h e
d i s p u t e . T h e p a r t i es c a n c h o o s e t h e a r b i t r a t o r , w h o wi l l r e s o l v e
s c h e m e , o r a n a r b i t ra t o r w h o i s n o t n e ce s s a r i l y l e g a l l y q u a l i f i e d ;
h o w e v e r , i n s o m e j u r i s d i c t i o n s , s u ch a s F r a n c e a n d In d i a ,
a r b i t r a t o r s n e e d t o h a v e a l e g a l b a c k g r o u n d . 140 P a r t i e s a r e f r e e t o
e x p e r i e n c e i n t h e s p e c i f i c f a c t u a l a n d l e g a l i s s u e s i n d i s p u t e ”. 141
140
LODDER R. Arno and ZELEZNIKOW John, op. cit., pp. 4, 5.
141
HEUVEL V. D. Esther, op. cit., p. 5.
105
The arbitrator can be an expert on the field relating to the
d i s p u t e i n c a s e s u c h a s a n a c c o u n t a n t o r a n e n g i n e e r . 142
s i m i l a r i t i e s t o t h e p r o c e s s i n c o u r t r o o m s , a r b i t r at o r s o f t en r e l y
t h e m a t t e r s o n wh i c h t h e y a r e c a l l e d i n t o d e c i d e . 143 T h e
i s s u e s a d e c i s i o n , wh i c h i s c a l l e d a r b i t ra l a w a r d . T h i s p r o ce s s i s
v e r y o f t e n l e s s f o r m a l a s w e l l a s m u c h f a s t e r t h a n t h e j u d i c i al
process.
a r b i t r a t o r i s s u e s a d e c i s i o n , t h e a r b i t ra l a w a r d , w h i c h i s l e g a l l y
142
SHAMIR Yona, op. cit., p. 38.
143
RULE Colin, op. cit., p. 42.
106
appealable, except in very limited instances. An arbitration
award is final in the sense that awards have “res judicata” effect
a n d o n c e a n a w a r d h a s b e e n i s s u e d , u n l e s s t h e a w ar d i s
s u c c e s s f u l l y c h a l l e n g e d , t h e s a m e m a t t e r c a n n o t b e b ro u g h t
b e f o r e a c o u r t o r a r b i t r a t i o n t r i b u n a l a g a i n . 144 D e c i s i o n s o f an
s u c h a s f r a u d o r m i s c o n d u c t b y t h e a r b i t r a t o r . E r r o r s o f f ac t o r
( N e w Y o r k , 1 9 5 8 ) ” . O n e o f t h e m a i n re a s o n s f o r t h e s u c ce s s o f
j u d g m e n t s . 146 T h e f a ct t h a t a w a r d s c a n b e e a s i l y e n f o r c e d i n a n y
144
HÖRNLE Julia, op. cit., p. 59.
145
STONE V.W. Katherine, Alternative dispute Resolution, Public Law & Legal Theory Research
Paper Series, 2004, p.1.
146
“The Convention requires the courts of the some 125 signatory states to acknowledge written
arbitration agreements, declare themselves incompetent to hear disputes that are subject to
arbitration clauses, and enforce awards in accordance with criteria set out in its provisions. The
New York Convention commits the states in question to recognizing and enforcing foreign arbitral
awards in accordance with a regime that essentially restricts their legal authority to the protection
107
of the signatory states is one of the main reasons why arbitration
“ U N C IT R A L Model La w on In t e r n a t i o n a l Commercial
A r b i t r a t i o n ” ( 1 9 8 5 ). T h e f i n a l i t y a n d b i n d i n g n a t u r e o f a r b i t r a l
a w a r d s m a k e a r b i t r a t i o n a u n i q u e an d i d e a l m e t h o d fo r t h e
l i t i g a t i o n a s a b i n d i n g a n d e n f o r c e a b l e a v e n u e f o r r e d r e s s . 148
E . T h e h y b r i d f o r ms
i. Conciliation
of public order, in other words, protection of the core values that would justify state intervention in
the most liberalized system”. See BENYEKHLEF Karim and GELINAS Fabien, op. cit., p. 51.
147
LODDER R. Arno and ZELEZNIKOW John, op. cit., pp. 4, 5.
148
HÖRNLE Julia, op. cit., p. 59.
108
h a r m o n i z a t i o n o r r ea c h i n g a s e t t l e m e n t b e t w e e n t w o c o n fl i c t i n g
p a r t i e s . T h i s p r o c e s s i s i n t e n d e d t o f a c i l i t a t e c o n t a c t b e t w ee n t h e
p a r t i e s t h r o u g h t h e i n t e r v e n t i o n o f a t h i r d p a r t y, t h e c o n c i l i a t o r ,
C o m m e r c i a l C o n ci l i a t i o n ” w a s a d o p t ed . A c c o r d i n g t o P a r t 1 ,
w h e t h e r r e f e r r e d t o b y t h e e x p r e s s i o n co n c i l i a t i o n , m e d i a t i o n , o r
o u t o f o r r e l a t e d t o a c o n t r a c t u a l o r o t h e r l e g a l r e l a t i o n s h i p ” . 149
In c o n c i l i a t i o n t h e t h i r d p a r t y u n d e r t a k e s t o a s s i s t t h e
b e c a u s e o f t h e i n v o l v e m e n t o f a t h i r d n e u t r a l p a r t y. C o n c i l i a t i o n
d i f f e r s f r o m a r b i t r at i o n i n t h at t h e o u t c o m e o f t h e c o n c i l i a t i o n
109
formulation of ad j u d i c a t i v e crisis. The distinction from
m e d i a t i o n i s n o t a l w a ys e a s y. F r e n c h t h e o r y c o n s i d e r s t h e
b o u n d a r i e s b et w e e n t h e t w o c o n c e p t s b l u r r y a n d t h e d i f f e r e n c e s
o n l y i n e x t e r n a l f e at u r e s s u c h a s p a ym e n t , r e f e r r a l t i m e , e t c . , b u t
e s s e n t i a l l y n o t h i n g c h a n g e s . In b o t h f o r m s t h e p a r t i e s t r u s t t h e
a b i l i t i e s o f a t h i r d p a r t y w h o f u l f i l l s ce r t a i n c o n d i t i o n s . P e r h a p s
t h e t h i r d p a r t y. W h e n t h i s p r o p o s a l o r s u g g e s t i o n i s s u b m i t t e d t o
d i f f e r e n c e s a r e s m a l l a n d h a r d l y a n yo n e c o u l d a r g u e t h a t t h e r e i s
r e a l c o n s i s t e n c y i n t h e c o n t r o v e r s y b e t w e e n m e d i at i o n a n d
c o n c i l i a t i o n , s i n c e t h e y a r e u s e d i n t e r c h a n g e a b l y, t h e y p r o v i d e
r a t h e r t h e o r e t i c a l b u t c o n c i l i a t i o n i s i d e n t i fi e d a s a d i s t i n c t
m e t h o d o f A DR .
150
HIBBERD Peter and NEWMAN Paul, op. cit., p. 59.
110
the process of conciliation, unless otherwise agreed by the
p a r t i e s . T h e ro l e o f t h e c o n c i l i a t o r i s t o a p p r o x i m a t e t h e v i e w s
o f t h e p a r t i e s a n d m o t i v at e t h em t o en t e r i n t o n e g o t i a t i o n s w i t h
c o n c i l i a t o r i s n o t p r i m a r i l y i n v o l v ed i n t h e e s s e n c e o f t h e
d i s p u t e , b u t i s l i m i t e d t o a c h i e v i n g t h e a p p r o p r i a t e c l i m at e f o r
r e s o l u t i o n . T h e c o n t i n u a t i o n o f d i s c u s s i o n s , t h e r e a s s u r an c e o f
d i s c u s s i o n s , c l a r i f yi n g t h e p r o p o s al s an d c o u n t e r p r o p o s a l s o f t h e
p a r t i e s , f i n d i n g ex t r e m e n e g o t i a t i n g b o u n d a r i e s , a n d m a k i n g
m u t u a l l y a c c e p t a b l e c o m p r o m i s e s f o r ac h i e v i n g a g r e e m e n t s , a r e
a t t e m p t t o r e a c h an a m i c a b l e s e t t l e m e n t o f t h e i r d i s p u t e . T h e
w r i t t e n r e p o r t f r o m i n t e r e s t e d p a r t i e s t o g e t h e r o r s e p a r a t e l y.
disclosed by any means to the other party with the care of the
c o n c i l i a t o r w i t h i n t h r e e d a ys . T h e r e p o r t d e s c r i b e s t h e c a s e a n d
m e t h o d s o f A D R , h a s a s i t s m a i n c h a r a c t e r i s t i c s f l ex i b i l i t y a n d
111
information whose disclosure is necessary to allow the
p r e s e n t a t i o n o f a p p r o p r i a t e ex p l a n a t i o n s f r o m t h e o t h e r p a r t y.
its non-binding nature and the right for the parties to participate
d i s t i n c t i o n b e c o m es t r u l y d i f f i c u l t a n d a r e b o t h c o n s i d er e d a s
d i s p u t es . 151
T h e t e r m m i n i - t ri a l i s a n A m e r i c a n i n v e n t i o n , w h i ch
a c c o r d i n g t o t h e E n g l i s h t e r m i n o l o g y, i s e n c o u n t e r e d a s e i t h e r
m i n i -t r i a l s o r ex e c u t i v e t r i b u n a l a n d d e s c r i b e s a n a l t e r n a t i v e
m e t h o d o f d i s p u t e re s o l u t i o n i d e a l f o r c o r p o r a t e a n d c o m m e r c i a l
d i s p u t es . U s u a l l y i t i s u s e d t o s o l v e m a j o r d i s p u t e s i n v o l v i n g
c o m p l ex m a t t e r s c o m b i n i n g l e g a l a n d f a c t u a l e l e m e n t s , s u c h a s
product liability and antitrust cases, but where the parties wish
t o m a i n t a i n a f ri e n d l y r e l a t i o n s h i p . It i s v o l u n t a r y a n d t h e
112
t h e p r o c e s s o f m i n i -t r i a l . T h e p r o c e s s i s i n f o r m a l , a s t h e r e a r e n o
the facts of the case and the evidence and these rules are defined
i n t h e a g r e e m e n t f o r t h e m i n i - t r i a l . T h e p r o c e s s i s v o l u n t ar y a n d
n o n - b i n d i n g b e c a u s e g e n e r a l l y t h e r e i s n o o b l i g a t i o n fo r t h e
r e a c h e d b y t h e a g r e e m e n t o f t h e p a r t i es . T h e g r e a t e s t a d v a n t a g e
o f m i n i -t r i a l s i s t h e i r i n f o r m a t i v e n a t u r e , s i n c e , e v e n i f t h e
i n f o r m e d a b o u t t h e c a s e a n d t h e s t r en g t h o f t h e i r a r g u m e n t s .
T h i s i s e s p e c i a l l y h e l p f u l f o r t h e re s o l u t i o n o f t h e d i s p u t e
t h r o u g h t r a d i t i o n al l i t i g a t i o n , w h i c h m o s t o f t e n f o l l o ws a m i n i -
o f b o t h s i d e s , a m i n i - t r i a l c a n b e a d a p t e d s o t h a t i t m e et s t h e
o f t h e n e u t r a l t h i r d p a r t y a n d a r e p r e s e n t a t i v e o f e a c h p a r t y. T h e
n e u t r a l t h i r d p a r t y c a n b e f o r i n s t a n c e a l a w ye r , a r e t i r e d j u d g e
o r a n e x p e r t r e l a t ed t o t h e s u b j e c t m a t t e r o f t h e d i s p u t e , o r
113
s o m e o n e w h o h a s e x t e n s i v e ex p e r i e n c e i n r e s o l v i n g d i s p u t e s .
T h e t h i r d n e u t r a l p ar t y i s a k e y p e r s o n i n t h e p r o c e s s a n d i t s r o l e
the parties usually have the power to bind each side, so usually
the people who are chosen have prestige and influence in the
p r o c e d u r e t o b e f o l l o w e d i n a m i n i - t r i al i s n o t a l w a ys g i v e n a n d
In i t i a l l y, t h e p a r t i e s a g r e e t o s e t t l e t h e i r d i s p u t e t h r o u g h m i n i -
w i t h d r a w f r o m t h e a g r e e m e n t o r t o t e r m i n a t e t h e p r o c es s , t h e
p r i n c i p l e o f c o n f i d en t i a l i t y e t c . In i t s m o d e r n f o r m , t h i s p r o c e s s
t h a t h a s n o b i n d i n g f o r c e b u t a l l o w s s t a k e h o l d e r s t o b e i n fo r m e d
l i s t e n t o a n o b j e c t i v e o p i n i o n b y a t h i r d n e u t r a l p a r t y. 152
A l t h o u g h d e s i g n e d a s a q u i c k t r i al , i t i s a c t u a l l y a m e a n s
t o h e a r t h e p a r t i e s a n d t h e v i e w o f t h e o t h e r s i d e a n d a t t em p t a
s u m m a r i e s o f w i t n e s s s t a t em e n t s , a g r e e o n p r o c e d u r e an d o n
152
NAMMOUR Fady, Théorie et Pratique de l’arbitrage interne et international, (Editions
Juridiques Sader), 2000, p. 15.
114
schedules, decide on the venue, the allocation of time, i.e. the
time each party will have at its disposal, the witnesses of each
side, the cost of process and all other details about the course of
t h e p r o c e d u r e . D u ri n g t h e h e a r i n g , e a c h s i d e s u m m a r i z e s t h e
p a r t i e s t o u n d e r s t a n d t h e i s s u e s , a n d i f n e c e s s a r y, e x p r e s s a n
a n d w e a k n e s s e s o f e a c h o p p o s i n g p a r t y ’ s o p i n i o n . In t h e p r o c e s s
resolving disputes in the courts. The neutral third party has the
r o l e o f a j u d g e o r a r b i t r a t o r wi t h o u t b e i n g a b l e t o i s s u e a
b i n d i n g d e c i s i o n . In t h e p r o c e s s , a l t h o u g h t h e r e i s e v i d e n c e ,
d e p o s i t s a n d a “ j u d g e ” p r e s i d i n g , i n f a c t t h e r e i s n o t r i al . T h e
t h r e e - m e m b e r c o m m i t t e e r e m i n d s t h e s yn t h e s i s of a three-
m e m b e r t r i b u n a l . Th i s h yb r i d t e c h n i q u e m a y p r e s e n t d i f f e r i n g
115
often facilitates the procedures for the presentation of evidence,
r e a c h a s o l u t i o n . M i n i - t ri a l s c a n b e m o r e e x p e n s i v e t h a n m o s t
dispute are able to communicate their side of the story and are
t h e c o n s e n t o f t h e p a r t i e s , c a n n o t l e ad t o r e s o l u t i o n . H o w e v e r ,
t r i a l . In m i n i - t r i al s t h e r e a r e r e p r e s e n t a t i v e s f o r e a c h o f t h e
p a r t i e s . T h e p a r t i es p r e s e n t t h e i r a r g u m e n t s , b u t d o n o t t a k e
a c t i v e r o l e i n t h e n e g o t i a t i o n s . T h e r e a r e t w o r e a s o n s wh y t h e
a p p r o a c h t h e i s s u es r e l a t i n g t o t h e d i s p u t e i n a s u b j ec t i v e
m a n n e r i n s t e a d o f r e m a i n i n g d i s t a n t an d o b j e c t i v e . T h e p a r t i e s
a l s o m a y b e b i a s e d o r a c t b a s e d o n e m o t i o n . T h e r e f o re , t h e
r e p r e s e n t a t i v e s , w h o a r e m o r e l i k e l y a b l e t o r e m a i n d i s t an t a n d
c a t e g o r i z e t h e o p p o s i n g e v i d e n c e a n d a r g u m e n t s . F i n a l l y, a m i n i -
116
trial differs from other forms of ADR, as it usually takes place
p a r t i e s c a n g o t o c o u r t w i t h o u t i t b ei n g r e v e a l e d . A s t h e b i g g e s t
d i s a d v a n t a g e s o f m i n i - t r i al s , t h e r e s h o u l d b e m e n t i o n e d t h e f a c t
t h a t m i n i -t r i a l s a r e n o t a p p r o p ri a t e f o r a l l c a s e s a n d t h e f a c t t h a t
m i n i -t r i a l s , w h e n t h e p a r t i e s w i l l e v e n t u a l l y s e e k l e g a l r e m e d y,
i n c r e a s e t h e c o s t s an d m a y d e l a y t h e r e s o l u t i o n o f t h e d i s p u t e. 153
t h r o u g h m i n i - t r i al s a n d a l s o p r o v i d e t h i r d n e u t r a l p a r t i e s . S u c h
o r g a n i z a t i o n s a r e t h e “ C e n t r e f o r E f f e c t i v e D i s p u t e R es o l u t i o n ”
A r b i t r a t o r s ” . In t h e U S A , s i m i l a r s e r v i c e s a r e p r o v i d e d b y t h e
“ A m e r i c a n A r b i t r a t i o n A s s o c i a t i o n ” ( AA A ) .
153
Alberta Law Reform Institute, Dispute Resolution: A Directory of Methods, Projects and
Resources, (Edmonton, Alberta), 1990, pp. 26, 27.
117
iii. Med-Arb
A n o t h e r h yb r i d p r o c e s s i s t h e o n e k n o w n a s M e d - A r b ,
w h i c h a s t h e n am e s u g g e s t s i s t h e r e s u l t o f c o m b i n i n g m ed i a t i o n
f l e x i b i l i t y a n d i n i t i a t i v e t h a t o f f e r s t h e m . In c o n t r a s t , t h e y
p r e f e r a r b i t r a t i o n b e c a u s e o f i t s b i n d i n g d e c i s i o n . In p r a c t i c e ,
m e t h o d i n o r d e r t o a c h i e v e m ax i m u m e f f e c t i v e n e s s . Th i s i s
a n d t h e n e e d s o f t h e d i s p u t e . T h i s a p p ro a c h i s c a l l e d m u l t i - t r a c k
o r m u l t i - s t e p d i s p u t e r e s o l u t i o n a p p r o ac h a n d i s u s e d m o r e o f t e n
t e c h n o l o g y. F o r i n s t a n c e , s u c h a n a p p r o a c h w a s u t i l i z e d i n t h e
p r o v i d e d f o r m e d i at i o n a n d i n c a s e o f f a i l u r e f o r a r b i t r a t i o n . 154
o f p a r t y a u t o n o m y w h i c h i s a b a s i c p r i n c i p l e o f c o n t r ac t l a w
i n t e r n a t i o n a l l y, p e o p l e c a n s e t t l e t h e i r d i s p u t es i n a n y w a y t h e y
w i s h a n d t h e p a r t i e s t o a d i s p u t e c an c o m b i n e m e d i a t i o n a n d
a r b i t r a t i o n wi t h o u t t h e n e e d t o h a v e r u l e s i s s u e d i n t h i s m a t t e r
154
CARROLL Eileen and MACKIE Karl, op. cit., p. 100.
118
by a national legislature or by an international organization.
a r b i t r a t i o n . H o w e v er , i n o r d e r t o a n s w e r t h e q u e s t i o n o f wh e t h e r
o r n o t t h e s e t w o m e t h o d s s h o u l d b e co m b i n e d , i t i s e s s en t i a l t o
e x a m i n e t h e d i f f e re n t t e c h n i q u e s o f c o m b i n i n g m e d i a t i o n a n d
arbitration.
a r b i t r a t o r f i n a l l y d e c i d e s o n t h e d i s p u t e. 155 T h e p r o b l em w i t h t h i s
method is the fact that the mediator and arbitrator is the same
A n o t h e r p r o b l em i s t h e c o n f i d e n t i a l i t y o f i n f o r m at i o n a n d t h e
t h e r e i s t h e r i s k o f t h e m e d i a t o r an d l a t e r a r b i t r a t o r t o u s e
i n f o r m a t i o n i n t h e a r b i t r a t i o n p r o c ee d i n g s , t h e p a r t i e s m a y
c l e a r t h a t t h e m e d i at o r m a y n o t d i s c l o s e c o n f i d e n t i a l i n f o rm a t i o n
a n d t h e a r b i t r a t o r m u s t t a k e a n i m p a r t i a l d e c i s i o n , h o w ev e r , t h e
155
TELFORD M. Elisabeth, Med-Arb: A Viable Dispute Resolution Alternative, IRC Press, 2000,
p. 1.
119
t w o d i f f e r e n t r o l e s c o n t r a s t e a c h o t h e r . 156 A n o b v i o u s a d v a n t a g e
o f t h i s m et h o d i s t h a t i t r e d u c e s t h e c o s t s a n d i n c r e a s e s t h e
a r b i t r a t i o n i s t h a t o f t h e a r b i t r a t o r a l s o a c t i n g a s a m ed i a t o r .
a t t e m p t e d . If t h e p a r t i e s c a n n o t r e s o l v e t h e d i s p u t e t h r o u g h
b i n d i n g a r b i t r a t i o n d e c i s i o n . Th i s l e a d s t o t h e s a m e p r o b l em s a s
t h o s e o f t h e c o m b i n a t i o n o f t h e f i rs t m e t h o d , t h e d i f f e r e n c e l i e s
i n t h e o r d e r o f t h es e p r o c e d u r e s . A g a i n h e r e t h e a l t e r n a t i o n o f
r o l e s i s t h e w e a k p o i n t ; s i n c e t h e e f f o r t o f t h e s am e p e r s o n i n
m a y p r o v e d a m a g i n g i f t h i s p e r s o n c o u l d b e b i a s e d b e c au s e o f
s e l f - c o n t r o l c o u l d ac t i n s u c h a p r o c e d u r e .
156
OGHIGIAN Haig, The Mediation/Arbitration Hybrid, Journal of International Arbitration, vol.
20, 2003, pp. 75, 76.
120
m e n t i o n e d i n t wo f o r m e r c o m b i n a t i o n s a r i s e h e r e , s i n c e t h e r e a r e
t w o d i f f e r e n t p e r s o n s , t h e r e i s n o i n f o rm a t i o n ex c h a n g e a n d e a c h
p r o c e d u r e i s g o v e r n e d b y i t s o w n p r i n c i p l e s . F i n a l l y, t h e r e i s t h e
c o m b i n a t i o n i n w h i c h a r b i t r a t i o n p r o ce e d i n g s a r e s u s p e n d e d t o
r o l e s o r t h e ri s k o f t h e m i s u s e o f i n f o r m a t i o n .
S u m m a r i z i n g , i t ca n b e s a i d t h a t t h e c o m b i n a t i o n o f
a t t h e s a m e t i m e i s q u i t e a r i s k y v e n t u r e . It i s d i f f i cu l t i n
e x p e r i e n c e d , t o b e a b l e t o a c t a s b o t h m e d i a t o r a n d a r b i t ra t o r o r
v i c e v e r s a . T h i s f a ct m a y c r e a t e p r o b l e m s r e l a t i n g t o t h e v a l i d i t y
of the award and may have as a result that the parties to the
“ c o n v e n t i o n a l f o r m s ” o f a r b i t r a t i o n a n d m e d i a t i o n . In c o n t r a s t ,
m a n n e r a n d c o m b i n e s t h e f l ex i b i l i t y o f m e d i a t i o n a n d t h e f i n a l
121
a n d b i n d i n g n a t u r e o f a r b i t r a t i o n . 157 M e d - A r b i s a h yb r i d p r o c e s s
c o m m o n f e a t u r e s wi t h o t h e r p r o c e d u r es a n d s p e c i f i c a l l y b i n d i n g
a r b i t r a t i o n . It s m a i n d e f e c t i s t h a t i t l a c k s s t r u c t u r e , w h i c h
iv. Ombudsman
O m b u d s m a n , w h e r e a n i n d e p e n d e n t t h i r d p a r t y w i t h ex p e r i e n c e
O m b u d s m a n ’ s a u t h o r i t y e x t e n d s f r o m t h e s i m p l e ex a m i n at i o n o f
c o m p l a i n t s t o t h e r e s o l u t i o n o f d i s p u t e s . 158 T h e i n s t i t u t i o n o f
t h e S w e d i s h e m p er o r b e i n g e x i l e d t o T u r k e y, i n s t i t u t e d t h e
d e l e g a t e . S u b s e q u en t l y, i t w a s a d o p t e d b y o t h e r N o r d i c c o u n t r i e s
157
CARROLL Eileen and MACKIE Karl, op. cit., pp. 101, 102.
158
GREGORY Roy, The Ombudsman: An Excellent Form of Alternative Dispute Resolution, The
International Ombudsman Yearbook, Vol. 5, 2001, p. 98.
122
(Finland in 1920, Denmark in 1953 and Norway in 1962), with
( e . g . t h e S w e d i s h Om b u d s m a n h a s ex p a n d e d i t s p o w e r s t o r e a c h
T o d a y, t h e O m b u d s m a n i s f o u n d i n s e v e r a l E u r o p e a n , A n g l o -
S a x o n , A s i a n a n d A f r i c a n c o u n t r i e s . In E u r o p e i t h a s b e e n
i n s t i t u t i o n a l i n d e p e n d e n c e a n d t h e i m m e d i a c y o f t h e e x e rc i s e o f
i t s j u ri s d i ct i o n . T h e i n s t i t u t i o n d e p e n d i n g o n e a c h c o u n t r y i s
C o n t r o l l e r ” , “ M e d i at e u r d e l a R e p u b l i q u e ” , a n d i s t a i l o r e d t o t h e
i n t h e c o n t ex t o f s e l f - r e g u l a t i o n , a n d i n a n a t t e m p t t o i m p r o v e
a c c e s s i b l e t o c o n s u m e r s w i t h o u t p a yi n g a f e e f o r t h e i r s e r v i c e s ,
123
they deal with matters already addressed by the company as part
are binding for the institutions that set them up and they do not
p r e v e n t t h e r e c o u r s e t o l i t i g a t i o n o r o t h e r p r o c e d u r e s . 159 T h e
O m b u d s m a n l i s t e n s t o t h e p a r t i e s , ex a m i n e s t h e i r c o m p l a i n t s a n d
i s s u e s a d e c i s i o n o r a r e c o m m e n d a t i o n . T h e O m b u d s m a n s ee k s t o
a d d r e s s c o m p l a i n t s b y m a k i n g s u g g e s t i o n s a n d t r yi n g t o p e r s u a d e
p r o p o s a l s t o p r e v en t r e c u r r e n c e o f e r r o r s b a s e d o n t h e s a m e
c o n f i d e n t i a l i t y, d i s c u s s p r i o r i t i e s a n d i n t e r e s t s i n o r d e r t o d e f i n e
t h e s c o p e f o r c o m p r o m i s e a n d o r i e n t p a r t i e s ’ c h o i ce s t o a
l o s s t h a t c h a r a c t e r i z e s t h e j u d i c i a l c o n t ro v e r s y. T h e t r a n s p a r e n c y
t h e e q u a l p a r t i c i p at i o n o f t h e p a r t i e s i n t h e p r o c e e d i n g s , t h e
e x p l a n at i o n o f t h e g r o u n d s f o r t h e r e j e ct i o n o f t h e r e q u e s t o f t h e
process.
159
STEYN H. Jan, Alternative Dispute Resolution: The Role of the Private Sector Ombudsman,
The International Ombudsman Yearbook, Vol. 5, 2001, p. 134.
124
In o r d e r t o g u a r a n t e e t h e g o o d o p e r a t i o n a n d r e s p o n s i b l e
b e e n e s t a b l i s h e d s u c h a s t h e “ B r i t i s h a n d Ir i s h O m b u d s m a n
“ N e d e r l a n d ’ s M e d i a t i o n In s t i t u t e ” . 161 O r g a n i z a t i o n s l i k e t h e s e
can have a supervisory role and can help promote uniform and
g u i d e l i n e s a n d c o d e s o f c o n d u c t , t ra i n i n g o f p e r s o n n e l a n d
m a k i n g s u r e t h a t t h e p u b l i c i s p r o p er l y i n f o r m e d a b o u t t h e i r
o p e r a t i o n . A l t h o u g h t h e r e a r e c o n c e r n s a b o u t c l a s s i f yi n g t h e
m a k e s i t a n A D R m e t h o d . 162
160
JAMES Rhoda, Private Ombudsmen and Public Law, (Aldershot: Dartmouth), 1997, p. 223.
161
DE ROO Annie and JAGTENBERG Rob, Mediation in the Netherlands: Past –Present-Future,
Electronic Journal of Comparative Law, vol. 6, 2002, p. 4.
162
BROWN J. Henry and MARRIOTT L. Arthur, op. cit., p. 279.
125
Chapter 3
t h e a n a l ys i s o f t h e a d v a n t a g e s a s w e l l a s t h e d i s a d v a n t a g e s o f
A D R . T h e d e m o n s t ra t i o n i s n e c e s s a r y i n o r d e r t o p r o v i d e a f u l l
e v a l u a t i o n o f A D R m e t h o d s a n d t o i l l u s t r a t e t h e i r i m p o r t an c e f o r
t h e r e s o l u t i o n o f d i s p u t e s . F u r t h e r m o r e, a s A D R a n d O D R s h a r e
m a n y c o m m o n a l i t i es m o s t o f t h e a d v an t a g e s a n d d i s a d v an t a g e s
w i l l b e e v i d e n c e d i n t h e n ex t p a r t o f t h e t h e s i s .
S e c t i o n 1 : Ad v a n t a g e s o f t h e t r a d i t i o n a l A D R me t h o d s
T h e d e v e l o p m e n t , wi d e s p r e a d a c c e p t a n c e a n d p r e f e r e n c e o f
a l t e r n a t i v e d i s p u t e r e s o l u t i o n p r e s u p p o s e c e r t a i n c h a r a c t e r i s t i cs
p o s i t i o n i n r e l a t i o n t o l i t i g a t i o n . T h e ad v a n t a g e s r e s u l t f r o m t h e
126
nature of the ADR methods which allow for a more informal
p r o c e d u r e , f a s t e r a n d l e s s c o s t l y, w h i c h i n t u r n a f f e c t s t h e
i n f l ex i b l e , t i m e c o n s u m i n g a n d c o s t l y. D e s p i t e t h e p o t e n t i a l
f l a w s o f A D R , i t s h o u l d b e n o t e d t h at t h e m u c h l a r g e r l i s t o f
b e n e f i t s , s h o w t h e g r e a t w o r t h o f A D R m e t h o d s . 163
A. Confidentiality
l i t i g a t i o n . U n l i k e co u r t - b a s e d s u i t s , w h e r e h e a r i n g a l a w s u i t m a y
p r o c e s s . T h e p u r e l y e x t r a j u d i ci a l n at u re o f A D R a s s e r t s t h a t t h e
p a r t i e s t o m a i n t ai n t h e e x i s t e n c e o f r i v a l r y a n d e f f o r t t o r e s o l v e
163
ROBERTS Simon, Alternative Dispute Resolution and Civil Justice; An Unresolved
Relationship, Modern Law Review, vol. 56, 1993, p. 452.
127
the dispute away from public view, as opposed to judicial
C o n s e q u e n t l y, t h e c o n f i d e n t i a l i t y o f A D R p r o t e c t s t h e p a r t i e s
r e s o l v e d m u c h f a s t e r t h a n w i t h t r a d i t i o n a l l i t i g a t i o n s i n ce t h e y
t yp i c a l l y r e s o l v e s t h e d i s p u t e i n a m a t t e r o f s e v e r a l d a ys , w e e k s
s e v e r a l ye a r s .
In addition, A D R m e t h o d s a l l o w fo r s i g n i f i c a n t cost
164
HUNTER Martin, PAULSSON Jan, RAWDING Nigel, REDFERN Alan, op. cit., pp. 71-73.
128
e v i d e n c e a n d e x p e r t w i t n e s s t e s t i m o n i es . T h e s i g n i f i c a n t s a v i n g s
t h a t o n l y A D R c a n p r o v i d e , b e c o m e e a s i l y e v i d e n t i n d i s p u t es
i n v o l v i n g p a t e n t i n fr i n g e m e n t , w h e r e “ t h e A m e r i c a n In t e l l e c t u a l
P r o p e r t y La w A s s o c i a t i o n r e p o r t e d t h a t t h e t o t a l c o s t o f a p a t e n t
between $500, 000 and $1.9 million, whereas the total cost
t h r o u g h b i n d i n g a r b i t r a t i o n o f a p a t en t i n f r i n g e m e n t c l a i m w a s
b e t w e e n a b o u t $ 9 9 , 0 0 0 a n d $ 5 0 0 , 0 0 0 ” . 165 T h e f a c t t h at
h a s a s i g n i f i c a n t i m p a c t o n t h e p a r t i e s . T h e c o s t a d v an t a g e s
o f t h e d i s p u t e . C o n s e q u e n t l y, t h e c o s t o f A D R c a n n o t b e
C. Conciliatory function
A n o t h e r i m p o rt a n t a d v a n t a g e o f A D R i s i t s c o n c i l i a t o r y
f u n c t i o n . T h e s e a l t er n a t i v e f o r m s o f d i s p u t e r e s o l u t i o n w h i c h a r e
165
CONA Frank, Focus on Cyber law: Application of Online Systems in ADR, Buffalo Law
Review, vol. 45, 1997, p. 984.
129
prestige (save face), since the resolution of the dispute lies in
b o t h s i d e s . 166 A D R “ f o c u s e s o n t h e o p p o r t u n i t i e s f o r j o i n t , r at h er
r a t h e r t h a n a z e r o - s u m ” . 167
Il l u s t r a t i n g t h i s i s t h e f a m o u s ex am p l e o f a d i s p u t e
t w o p a r t i e s a n d b o t h a r e c l a i m i n g t h a t t h e o r a n g e i s t h e i r o w n . If
b e t w e e n t h e m b a s e d o n t h e l e g i t i m a cy o f e a c h p a r t y’ s c l a i m .
f o r i n s t a n c e m e d i at i o n , t h e n e u t r a l w o u l d c o m m u n i c a t e m o r e
effectively with the parties and would reveal and focus on their
a c t u a l p u r p o s e s an d i n t e r e s t s , s u c h a s t h e i r i n t e n d f o r t h e
o r a n g e . In t h e e x a m p l e e a c h p a r t y h a s a d i f f e r e n t u s e f o r t h e
orange; one wants to use the rind for perfume and the other
wants the pulp for orange juice. The ADR process manages to
166
FIADJOE Albert, op. cit., p. 1.
167
MANEVY Isabelle, op. cit., p. 9.
130
find a fair and commonly acceptable solution that gives both
F u r t h e r m o r e , A D R a d v a n c e s s o c i a l h a r m o n y, s i n c e ( m o r e
r a p p r o c h e m e n t ” . 168 A D R e m p o w e r s t h e p a r t i e s t o p e r c e i v e t h e
n o t a g a i n s t e a c h o t h e r . T h e a g r e e m e n t t h a t w i l l r e s u l t f ro m t h e
r e s o l u t i o n o f t h e d i s p u t e s h o u l d r e f l e c t a s h a r e d v i s i o n fo r t h e
f u t u r e . It i s a p r o m i s e n o t o n l y t o r e s o l v e t h e c u r r e n t c o n f l i c t ,
b u t a l s o a b a s el i n e f o r d i f f e r e n c e s t h a t m i g h t e m e r g e i n t h e
o f t h e p a r t i e s ’ i n t e re s t s , a l l o w s t h em t o c o n t i n u e t h e b u s i n e s s o r
p r o f e s s i o n a l o r s o c i a l c yc l e s , a s i n t h e c a s e o f c u s t o d y o f
c o n t i n u a t i o n o f t h e r e l a t i o n s h i p i s c r u c i a l . In s t e a d , i n l i t i g a t i o n
168
COM/2002/0196 final, op. cit., p. 9.
131
ADR is considered one of the most important advantages of
A D R . 169
D. Flexibility
l i t i g a t i o n d u e t o t h e l e s s e r d e g r e e o f f o r m a l i t y. T h e i n f o r m a l
s e t t i n g p r o v i d e s t h e p a r t i e s w i t h f l ex i b i l i t y g i v i n g t h e m g r e a t e r
will be, “by choosing the forum, the procedure that will be
p e r s o n o r t o b e r e p r e s e n t e d ” . 170 M o r e o v e r , t h e p a r t i e s c a n ad o p t
a l l o w s p a r t i e s t o f o r m t h e m s el v e s t h e a g r e e m e n t , w h i c h c a n
provide for any solution that settles the dispute even the
p r e d i c t i o n o f f u t u re c o o p e r a t i o n b e t we e n t h e p a r t i e s , w h i c h n o
169
LANGELAAR V. Anton, Dispute Boards as an ADR Mechanism on Construction Projects in
Southern Africa, Arbitration International, vol. 70, 2004, p. 100.
170
COM/2002/0196 final, op. cit., p. 9.
132
judgment can order, since judgments consider the past, while
A D R a g r e e m e n t s m a y a l s o h a n d l e t h e f u t u r e . 171
T h e f l ex i b i l i t y e x t e n d s t o t h e n e u t r a l p a r t y a s w e l l a s t h e
p e r h a p s “ s e l e c t a n e u t r a l m o r e ex p e r t i n t h e i r d i s p u t e a r e a t h a n a
j u d g e ” . 172 F u r t h e r m o r e , t h e n e u t r a l p a r t y i t s el f e n j o ys f l e x i b i l i t y
r e l a t i n g t o t h e r e s o l u t i o n o f t h e d i s p u t e, s i n c e i t i s n o t b o u n d b y
principles like the stare decisis of the common law judges, and
c o u l d p o s s i b l y a c h i e v e . 173 U n l i k e a j u d g e w h o f o c u s e s o n t h e
o u t c o m e o f t h e r e s o l u t i o n , a l l o wi n g f o r c r e a t i v e s o l u t i o n s t h a t
c a n n o t b e r e a c h e d t h r o u g h t h e t r a d i t i o n a l j u d i ci a l r o u t e . 174
171
ALISON R. John, Five Ways to keep Disputes Out of Court, Harvard Business Review on
Negotiation and Conflict Resolution, 1997, pp. 163-187 .
172
MANEVY Isabelle, op. cit., p. 9.
173
BÜHRING-UHLE Christian, op. cit., p. 337.
174
For instance, “a judge has to grant reimbursement of the price paid for a defective product if the
plaintiff has a right to it. A mediator, who takes the parties’ rights into account but is not confined
to examining rights alone, is free to explore a more advantageous alternative solution for the
parties, for example, replacement of the defective product by one of greater value to the plaintiff
but less costly to the respondent than reimbursement”. See BENYEKHLEF Karim and GELINAS
Fabien, op. cit., p. 46.
133
S e c t i o n 2 : D r a w b a c k s o f t h e t r a d i t i o n a l A D R me t h o d s
F i r s t o f a l l i t m u s t b e n o t e d t h a t A DR m e t h o d s a r e b e s t
s o l u t i o n b a s e d o n co m p r o m i s e s . T h e i r b e s t q u a l i t i e s a r e t i m e a n d
c o s t e f f i c i e n c y a s w e l l a s f l ex i b i l i t y. H o w e v e r , a l t e r n a t i v e f o r m s
t o c r i t i ci s m e s p e c i a l l y b e c a u s e o f t h e f a c t t h a t t h e s e m e t h o d s
achieved and the ability to enforce it, while others focus on the
a l l e g a t i o n t h a t A DR p r o v i d e s a s e c o n d c l a s s j u s t i c e .
T h e f i r s t s e t o f d ra w b a c k s r e l a t e s t o t h e p a r t i e s a n d t h e
d i f f i c u l t i e s t h a t m a y a r i s e i n t h e i r r e l a t i o n s h i p . It s h o u l d b e
n o t e d t h at o f t e n p a r t i e s w h o p r e f e r t h e u s e o f A D R m et h o d s ,
b e l i e v e t h a t t h i s m ay b e p e r c e i v e d a s a w e a k n e s s . H o w e v e r , t h i s
134
can be avoided if in the original contract a clause is
d i s p u t e a r i s e s . 175 V o l u n t a r y A D R m e t h o d s c a n n o t b e e f f e c t i v e i f
i n v o l v em e n t i n t h e d i s p u t e , i f o n e o f t h e p a r t i e s h a s a d o p t e d
b i g p o w e r i m b a l a n c e b e t w e e n t h e p a r t i e s m a k i n g i t h a rd e r t o
o n t h e c o o p e r a t i o n o f t h e p a r t i e s b e c a u s e f o r m o s t A DR m e t h o d s
f i n a l i t y o f a g r e e m e n t s . 176 T h e r e f o r e , t h e r e s o l u t i o n d e p e n d s o n
s t a l l t h e l i t i g a t i o n p r o c e s s ” . 177 P a r t i c u l ar l y, v o l u n t a r y a n d n o n -
c o o p e r a t i o n a n d co m p l i a n c e wi t h t h e o u t c o m e t h e p ro c e s s ,
its decisions.
175
HUNTER Martin, PAULSSON Jan, RAWDING Nigel, REDFERN Alan, op. cit., pp. 71-74.
176
TWEEDDALE Andrew and TWEEDDALE Keren, Arbitration of Commercial Disputes,
International and English Law and Practice, (Oxford: Oxford University Press), 2005, pp. 5-6.
177
NOHAN-HALEY Jacqueline, Alternative Dispute Resolution in a nutshell, (West Academic
Publishing), Ed. 4, 2013, p.60.
135
B. For The procedure
“ p r o c e d u r a l a n d c o n s t i t u t i o n a l p ro t e c t i o n s o f a d v e r s a r i al j u s t i c e ,
s u c h a s t h e ri g h t t o a j u r y t r i a l a n d t h e r i g h t t o c o u n s e l ” . 178 T h e
s u p e r f l u o u s m at e r i a l t h u s i n c r e a s i n g t i m e a n d m o n e y. 179 O t h e rs
i n c o n f l i c t s o v e r j u r i s d i c t i o n al o r m o r a l i s s u e s , i t w i l l b e
d i f f i c u l t t o b ri n g a b o u t a c o m p r o m i s e b e t w e e n t h e d i s p u t a n t s .
A n o t h e r d i s a d v a n t ag e i s t h e f a c t t h a t t h e r e s o l u t i o n o f
issues through ADR is private and thus it may lead to the public
n o t f i n d i n g o u t cr u c i a l i n f o rm a t i o n t h a t c o u l d a f f e c t t h e m
d i r e c t l y o r i n d i r e c t l y. F o r i n s t a n c e , i f a c o m p a n y s o l d d e f e c t i v e
p r o d u c t s a n d h a r m fu l t o t h e h e a l t h o f c o n s u m e r s , b y r e s o l v i n g
t h e d i s p u t e t h r o u g h A D R , t h e c o m p a n y w o u l d n o t h a v e t o ex p o s e
t h e p r o b l e m p u b l i cl y, s o m e t h i n g t h a t w o u l d h a p p e n i f t h e l e g a l
a f f e c t s t h e h e a l t h o f c o n s u m e r s c o u l d re m a i n h i d d e n wi t h o u t t h e
178
Ibid., p. 59.
179
BÜHRING-UHLE Christian, op. cit., p. 339.
136
company being forced to take some drastic measures such as the
w i t h d r a w a l o f t h e d e f e c t i v e p r o d u c t fr o m t h e m a r k e t . F i n a l l y,
create a lack of precedent that does not help resolve latter cases.
h a s o n l y r e s j u d i c a t a a s t o e a c h p a r t i c u l a r d i s p u t e ” . 180
C. For Arbitration
r e f u s e s t o c o m p l y. H o w e v e r , t h i s n o t t h e c a s e w i t h a r b i t ra t i o n ,
m e t h o d e s p e c i al l y f o r c o m m e r c i a l d i s p u t e s . A r b i t r a t i o n h as b e e n
p o r t r a ye d , o v e r t h e p a s t s e v e r a l d e c a d e s , “ a s a m o r e e f f i c i e n t ,
l e s s c o s t l y, a n d m o r e f i n a l m et h o d f o r r e s o l v i n g d i s p u t e s w i t h
180
MANEVY Isabelle, op. cit., p. 10.
137
l i t t l e o r n o d i s c o v er y, m o t i o n p r a c t i c e , j u d i c i a l r e v i e w , o r o t h e r
t r a p p i n g s o f l i t i g a t i o n ” . 181
ye a r s . T h e a r g u m e n t s a g a i n s t a r b i t r a t i o n r e l a t e t o t h e c o n c e r n
c o n c e r n r e l a t e s t o t h e f a c t t h a t i n a rb i t r a t i o n , t h e a t t e m p t o f
a r b i t r a t o r s t o i n c r ea s e e f f i c i e n c y, m a y l e a d t o i n j u s t i c e , w h i c h
arbitral awards.
e x t e n t t h at a r b i t r a t i o n p r o c e d u r e s m a y c o m e t o b e v e r y s i m i l a r t o
n o w a d a ys a r b i t r a t i o n h a s b e c o m e f o r m al , c o s t l y, t i m e c o n s u m i n g
a n d s u b j e c t t o h a r d b a l l a d v o c a c y, “ t o t h e p o i n t t h a t i n t h e U . S .
l i t i g a t i o n ” . 182 H o w e v e r , m a n y o f t h e s e p r o b l e m s d i s a p p e a r w h en
e x a m i n e d ex t e n s i v el y i n t h e f o l l o w i n g p a r t s o f t h i s t h e s i s .
181
STIPANOWICH J. Thomas, op. cit., p. 8.
182
Ibid., p. 9.
138
D. Remarks
In e a c h c a s e , h o w e v e r , w e s h o u l d n o t e t h a t i t i s e n t i r e l y a t
a d o p t o r r e j e c t t h em . O n l y t h e p a r t i e s c a n d e c i d e w h e t h e r t h e
to save time and money and therefore are responsible for the way
o f A p p e a l s i n S a n F r a n c i s c o w h o t r a v e l e d t o Is r a e l t o m o n i t o r
t h e a p p l i c a t i o n o f t h e l a w o f d i v o rc e i n d i f f e r e n t r e l i g i o u s
r e s o l v e d b y t h r e e O r t h o d o x p r i e s t s , w h e r e t h e c o m p ro m i s e
proposed in the end satisfied both spouses who left the room
hand in hand, made her wonder about the resolution of the same
d i s p u t e t h r o u g h t h e t r a d i t i o n a l j u d i ci a l m e t h o d , w i t h o r d er s f o r
l a w ye r s . 183 It s h o u l d al s o b e n o t e d t h a t t h e u n d e n i a b l e f a c t o f t h e
183
ALISON R. John, op. cit., p. 167.
139
attention and create the conditions for the extension of the use
o f A D R i n a w i d e ra n g e o f c a s e s a n d p a r t i c u l a r l y i n t h e f i e l d o f
f a m i l y, l a b o r a n d c o m m e r c i a l r e l a t i o n s h i p s .
140
Title 2
A s m e n t i o n e d , A DR m e t h o d s ex i s t s i n c e t h e e a r l y d a ys o f
o t h e r o r w h o h a v e a t l e a s t s e e n e a c h o t h e r ” . 184 T h e e x p l o s i v e
184
WAHAB S. A. Mohamed, The Global Information Society and Online Dispute Resolution: A
New Dawn for Dispute Resolution, Journal of International Arbitration, vol. 21, 2004, p. 143.
141
T h e a r r i v a l o f In t e r n e t t e c h n o l o g y 185 a l l o w e d p e o p l e t o
i n t e r a c t w i t h e a c h o t h e r i n a n i n s t a n ce f r o m a n yw h e r e o n t h e
p l a n e t . T o d a y t h e I n t e r n e t 186 i s t h e l a r g e s t c o m p u t e r s ys t e m i n
b r i n g s i n t o d i r e c t co n t a c t p e o p l e f r o m a l l c o r n e r s o f t h e w o r l d . It
i s a l s o c a l l e d N e t o r In f o r m a t i o n H i g h w a y o r C yb e r s p a c e . 188 T h e
u n i v e r s a l i t y a n d g l o b a l n a t u r e o f t h e In t e r n e t , 189 w h i c h e x i s t s
e v e r yw h e r e a n d n o w h e r e a t t h e s a m e t i m e , m a k i n g b o r d e r s
u n n e c e s s a r y, 190 a l l o ws d a i l y t r a n s a c t i o n s t o p e o p l e al l o v e r t h e
w o r l d . In t h e C yb e r - w o r l d d i s p u t e s m a y a r i s e “ o v e r s o m e t h i n g
t h a t d o e s n o t e v e n p h ys i c a l l y e x i s t o r t h a t c a n b e c h a n g e d w i t h a
185
“The Internet began in 1969 as experimental network called ARPANET and funded by the US
Department of Defense to insure that its computer system would remain functional in the event of
an enemy attack. In the 1980s, the National Science Foundation (NSF), the scientific and technical
agency of the United States Federal government expanded ARPANET. In 1989, the name “World
Wide Web” was invented by the European Center of nuclear research in Geneva. Then, the rise of
popularity of the Internet in the United States coincided with the outsourcing in 1995 of the
internet management from NSF to the private sector”. See MANEVY Isabelle, op. cit., p. 5.
186
The term Internet derives from the words International / Interconnected / Network. For a
definition, see MILLET J. Marcus, Same Game in a New Domain- Some Trademark Issues on the
Internet, New Jersey Lawyer, vol. 198, 1999, p. 32. “Professor Chris Reed defines the internet as
‘an open network which permits communication between parties without the need for both to
subscribe to the same closed network’”. See WANG Fangfei Faye, Online Dispute Resolution -
Technology, management and legal practice from an international perspective, (Chandos
Publishing: Oxford · England), 2009, p. 2.
187
Data Protection Working Group, Privacy in the Internet, 2000, p.64
188
Cyberspace: the term first appeared in 1984 in the science fiction novels of William Gibson
''Neuromancer''. Officially the term was first introduced in 1996 by the Federal Court of
Pennsylvania, as means of communication and decentralized world, connecting people,
organizations, companies, governments around the world.
189
KRISTULA Dave, The History of the Internet, 2001, available at
http://www.davesite.com/webstation/net-history.shtml
190
GINSBURG C. Jane, Putting cars on the “Information superhighway“: authors, exploiters, and
copyright in Cyberspace, Columbia Law Review, vol. 95, 1995, p. 1467.
142
p u s h o f a b u t t o n ” . 191 A s a n a t u r a l c o n s e q u e n c e , t h e i n c r e a s ed
s e r v i c e s 192 i n e v i t a b l y l e a d s t o t h e c r e a t i o n o f o n l i n e l e g a l
r e l a t i o n s h i p s i n v o l v i n g m o r e j u r i s d i c t i o n s . 193 In i t i a l l y, b e f o r e t h e
any economic relevance and the disputes that arose were limited
d i s p u t es b e t w e e n u s e r s w h o w o u l d g e t c a u g h t i n “ f l a m e w a r s ” ,
w i t h h i g h t e m p e r e d d i s c u s s i o n s a n d i n s u l t s ex c h a n g e d a n d w h e r e
t h e a t t e m p t f o r r e s o l u t i o n ex t e n d e d t o t h e i n t e r v e n t i o n b y f o r u m
i n t e r n e t w a s m a i n l y u s e d b y t h e m i l i t a r y, g o v e r n m e n t a l a n d
a c a d e m i c s e c t o r s . Ho w e v e r , t h e s i t u a t i o n d r a s t i c a l l y c h a n g e d
l e d t o w h a t i s t o d ay k n o w n a s e - c o m m e r c e . 194 It i s o n l y w i t h i n
191
ARSIC Jasna, International commercial arbitration on the Internet – Has the future come too
early?, Journal of International Arbitration, vol. 14, 1997, p. 209.
192
LESSIG Lawrence, SLAUGHTER Anne-Marie and ZITTRAIN Jonathan, Developments in the
Law of Cyberspace, Harvard Law Review, vol. 112, 1999, pp. 1578, 1579.
193
O’ ROURKE A. Maureen, Fencing Cyberspace: Drawing borders in virtual world,
Massachusetts law Review, vol. 82, 1998, p. 615.
194
The term electronic commerce or e-commerce describes the sale and purchase of goods or
services by electronic means, over computer mediated networks and particularly over the Internet.
It includes transactions between businesses, households, individuals, governments, and other
public or private organizations”. See DUCA D. Louis, RULE Colin, LOEBL Zbynek, Facilitating
Expansion of Cross-Border E-Commerce - Developing a Global Online Dispute Resolution
System (Lessons Derived from Existing ODR Systems – Work of the United Nations Commission
on International Trade Law), Penn State Journal of Law & International Affairs, vol.1, No. 1,
2012, pp. 58, 59.
143
t h e l a s t t e n ye a r s t h a t c o m m e r c e h a s i n c r e a s i n g l y b e e n c o n d u c t e d
e l e c t r o n i c a l l y. 195
T h e p o p u l a r i t y a n d e x t e n d e d u s e o f el e c t r o n i c c o m m e r c e
h a v e b e e n e n t e r e d i n t o o n l i n e , r e g a r d i n g p r i c e , l a t e d e l i v e r y,
d e f e c t s a n d s p e c i f i c a t i o n s ” . 196 B e f o r e t h e In t e r n e t , c r o s s b o r d er
c o m m e r c e w a s l i m i t e d t o l a r g e i n t e r n a t i o n a l c o m p a n i e s , wh e r e a s
c o n s u m e r s c o n d u c t e d m o s t o f t h e i r s h o p p i n g l o c a l l y. H o w e v e r ,
t o d a y c r o s s b o r d e r o n l i n e s h o p p i n g i s a v a i l a b l e t o a n yo n e w i t h a
n o n - d e l i v e r y o f g o o d s a n d t h e d i f fi c u l t y o b t a i n i n g r e f u n d s a
i n c r e a s e o f e - c o m m e r c e 197 w h i c h i n t u r n l e a d s t o t h e i n c r e a s e o f
195
WANG Fangfei Faye, op. cit., p. 2.
196
EU study on the Legal analysis of a Single Market for the Information Society, op. cit., p. `13.
197
“In the late 1990s roughly between two and five percent of the world’s population used the
Internet. By 2010, however, that percentage had increased to nearly thirty percent, with users
dispersed over every geographic region around the globe. The acceptance of the Internet as a
commercial trading platform also increased and continues to increase as the number of commercial
transactions that consumers complete online continues its meteoric rise, so too does the amount
these consumers are spending. From 1999 to 2009, for example, the value of e-commerce in the
United States alone expanded nearly 400% from $33 billion in 1999, at best, to $182 billion in
2009. At the same time, internet usage in the United States expanded from 36.6% of the
population to an enormous 78.1%. For the period 2009-2015, e-commerce sales in the United
States are projected to rise 10% a year to a total of $279 billion by 2015. For the period of 2010-
2015 worldwide, e-commerce sales are projected to rise at the rate of 19% per year from a total
$572.5 billion to $1.4 trillion in 2015”. Ibid., pp. 59, 60
144
o n l i n e d i s p u t e s a s ra p i d l y a s e - c o m m e r c e i t s e l f . 198 In t h e p a s t t wo
decades the world has entered what can only be described as the
digital era and the ever emerging new technologies such as the
i n t e r n e t ( w h i c h b ec o m e s m o r e a n d m o r e a c c e s s i b l e e v e r y d a y
e v e n w i r e l e s s l y) , t h e n e w g e n e r a t i o n m o b i l e p h o n e s , s a t e l l i t e s
( o r “ d r i v e - t h r u ” ) s o c i e t y; “ a s i n t h e p a s t d r i v e t h r o u g h w i n d o w s
t h e i r c a r s , t o d a y, t h e s e c o n v e n i e n c e w i n d o w s a r e p r o v i d e d f o r
t h i n g s s u c h a s m a r ri a g e a n d p o l i t i c a l co n s t i t u e n c y s e r v i c e s a n d
b u yi n g , t r a n s a c t i n g , a n d c o m m u n i c a t i n g q u i c k l y, c o n v e n i e n t l y,
a n d w i t h o u t p e o p l e l e a v i n g t h e i r c a r s , c o u c h e s o r c o m p u t e r s ” . 199
T h e r e f o r e , t h e q u e s t i o n t h a t n at u r a l l y a r i s e s i s w h et h e r t o
a d o p t t r a d i t i o n al d i s p u t e r e s o l u t i o n m et h o d s f o r t h e r e s o l u t i o n o f
s u i t e d t o t h e n e w r ea l i t y o f a n i n c r e a s i n g l y v i r t u a l w o r l d . In t h e
w i t h e a c h o t h e r f r o m a n yw h e r e i n t h e w o r l d , t h e r e i s a g r e a t e r
198
“Between 1 and 3 % of all Internet transactions end up in some kind of disputes. Unofficial
estimates put the number of online disputes into the hundreds of millions of cases per year, maybe
even into the billions.” See RULE Colin, op. cit., p. 37
199
SCHMITZ J. Amy, ‘Drive-thru’ Arbitration in the Digital Age: Empowering Consumers
through Binding ODR, Baylor Law Review, vol. 62, 2010, pp. 179- 182.
145
misunderstandings, mistakes or simply fraud. For disputes
a r i s i n g o u t o f t h e s e k i n d s o f r e l a t i o n s , t h e t r a d i t i o n a l m ea n s o f
c o n s u m i n g a n d ex p e n s i v e m a i n l y b e c a u s e o f t h e l o w v a l u e , t h e
h i g h v o l u m e o f t h e t r a n s a c t i o n s a n d t h e p h ys i c a l d i s t a n c e
d i s p u t es . 200 In t h i s o n l i n e e n v i r o n m e n t , d i s p u t e s e t t l e m e n t f a c es
d i f f i c u l t y o f d e t e r m i n i n g t h e a p p l i c ab l e l a w a n d t h e c o m p e t e n t
c r e a t e l a c k o f e f f e c t i v e r e d r e s s a n d n ec e s s i t a t e a c c e s s t o j u s t i c e
c o u r t j u s t i c e i s t h e i n a d e q u a c y o f c u r r e n t p r i v a t e i n t e r n a t i o n al
p r o b l e m s r e l a t i n g t o j u r i s d i c t i o n a n d ch o i c e o f l a w . A c c o rd i n g t o
p r i v a t e i n t e r n a t i o n al l a w t h e d et e r m i n a t i o n o f j u r i s d i c t i o n a n d
a c c o r d i n g t o c e r t a i n c o n f l i c t r u l e s . Ho w e v e r , t h i s l o c a l i z a t i o n
c a n b e c o n s i d e r a b l y h a r d e r i n t h e d e l o c a l i z e d o n l i n e w o r l d . In
d e t e r m i n e , f o r i n s t an c e , t h e d e f e n d a n t ’s d o m i ci l e o r t h e p l a c e o f
200
CORTES Pablo, Online Dispute Resolution for Consumers in the European Union (Routledge:
London and New York), 2011, p. 2.
146
t h e s p e c i f i c p e r f o r m a n c e o r t h e p l a ce i n w h i c h t h e b ra n c h ,
l a w , a g a i n , i t m i g h t b e d i f f i c u l t t o d et e r m i n e , f o r i n s t a n c e , t h e
d o m i c i l e o f t h e p a rt i e s , s i n c e t h e y c a n a c c e s s t h e In t e r n e t f r o m
a n yw h e r e i n t h e wo r l d . T h e d e t e r m i n a t i o n t h e j u r i s d i c t i o n a n d
t h e l a w a p p l i c a b l e i n d i s p u t e s , w h i ch a r e e s s e n t i a l f o r l e g a l
c e r t a i n t y, a r e v e r y d i f f i c u l t i n o n l i n e t r a n s a c t i o n s . “C yb e r s p a c e
t r a n s a c t i o n s a r e i n t e n s i o n wi t h t h e p r i v a t e i n t e r n a t i o n a l l a w
r u l e s , w h i c h a r e t e rr i t o r i a l a n d n a t i o n a l i n n a t u r e ” . 201
T h e r a p i d g r o w t h o f In t e r n e t t e c h n o l o g y p o i n t e d o n c e m o r e
t o a l t e r n a t i v e d i s p u t e r e s o l u t i o n . V e r y s o o n i t b e c a m e c l e ar t h a t
t h e u n i q u e n a t u r e o f t h e c yb e r s p a c e a n d o n l i n e d i s p u t e s c o u l d
n o t b e r e s o l v e d e f f e c t i v e l y b y t h e t r a d i t i o n al c o u r t s . In t h e c a s e
o f e - c o m m e r c e d i s p u t e s , r e c o u r s e t h ro u g h t r a d i t i o n a l j u d i c i a l
m e c h a n i s m s p r e s e n t s s e v e r a l d i f f i c u l t i e s w i t h m o s t i m p o r t an t t h e
w i t h o u t b o u n d a r i e s , t h e c h o i c e o f t h e a p p l i c a b l e l a w an d t h e
c o m p l ex i t i e s t h a t at t h e v e r y l e a s t m a k e r e c o u r s e a v e r y t i m e
c o n s u m i n g a n d u n af f o r d a b l e p r o c e s s . T h e r e f o r e , “ a s e c o n o m i c
t h e i r a c t i v i t i e s , t h ey h a v e n o c h o i c e b u t t o t u r n t o m e c h a n i s m s
201
HERBOCZKOVÁ Jana, op. cit., pp. 2, 3
147
t h a t u t i l i z e a n d c h al l e n g e t h e f r e e d o m t o c o n t r a c t ” . 202 T h e n e e d
f o r s p e e d y, a f f o r d a b l e a n d r e l i a b l e j u s t i c e b r o u g h t f o r t h o n c e
a p p r o p r i a t e m e a n s . T h e c h a r a c t e r i s t i c s o f t h e In t e r n e t m a k e
c o n t r o v e r s i e s t h a t ar i s e i n t h e o n l i n e wo r l d . T h e i n t e r n e t i n v i t e s
p a r t i c i p a t e i n t r a d i t i o n al A D R p r o c ed u r e s e s p e c i a l l y i f o n e
a c c o u n t s f o r t h e g r e a t t r a v e l ex p e n s e s t h a t a c c o m p a n y t h e g l o b a l
n a t u r e a n d t h e l o w v a l u e o f o n l i n e d i s p u t e s . F u r t h er m o r e ,
c u l t i v a t e s m o r e s t ra n g e r t o s t r a n g e r r e l a t i o n s h i p s . 203 F o r t h e s e
k i n d s o f d i s p u t e s l i t i g a t i o n a s w e l l as t r a d i t i o n a l A D R s i m p l y
e l e c t r o n i c e n v i r o n m e n t . A n e w d i s p u t e r e s o l u t i o n s ys t e m w a s
n e e d e d t h a t w o u l d p r o v i d e e f f e c t i v e s o l u t i o n s i n a s h o r t er t i m e
f r a m e , w i t h t h e p o s s i b i l i t y o f u s i n g e x p e r t s a n d a l l t h a t wi t h t h e
c o s t b e i n g p r o p o r t i o n a l l y a p p r o p r i a t e t o t h e s p e c i f i c n at u r e o f
online disputes.
202
BENYEKHLEF Karim and GELINAS Fabien, op. cit., p. 35.
203
PERRITT Henry, Dispute Resolution in Cyberspace: Demand for New Forms of ADR, Ohio
State Journal of Dispute Resolution, vol. 15, 2000, p. 675.
148
Since such disputes n o r m al l y generate from online
a c t i v i t i e s i n t h e C yb e r - w o r l d , i t w o u l d b e r e a s o n a b l e t o a s s u m e
w o r l d . T h e p r o p o s ed s o l u t i o n t o h a n d l e s u c h d i s p u t e s w a s t o u s e ,
d i s p u t e r e s o l u t i o n (O D R ) m e c h a n i s m s . T h e i n t e r n e t w a s a l r e a d y
w h o w e r e f i r s t l e a r n i n g a b o u t A D R . 204 H o w e v e r , “ f r o m 1 9 9 5 t o
c o m m e r c i a l s i t e s o ff e r i n g O D R s e r v i c e s , s u c h a s “ S q u a r e T r a d e ” ,
204
VICTORIO M. Richard, Internet Dispute Resolution (iDR): Bringing ADR into the 21st
Century, Pepperdine Dispute Resolution Law .Journal, vol. 1, 2001, pp. 3-5.
205
POBLET Marta, Mobile Technologies for Conflict Management: Online Dispute Resolution,
Governance, Participation, (Springer), 2001, p. 8.
149
d i s p u t es . For instance, t r a d i t i o n al offline arbitration and
r a i s e d b y o n l i n e t e ch n o l o g y. F u r t h e r m o r e , s o m e s t a t u t o r y d i s p u t e
resolution schemes that use ODR have been established but more
i m p o r t a n t l y, r e c e n t ye a r s h a v e a l s o s e e n a n a m o u n t o f p r i v a t e
e n t r e p r e n e u r i a l a c t i v i t y i n t h e O D R f i e l d . 206 R e s o l v i n g d i s p u t es
o v e r t h e In t e r n e t w i l l p l a y a n e v e n m o r e i m p o r t a n t r o l e i n t h e
f u t u r e o f e l e c t r o n i c c o m m e r c e . 207
T h e f o l l o w i n g p a r t o f t h e t h e s i s a n a l ys e s i n d e p t h O DR a n d
a l l i t s s u r r o u n d i n g i s s u e s . It d e f i n e s O D R , t h e t e c h n o l o g y u s e d ,
t h e f i r s t t h at a p p e a r e d t o o n e s o p e r a t i n g s u c c e s s f u l l y u n t i l t h i s
d a y. It d e m o n s t r a t e s t h e n u m e r o u s a d v a n t a g e s o f O D R a n d t h e
f e w u n w e l c o m e d r a w b a c k s . T h i s e x am i n a t i o n i l l u s t r a t e s t h a t
p e o p l e i n t e r a c t c r e a t e d b y t h e i n n o v a t i o n s o f t h e d i g i t a l er a b u t
online.
206
HÖRNLE Julia, op. cit., p. 76.
207
SCHULTZ Thomas, BONNET Vincent, BOUDAOUD Karima, KAUFMANN-KOHLER
Gabrielle, HARMS Jürgen and LANGER Dirk, “Electronic Communication Issues Related To
Online Dispute Resolution Systems”, Proc. WWW2002 – The Eleventh International World Wide
Web Conference – Alternate Track CFP: Web Engineering, Honolulu, Hawaii, conference on 7-11
May, 2002, p. 2, available at http://www2002.org/globaltrack.html
150
Chapter 1
T h i s c h a p t e r i s an i n d e p t h ex a m i n a t i o n o f O DR . It
O D R w a s b o r n , i d en t i f i e s t h e c o n t r i b u t i o n o f t h e t e c h n o l o g y a s
t h e “ f o u r t h ” p a r t y a n d a n a l yz e s t h e f u n d a m e n t a l O D R m e t h o d s .
It i s d i f f i c u l t t o a t t r i b u t e a n a u t o n o m o u s d e f i n i t i o n t o O DR
t h e s yn e r g y b e t w e e n t r a d i t i o n a l A D R a n d IC T . T h e v a r i e t y o f
t e r m s u s e d t o d e s c ri b e t h e f i e l d o f O DR m i g h t s o u n d c o n f u s i n g
“ T e c h n o l o g y m e d i a t e d d i s p u t e r e s o l u t i o n ” ( T M D R ) , “ E l e c t ro n i c -
A D R ” ( e - A D R ) , “ On l i n e A DR ” ( o - A DR ) a n d “ In t e r n e t D i s p u t e
151
c o m b i n a t i o n o f A DR a n d IC T , a s a m e t h o d o f r e s o l v i n g d i s p u t e s
t h a t w e r e a r i s i n g o n l i n e , “ a n d f o r w h i c h t r a d i t i o n a l m ea n s o f
c o m p l e m e n t e d w i t h IC T a n d O D R s t a rt e d o u t a s t h e c o n d u c t i n g
o f A D R p r o c e s s e s o n l i n e . 209
O D R h a s b e e n a b ro a d t e r m t h a t h a s c o v e r e d m a n y f o r m s
o f d i s p u t e r e s o l u t i o n i n c o r p o r a t i n g t h e u s e o f t h e In t e r n e t a n d
c o m p l e m e n t e d wi t h IC T t o o l s ; “ h o w ev e r , p a r t o f t h e d o c t r i n e
i n c o r p o r a t e s a b r o ad e r a p p r o a c h i n c l u d i n g o n l i n e l i t i g a t i o n a n d
IC T ” . 210 T h e l e t t e r d e f i n i t i o n f o r O D R i n c o r p o r a t e s a l l f l ex i b l e
m e t h o d s u s e d t o re s o l v e d i s p u t e s t h a t a r e c o n d u c t e d m a i n l y
t h r o u g h t h e u s e o f IC T . 211 In t h i s c o n t ex t , t h e t e r m “ o n l i n e ADR ”
m e t h o d s a s s i s t e d l ar g e l y b y IC T . H o w e v e r , i n a s t r i c t e r s e n s e ,
208
KATCH Ethan & RIFKIN Janet, Online Dispute Resolution: Resolving Conflicts in Cyberspace
(San Francisco: Jossey Bass), 2001, p. 9.
209
RULE Colin, op. cit., p. 44.
210
KAUFMANN-KOHLER Gabrielle and SCHULTZ Thomas, Online Dispute Resolution:
Challenges for Contemporary Justice (Kluwer Law International, The Hague), 2004, p. 5.
211
For instance,”the ABA Task Force on E-Commerce and ADR provides a generic definition of
ODR: ODR is a broad term that encompasses many forms of ADR and court proceedings that
incorporate the use of the internet, websites, e-mail communications, streaming media and other
information technology as part of the dispute resolution process”. See WANG Fangfei Faye, op.
cit., p. 25.
152
internationally to describe different forms of on-line
t r a d i t i o n a l A DR a n d O D R i s t h a t i n s t e a d o f m e e t i n g f a c e t o f a c e ,
t h e p a r t i e s i n t e r a c t o n l i n e . 212 O n l i n e D i s p u t e R e s o l u t i o n i s a n ew
t h e C yb e r - w o r l d ; a b r a n c h o f d i s p u t e r e s o l u t i o n w h i c h d i f f e r s
f r o m o t h e r n o n - j u d i c i a l w a ys , b e c a u s e o f i t s i n n o v a t i v e a n d
n e t w o r k s f o r t h e r e s o l u t i o n o f d i s p u t e s . 213 T h e r e f o r e , i n t h i s
t h e s i s , O DR i s c o n s i d e r e d a s d i s p u t e r e s o l u t i o n o u t s i d e t h e
c o u r t s c a r r i e d o u t b y u s i n g IC T a n d , i n p a r t i c u l a r , In t e r n e t
a p p l i c a t i o n s . 214 A D R a i m s t o r e s o l v e d i s p u t e s o u t o f c o u rt a n d
O D R i s t h e a p p l i c a t i o n o f t e c h n o l o g y t o a c h i e v e t h e s a m e g o a l . 215
they are alternatives to litigation and to state justice, but not all
m e t h o d s a r e o n l i n e A D R ” . 216 Li k e O D R , A D R i s a d e b a t a b l e
c o n c e p t . In E n g l a n d a n d W a l e s , A DR i s c o n s i d e r e d a l l m e t h o d s
212
HANG Q. Lan, Online Dispute Resolution Systems: The Future of Cyberspace Law, Santa
Clara Law Review, vol. 41, 2001, p. 846.
213
CALLIESS Gralf-Peter, Online Dispute Resolution: Consumer Redress in a Global Market
Place, German Law Journal, vol. 7, 2006, p. 647.
214
HÖRNLE Julia, op. cit., p. 75.
215
RULE Colin, op. cit., p. 43.
216
SCHULTZ Thomas, Online Dispute Resolution: an Overview and Selected Issues, United
Nations Economic Commission for Europe Forum on Online Dispute Resolution Geneva, 6-7 June
2002, p. 2
153
d i s p u t e r e s o l u t i o n , e x c l u d i n g a r b i t r a t i o n a n d o t h e r a d v er s a r i a l
p r o c e e d i n g s . S i m i l ar l y t o A D R , i n O DR t h e r e i s a w i d e r an g e o f
t h e s a m e w a y a s A D R m e t h o d s . 217 C o n s e q u e n t l y, a l t h o u g h i n a
f o r m o s t p l at f o r m s . 218 In t h i s t h e s i s , t h e ex a m i n a t i o n o f O D R w i l l
a n d a r b i t r a t i o n , i n t h e i r v i r t u a l r e p r e s en t a t i o n . T h e s e t r a d i t i o n a l
a d a p t e d a c c o r d i n g l y. T h i s v i e w i s a d o p t e d a s m o r e a c c u r a t e l y
p r e f e r a b l e a n d m o r e r e a l i s t i c t o ex am i n e a n d a t t e m p t t o i m p r o v e
o n l i n e A D R m e t h o d s t h a t w i l l b e n e f i t fr o m t h e e x p e r i e n c e o f t h e
e n t i r e A D R m o v e m e n t t h a n t r yi n g t o “ c o m e u p ” w i t h n ew O D R
methods.
H o w e v e r , a l t h o u g h O D R i s b a s e d o n AD R , t h e c o m b i n a t i o n
t r a n s f o r m a t i o n o f t h e u n d e r l yi n g A D R p r o c e s s e s m a k i n g O D R
u n i q u e a n d w i t h e n d l e s s p o s s i b i l i t i e s . 219 T h e u s e o f t h e In t e r n et
217
SCHULTZ Thomas, BONNET Vincent, BOUDAOUD Karima, KAUFMANN-KOHLER
Gabrielle, HARMS Jürgen and LANGER Dirk, op. cit., p. 2.
218
BETANCOURT C. Julia and ZLATANSKA Elina, op. cit., p. 258.
219
“To say that ODR is merely online ADR would similarly underestimate the transformative
power of the technology […] in the same way as the argument that, for all forms of motorized
154
a n d t h e IC T t o o l s i n d i s p u t e r e s o l u t i o n m a n i f e s t l y i n f l u e n c e s t h e
a r b i t r a t i o n ) a n d c h a n g e s t h e f o r m o f c o m m u n i c a t i o n , cr e a t i n g
c o m m u n i c a t i o n s a n d d a t a . 220 T h e f o l l o w i n g c h a p t e r s o f t h i s p a rt
e x a m i n e i n d e p t h al l t h e n e w c a p a b i l i t i e s o f O D R , i n o rd e r t o
t a k e a d v a n t a g e o f t h e m , a s w e l l a s t h e d r a w b a c k s t h a t n e ed t o b e
avoided.
O D R e v o l v e s e x i s t i n g A D R m e t h o d s b y t h e u s e o f IC T
t o o l s “ b a s e d o n t h e a s s u m p t i o n t h at c e r t a i n d i s p u t e s ( a n d
v i a t h e In t e r n e t ” . 221 A D R m e t h o d s a r e a s s i s t e d b y t h e s p e e d a n d
c o n v e n i e n c e o f IC T a n d t h e i n t e r n e t , w h i c h m a k e s t h em b e t t e r
s u i t e d t o t h e n e e d s o f c yb e r s p a c e a n d e s p e c i a l l y e - c o m m e r c e .
v a l u e d i s p u t e s a s s h o w n b y t h e e x a m p l e o f “ C yb e r S e t t l e ” .
transport, the horse that drew the cart has merely been replaced by an engine, but that the
transportation itself has not changed”. See HÖRNLE Julia, op. cit., p. 76.
220
“As ODR services began to roll out, some new wrinkles to the technology emerged. Some of
the mainstays of face-to-face dispute resolution practice did not translate well into the online
environment, and some capabilities of online dispute resolution were entirely new”. See RULE
Colin, op. cit., p. 44.
221
HEUVEL V. D. Esther, op. cit., p. 8.
155
r e g a r d l e s s o f t h e i r o r i g i n ( f r o m t h e o f fl i n e o r t h e v i r t u a l w o r l d )
H o w e v e r , t h e r e a r e t yp e s o f c a s e s t h a t a r e b e t t e r s u i t e d f o r
b e t t e r s u i t e d c a s e s , s u c h a s d i s p u t e s o r i g i n a t i n g i n C yb e r s p a c e
q u e s t i o n s , d i s p u t e s r e l a t i n g t o d o m a i n n a m e s , 222 o r i n t e l l ec t u al
a r b i t r a t i o n i s c o n s i d e r e d h i g h l y s u i t a b l e . 223 T h e p r o t e c t i o n o f
i n t e l l e c t u a l p r o p e r t y i n c yb e r s p a c e c a n n o t s o l e l y r e l y o n c i v i l o r
c r i m i n a l s a n c t i o n s b u t i n s t e a d i t w o u l d b e m o r e e f f i c i en t f o r
p a r t i e s t o c h o o s e n e u t r a l s w h o a r e ex p e r t s a n d k n o w t h e s u b j e c t
t e a c h i n g a j u d g e o r j u r y a b o u t c o m p l ex t e c h n o l o g i c a l i s s u e s a n d
h o p i n g t h e y w i l l g r a s p t h e i s s u e s . 224 T o d a y, O D R i s m a i n l y u s ed
t o r e s o l v e e m p l o ym e n t d i s p u t e s , f a m i l y d i s p u t e s a n d c o m m e r c i a l
H o w e v e r , g e n e r a l l y O D R i s l e s s a p p ro p r i a t e f o r f i e l d s “w h e r e
legal constraints are higher, such as family law and taxation law,
222
See infra at “ODR in action”.
223
“The development of digital communication has spawned a number of issues for intellectual
property owners. With the use of new technologies, particularly the Internet, it has become much
easier for intellectual property pirates to infringe upon intellectual property rights. For instance,
copyrights in songs and movies are constantly infringed with their dissemination on file-swapping
platforms such as Kazaa. Similarly, unauthorized hyperlinking, framing, and meta-tagging on the
Internet could also violate copyright and trademark rights”. See SHAH Aashit, Using ADR to
Solve Online Disputes, Richmond Journal of Law & Technology, Vol. 10, Is. 3, 2004, pp. 4, 5.
224
VICTORIO M. Richard, op. cit., pp. 21- 23
225
CORTES Pablo, op. cit., p. 2
156
because states are more sensitive to interventions in their
s o v e r e i g n t y i n t h e s e f i e l d s ” . 226 F u r t h e r m o r e , O D R m e t h o d s a r e
b e t t e r s u i t e d f o r m o n e t a r y d i s p u t e s s u c h a s c r e d i t ca r d a n d
o f r i g h t s , b e c a u s e o f t h e n a t u r e o f t h e c yb e r s p a c e w h i c h i n v o l v e s
w i t h n o p r i o r r e l a t i o n s h i p . In m o n e t a r y d i s p u t e s O DR c a n
p r o v i d e a f a s t a n d ea s y r e s o l u t i o n a s i s e v i d e n t b y t h e s u c c e s s f u l
“ C yb e r s e t t l e ” . F o r d i s p u t es t h a t a r e p u r e l y e c o n o m i c s u c h a s i n
i n s u r a n c e c l a i m s , co n s t r u c t i o n d e f e c t d i s p u t es , a n d e - c o m m e r c e ,
O D R c a n h e l p t h e b a r g a i n i n g p r o c e s s m o v e s w i ft l y a n d q u i c k l y,
o f IC T t o o l s a n d m e t h o d s c a n b e u t i l i z e d b y b u s i n e s s e s a n d
d i s p u t es a r e u s u a l l y o f l o w v a l u e a n d O D R a l l o w s f o r t h e i r
p r o p o r t i o n al l y l o w . F u r t h e r m o r e , i n t h e s e c a s e s t h e f a c t t h a t t h e
dispute arose over the internet suggests that the parties are
a l r e a d y f a m i l i a r w i t h t h e p e c u l i a r i t i es o f t h e c yb e r s p a c e a n d
h a v e a l l t h e n e c e s s a r y t o o l s t o r e s o l v e t h e d i s p u t e o v er t h e
226
EU study on the Legal analysis of a Single Market for the Information Society, op. cit., p. 13.
157
internet. ODR makes it possible to resolve lesser-value and
o t h e r w i s e , p r o v i d i n g a c c e s s t o j u s t i c e t o p a r t i e s t h at w o u l d n o t
ODR is not just an alternative but often the only viable way to
r e s o l v e d i s p u t e s . E- c o m m e r c e d i s p u t e s a r i s e o u t o f c o m m e r c i a l
( B 2 B ) , o r b e t w e e n p r i v a t e i n d i v i d u al s i . e . c o n s u m e r s (C 2 C ) , o r
f i n a l l y b e t w e e n a b u s i n e s s a n d a c o n s u m e r ( B 2 C ) . 227
o f d i s p u t e s . H o w e v e r , w h e n i t i s d e em e d n e c e s s a r y t h e t h e s i s
227
“An example of an individual versus individual online dispute is when the buyer bids the
highest price for an item auctioned by the seller through an online auction venue such as eBay. An
online business may also find itself in a dispute with another online business. In one case, eBay
sued another online auction site for trespass because the rival web site sent an automated query
program, or ‘robot’, to search eBay's web site for bidding prices. This burdened eBay's computer
network since the excess traffic to its web site by the robots took up valuable capacity”. See
CORTES Pablo, (2010) Online Dispute Resolution for Consumers, in WAHAB Mohamed S.
Abdel, KATSH Ethan & RAINEY Daniel, Online Dispute Resolution: Theory and Practice - A
Treatise on Technology and Dispute Resolution, (Eleven International Publishing), 2012, p. 151.
Finally, “a B2C dispute may arise when an individual conducts business with an online merchant,
for example when a buyer purchases a license to use software from a merchant through merchant's
web site”. HANG Q. Lan, op. cit., pp. 4- 6.
158
the parties creates the need for protection of the consumer who
is the weaker party and where ODR has a dual role of resolving
F i n a l l y, i n o r d e r t o c o m p l e t e t h e d ef i n i t i o n o f O D R , a
m o r e a c u t e d e s c r i p t i o n o f i t s o n l i n e n a t u r e m u s t b e p r o v i d e d . 228
T o d a y, O D R i s n o t j u s t a f o r m o n a w e b s i t e o r s i m p l y t h e u s e o f
e - m a i l . O D R i s u n d e r s t o o d a s t h e u s e o f s o p h i s t i c a t e d s o ft w a r e
o n l i n e t h e m a j o r p ar t o f t h e d i s p u t e r es o l u t i o n p ro c e d u r e , f r o m
n e u t r a l p a r t y, t h e p r e s e n t a t i o n a n d e v a l u a t i o n o f e v i d e n ce , t h e
p l a c e m o s t l y i n t h e o n l i n e e n v i r o n m en t w i t h t h e a s s i s t an c e o f
IC T , b u t a t t h e s a m e t i m e r e s p e c t s d u e p r o c e s s .
228
“ODR can involve automated negotiation processes administered by a computer, or it can
provide world-class experts to administer binding arbitration procedures. ODR systems can be
legalistic and precedent-based, like the courts, or flexible exception-handling mechanisms to act as
an extension to customer service efforts. ODR can be a multimillion dollar customer relationship
management system or a $75 website set up to aid a mediator with the administration of a small
case”. See RULE Colin, op. cit., p. 44.
159
It would be difficult to establish a clear borderline
b e t w e e n A D R a n d O D R . 229 A D R p r o c e s s e s d o n o t e x c l u d e t h e u s e
o f In t e r n e t c o m m u n i c a t i o n s s u c h a s e m a i l s ; i n t h e s a m e m a n n e r
i n c l u d e s m a i n l y t h o s e m e t h o d s i n w h i c h t h e u s e o f IC T h a s a
M e s s a g i n g ( a v a r i a n t o n e m a i l t h a t a l l o w s s yn c h r o n o u s o n l i n e
c h a t ) , O n l i n e C h at ( a s yn c h r o n o u s , t ex t - b a s e d ex c h an g e o f
boards, an a s yn c h r o n o u s , t ex t u a l exchange of i n f o rm a t i o n
i n f o r m a t i o n ) ” . 231
229
HÖRNLE Julia, Online Dispute Resolution: the Emperor's New Clothes, International Review
of Law, Computers & Technology, vol. 17, 2003, p. 27.
230
KAUFMANN-KOHLER Gabrielle and SCHULTZ Thomas, op. cit., p. 5.
231
RAINES S. Susan and TYLER C. Melissa, From e-bay to Eternity: Advances in Online
Dispute Resolution, University of. Melbourne Legal Studies Research Paper, 2006, p. 4.
160
Section 2: Technology as a fourth party and the various ICT
tools
In O D R t h e r e s o l u t i o n o f t h e d i s p u t e i s p e r f o r m e d n o t o n l y
b y p h ys i c a l p e r s o n s , b u t a l s o “ b y c o m p u t e r s a n d s o f t w a r e , w h i c h
d i s p u t e ” . 232 In t h e o f f l i n e w o r l d , d i s p u t e r e s o l u t i o n i s f a c e- t o -
f a c e ; a l l c o m m u n i ca t i o n h a p p e n s b y v o i c e , e i t h e r i n t h e s a m e
r o o m o r o v e r t h e t e l e p h o n e a n d t h e f e a t u r e s o f t h e p l ac e o f
m e e t i n g a r e o f l e s s e r i m p o rt a n c e . 233 O n t h e c o n t r a r y, i n t h e
v i r t u a l w o rl d t h e t o o l s u s e d t o c o m m u n i c a t e s u b s t a n t i a l l y s h a p e
u n d e r s t o o d b y t h e p a r t i e s . 234 T h e i n f l u e n c e o f t e c h n o l o g y c a n b e
s e e n b y t h e f a c t t h a t IC T a s s i s t a n c e h a s b e e n c h a r a c t e r i z e d a s
t r a d i t i o n a l t h r e e s i d e m o d e l , c o m p r i s ed b y t h e t w o p a r t i e s w h o
a r e i n v o l v e d i n a d i s p u t e , a n d t h e t h i r d n e u t r a l p a r t y. 235
232
KATCH Ethan & RIFKIN Janet, op. cit., p. 93.
233
“Occasionally one side or the other will submit a brief, such as in arbitration, but the vast
majority of communications are voice-based. […] the neutral can do little more than arrange the
room and table as everyone liked and ask questions to help the parties make progress”. See RULE
Colin, op. cit., pp. 45, 46.
234
CORTES Pablo, op. cit., p. 85.
235
WAHAB S. A. Mohamed, Globalization and ODR: Dynamics of change in e-commerce
dispute settlement, International Journal of Law and Information Technology, vol. 12, 2004, p.
123.
161
The fourth party participates in the resolution procedure in
d i f f e r e n t w a ys ; a t t i m e s i t c a n s u b s t i t u t e t h e t h i r d p a r t y, o r i t i s
f r e q u e n t l y u s e d b y t h e t h i r d p a r t y i n o r d e r t o f a c i l i t at e t h e
p r o c e s s i n g e n e r a l . 236 S o m e o f t h e f o r m s o f a s s i s t a n c e t h a t t h e
a u t o m a t i c r e s p o n s es t o k e e p p a r t i e s i n f o r m e d , s t o p p i n g b a d
l a n g u a g e a n d s c h e d u l i n g m e e t i n g s . Ot h e r s m o r e c o m p l ex m a y
t o p r i o r i t i s e , a n d f o s t e r i n g b r a i n - s t o rm i n g . 237 F o r i n s t a n c e , i n
p r e s e n t a t i o n o f i s s u e s a n d s t a t e m e n t s a l l o w s t h e a r b i t r at o r t o
d e t e r m i n e , a l m o s t i m m e d i a t e l y, t h e e x t e n t o f t h e d i s a g r e e m e n t
b e t w e e n t h e p a r t i e s . 238
T h e r o l e o f t h e f o r t h p a r t y i s n o t a l w a ys l i m i t e d t o a m e re
a s s i s t a n t , s i n c e t ec h n o l o g y a l s o s t r o n g l y i n f l u e n c e s t h e w a y
c o m m u n i c a t i o n s t ak e p l a c e a n d e v e n f u r t h e r i n s o m e f o r m s o f
O D R t h e f o u r t h p ar t y c a n d i s p l a c e t h e t h i r d o n e t o s i g n i f i c a n t
236
GAITENBY Alan, The Fourth Party Rises: Evolving Environments of Online Dispute
Resolution, The University of Toledo Law Review, vol. 38, 2006, p. 372.
237
KATCH Ethan & RIFKIN Janet, op. cit., p. 129
238
LODDER R. Arno and ZELEZNIKOW John, op. cit., p. 79
162
e x t e n d . 239 T h e t r a n s f o r m a t i v e p o w e r o f t h e f o u r t h p a r t y c a n a l s o
s h a p e t h e u n d e r l yi n g A D R p r o c e s s a n d c r e a t e n e w d i s p u t e
h a s n o e q u i v a l e n t i n t h e o f f l i n e w o r l d . 240 T h e f o u r t h p a r t y a d d s
arbitrator, since the third party will gradually rel y more and
e x p e r i e n c e a n d t h e r e a l i z a t i o n t h a t ce r t a i n p a r t s o f h o w t h i r d
t o o l s t h at a l l o w t o c h a n g e h o w a n d w h e r e i n t e r a c t i o n s w i t h
p a r t i e s m i g h t t a k e p l a c e . 241
S i m i l a r l y t o A D R , w h e r e l a w ye r s i n i t i a l l y q u e s t i o n e d t h e
n e e d f o r a t h i r d n e u t r a l p a r t y t o a s s i s t t h e d i s p u t a n t s wi t h t h e
s p e c i f i c a l l y t h e u s e o f IC T t o o l s w i t h o n e o f t h e i r m a i n c o n c e r n s
w h i c h w o u l d n o t a l l o w t h e d e v e l o p m e n t o f O D R . 242 H o w e v e r , t h e
163
are also cross border and low value disputes, ODR may be the
many d i s p u t e r e s o l u t i o n p r a c t i t i o n e rs t o n o w r e c o g n i z e t h e
v a l u e o f t h e In t e r n e t a n d u s e i t o n a d a y- t o - d a y b a s i s , e s p e c i a l l y
b e c o m e s l e s s a n d l e s s a c c u r a t e , s i n c e t h e d e v e l o p m e n t o f IC T
t o p e r f o r m v i d e o - ca l l s f r o m a l l n e w g e n e r a t i o n c e l l u l a r p h o n e s
i n f o r m a t i o n , e v e n t h e i r f e e l i n g s a n d e m o t i o n s . 244 T h e e l e c t r o n i c
i n s t r u m e n t s f a c i l i t at e t h e t r a n s m i s s i o n o f i n f o rm a t i o n a n d t h u s
p r o m o t e t h e c o m m u n i c a t i o n b et w e e n t h e t w o p a r t i e s . R e l i ab i l i t y
a n d s p e e d a d d t o t h e i r v a l u e . 245 T h e u s e o f m o d e r n t e c h n o l o g i c a l
m e d i a p l a ys a r o l e o f p r i m a r y s i g n i f i c a n c e i n t h e O D R p r o c e s s
c o n t r a c t u a l f r e e d o m a n d t h e f u n d am e n t a l p r i n c i p l e o f p a r t y
a u t o n o m y, t h e p a r t i e s h a v e t h e a b i l i t y a n d t h e f r e e d o m t o d e c i d e
243
SYME David, Keeping Pace: On-line Technology and ADR Services, Conflict Resolution
Quarterly, vol. 23, 2006, p. 345.
244
CORTES Pablo, op. cit., pp. 83, 84.
245
GIBBONS Llewellyn Joseph, Creating a Market for Justice: A Market Incentive Solution to
Regulating the Playing Field : Judicial Deference, Judicial Review, Due Process, and Fair Play
in Online Consumer Arbitration, North-western Journal of International Law & Business, vol.
23, 2002, pp. 1 , 4.
164
w h i c h w i l l b e e x c l u d e d . 246 A n O D R p l a t f o r m m a y e m p l o y v a r i o u s
e a c h p a r t i c u l a r d i s p u t e a n d O D R m e t h o d . 247 S o m e o f t h e s e t o o l s
i n c l u d e t h e e - m a i l , c h a t a n d v i d e o c o n f er e n c e .
O n e o f t h e m o s t c o m m o n l y u s e d IC T t o o l s i n O DR i s t h e
u s e o f e - m a i l f o r c o m m u n i c a t i o n . 248 It i s a n e l e c t r o n i c m ai l
s ys t e m t h r o u g h w h i c h p a r t i e s c a n ex c h a n g e a l l k i n d s o f d at a . T h e
In t e r n e t , t h e m o s t c o m m o n a n d c l e a r l y e a s i e s t f o r m o f e l e c t r o n i c
c o m m u n i c a t i o n ; i t s a v e s m o n e y, s i n c e t h e c o s t o f s e n d i n g
p r o v i d e s f a s t c o m m u n i c a t i o n , c o m p ar e d t o t r a d i t i o n a l l e t t e r s ,
246
DUMORTIER Jos and VAN EECKE Patrick, The European Draft Directive on a common
Framework For Electronic Signatures , The Computer Law & Security Report, vol. 15, 1999, p.
2.
247
RULE Colin, op. cit., p. 46
248
CHAFFEY Dave, Total E-mail Marketing, (Taylor & Francis), 2003, pp. 86-123.
165
because messages reach millions of people around the world in
seconds, i.e. in real time virtually zero. E-mail is the most basic
IC T t o o l , e a s y t o u s e , p e r s o n a l i z e d , i t h a s a f a s t d o w n l o a d
p r o c e s s a n d i t d o e s n o t r e q u i r e b a n d wi d t h s i n c e m o s t m es s a g e s
o f b e i n g a n a s yn c h r o n o u s c o m m u n i ca t i o n w h i c h e v e r yo n e i s
f a m i l i a r w i t h , i t i s v e r y f l e x i b l e f o r e v e r y t yp e o f d i s p u t e a n d
e n a b l e s t h e ex c h a n g e o f c o m p l ex w r i t t e n i n f o rm a t i o n . W h e r e a s
i s m o s t l y i n - p e r s o n o r o v e r - t h e - t e l ep h o n e s yn c h r o n o u s v o i c e
t h e o p t i o n o f a s yn c h r o n o u s c o m m u n i c at i o n . 249
p a r t y a n d f o r t h e l a t t e r t o r e p l y. S yn c h r o n o u s c o m m u n i c a t i o n i n
c o m m u n i c a t i o n t h r o u g h a u d i o o r v i d e o c o n f e r e n c e . A s yn c h r o n o u s
249
“Synchronous is when you and the other party are communicating in “real-time,” and you are
expected to respond to the other side as soon as they finish making their comments. Phone and
face-to-face interactions are both synchronous communications. Asynchronous communication is
when you and the other party are not communicating at the same time. When you get a message
from the other side you are not expected to respond immediately. Sending letters back and forth
through the mail is asynchronous, and posting messages on an online bulletin board or discussion
forum is also asynchronous”. See RULE Colin, op. cit., pp. 47, 48.
166
communication is when the parties do not communicate at the
s a m e t i m e , o n e p a r t y’ s m e s s a g e d o e s n o t r e a c h t h e o t h e r
m e s s a g e s . A s yn c h r o n o u s c o m m u n i c a t i o n p r o v i d e s p a r t i es w i t h
m o r e t i m e a n d s p a c e t o r e a d a m e s s a g e , t o u n d e r s t an d i t s
a c c o u n t a l s o s e r v e s a s a s t o r a g e f a c i l i t y. H o w e v e r , i t m a y s l o w
d o w n t h e r h yt h m o f t h e c o m m u n i c a t i o n a n d m a k e i t m o r e
d i f f i c u l t t o d i s c o v e r t h e r o o t o f t h e p r o b l e m . Al t h o u g h t h e r e a r e
b e n e f i t s o f s yn c h r o n o u s a s w el l a s a s yn c h r o n o u s c o m m u n i c a t i o n
t h e n a t u r e o f t h e d i s p u t e a n d t h e p a r t i es i n v o l v e d , h o w e v e r, b o t h
f o r m s o f c o m m u n i c a t i o n c a n b e c o m b i n e d ; a n ex a m p l e o f a
p r o v i d e r s u p p o r t i n g b o t h i s t h e It a l i a n p r o v i d e r “ R i s o l v i o n l i n e ” ,
w h i c h o f f e r s b o t h e - m a i l a n d c h a t . 250
c o m p l e m e n t s O D R a s w e l l a s A D R f o r p r o v i d i n g i n f o rm a t i o n ,
s c h e d u l i n g , b r i e f c o n t a c t s , e t c . It s m a i n d i s a d v a n t a g e i s t h a t e -
m a i l s i n m o s t c a s e s a r e n o t e n c r yp t e d , w h i c h w o u l d a l l o w t h i r d
250
LODDER R. Arno and ZELEZNIKOW John, op. cit., pp. 73, 74.
167
c o m m u n i c a t i o n c a n b e t a c k l e d t h r o u g h t h e u s e o f e n c r yp t i o n
t e c h n o l o g y (c r yp t o g r a p h y) . 251 U n f o r t u n a t e l y, t h e a s s e s s m e n t o f
s u c h c o m p l ex i s s u es r e q u i r e s s p e c i f i c t e c h n i c a l k n o w l e d g e a n d
u s u a l l y n o t e a s i l y a c c e s s i b l e t o t h e a v e r a g e u s e r . 252 H o w e v e r , a s
seen in the next part of this thesis, ODR providers can use
C h a t a n d In s t a n t M e s s a g i n g ( IM ) a r e w a ys t o d i r e c t l y
W e b s i t e c a l l e d “ ch a t r o o m ” b y t yp i n g t e x t m e s s a g e s t o e a c h
o t h e r t h r o u g h a s o ft w a r e a p p l i c a t i o n i n r e a l - t i m e . C h at an d IM
d i f f e r f r o m e - m a i l i n t h a t t h e t ex t ex ch a n g e i s f a s t e r . A l t h o u g h
C h a t a n d In s t a n t M e s s a g i n g a r e v e r y s i m i l a r m e t h o d s t h ei r m a i n
d i f f e r e n c e i s t h a t c h a t e x c h a n g e s a r e m o r e s yn c h r o n o u s t h a n IM
251
“The word cryptography is composite word. The first component is ‘crypto’ and the second
component is ‘writing’. So then, cryptography means hide what I write. Cryptography is the
science or art of concealment of writing from unwanted readers. Cryptography was originally the
art form the secrets of which knew only a select few. The history of cryptography begins around
4000 B.C. in ancient Egypt and in ancient Greece according to references by the historian
Polybius. The first encrypted text dates in 1500 B.C. Babylon associated with the preparation
instructions for the manufacture of enamel-painted clay pots. The earliest known encryption
device is the ‘baton’ which was used by the Spartans”. As seen at Encyclopaedia Papyrus Larousse
Britannica, vol. 36.
“The most striking development in the history of cryptography came in 1976 when Diffie and
Hellman published ‘New directions in cryptography’. In 1978 Rivest, Shamir and Adleman
discovered the first practical application of the proposed scheme. It was called the RSA scheme
and was based on a hard mathematical problem, namely the difficulty of factoring large integers
which ensures confidentiality in digital communications so the message can be read only by the
addressee, as in the intermediate stages, the message appears with unintelligible characters, i.e.
unreadable”. See KUMAR Anil, Network Security and Cryptography, International Journal for
Scientific Research & Development, vol. 2, 2014, p. 845.
252
AALBERTS Babette and VAN DER HOF Simone, Digital Signature Blindness: Analysis of
Legislative Approaches toward Electronic Authentication, (Kluwer), 2000, p. 16.
168
exchanges because they appear in a single “window” contrary to
IM w h e r e t h e r e a r e s e p a r a t e “ w i n d o w s ” t h a t u s u a l l y p o p - o u t
c o m m u n i c a t i o n s . On e t h e o n e h a n d , t h i s p r o v i d e s p a r t i es w i t h
m a i n d i s a d v a n t a g e o f C h a t a n d In s t a n t M e s s a g i n g i s t h a t i t i s a
v e r y t e x t u a l m e t h o d t o r e s o l v e d i s p u t e s a n d “ l a c k s n o n -v e r b a l
c o m m u n i c a t i o n s u ch a s p o s t u r e s , f a c i a l e x p r e s s i o n s , g e s t u re s a n d
t o n e o f v o i c e ” , 253 a f a c t w h i c h m a k e s i t m o r e d i f f i c u l t f o r t h e
a b l e t o e x p r e s s e f f i c i e n t l y b y w r i t i n g a n d o t h e r s w h o t yp e s l o w e r
w i l l q u i c k l y g e t f r u s t r a t e d . 254 A n o t h e r p ro b l e m w i t h c h a t a n d IM
is that parties tend to write fast and short messages, which may
b o d y l a n g u a g e , v o i c e i n f l e c t i o n , f a c i a l ex p r e s s i o n s , e t c . M o s t
253
KATCH Ethan & RIFKIN Janet, op. cit., p. 141.
254
For instance, “If one side types thirty words per minute and the other types ninety words per
minute the latter party can get in three words for every one of the other side. There will
undoubtedly be delays as one side or the other makes their points, but the thirty-words-per-minute
party will probably get frustrated as he struggles to keep up with all the points coming from the
other side. This frustration will likely degrade the quality of the discussion as well, as the parties
become more focused on getting their points in than thinking through what they really want to
say”. See RULE Colin, op. cit., p. 52
169
a s , “ M S N M e s s e n g e r ” , “ Y a h o o ! ” , “ S k yp e ” a n d “ A p p l e ' s i C h a t ” ,
now allow voice messaging, file sharing and even video based
c o m m u n i c a t i o n s . 255
c o m p l e t e l y s yn c h r o n o u s m e a n s o f c o m m u n i c a t i o n t h at a l l o w s a
v o i c e b a s e d d i a l o g u e b e t w e e n m u l t i p l e p a r t i e s . V i d e o c o n f er e n c e
i s a l i v e c o n n e c t i o n b e t w e e n p e o p l e u s u a l l y i n v o l v i n g a u d i o , t ex t
w e l l a s d o c u m e n t -p r e s e n t a t i o n a n d ap p l i c a t i o n - s h a r i n g f e a t u r e ;
o f w i t n e s s e s . 256 T h e m a i n a d v a n t a g e i s t h a t t h e p a r t i e s , t h e ODR
255
HILL Richard, Online arbitration: issues and solutions, Arbitration International, vol. 15, 1999,
p. 199.
256
“Video has been considered the ultimate ODR technology. Once parties can see each other and
the neutral, some observers have reasoned, little incentive remains to ever bother getting together
face to-face”. See RULE Colin, op. cit., p. 54.
170
practitioners or the witnesses do not have to travel, thus saving
t i m e a n d m o n e y. 257 T h e o n l y n e c e s s a r y r e q u i r e m e n t s t o p e r f o r m a
p r o v i d e r s s u c h a s S k yp e . c o m 258 a n d t h e u s e o f a w e b c a m , wh i ch
n o w a d a ys i s p r o v i d e d a l m o s t a s a s t a n d a r d a c c e s s o r y w i t h a n y
t h e r e a r e s o m e c o n c e r n s a b o u t t h e q u al i t y o f t h e v i d e o l i n k a n d
m e a n s ; 259 t h e s e i s s u e s b e c o m e l e s s a n d l e s s c o n c e r n i n g e a c h d a y
V i d e o c o n f e r e n c e p r o v i d e s s e v e r a l a d v an t a g e s s u c h a s t h e a b i l i t y
p r e v e n t i n g o n e o f t h e m t o d o m i n a t e t h e o t h e r . 260 C o n d u c t i n g
257
HOFFMANN A. David, The Future of ADR, Professionalization, Spirituality and the Internet,
Dispute Resolution Magazine, vol.14, 2008, p. 6.
258
The last 5 years Skype has become one of the most commonly used computer applications in
the world, to an extend which led to coined phrases such as “I will Skype you” or “Skype you
later”.
259
HÖRNLE Julia, JISC Legal Briefing Paper: Online Dispute Resolution, 2004, p. 10 available
at www.jisclegal.ac.uk
260
MOEVES S. Amy and MOEVES C. Scott, op. cit., pp. 19-21.
171
o r m o r e c o m p l ex o n e s s u c h a s t h o s e r e l a t e d t o f a m i l y l a w , r a t h e r
t h a n l o w v a l u e c o n s u m e r o r f i n a n ci a l d i s p u t e s , w h e re l e s s
c o m p l ex t o o l s s u ch a s t h e e m a i l m ay b e e n o u g h . 261 H o w e v e r,
p r e s e n t l y i t s e e m s t h a t O D R d e v el o p m e n t t e n d s t o i n c o r p o r a t e
a u d i o a n d v i d e o c o n fe r e n c i n g w i t h t ex t u a l c o m m u n i c a t i o n s .
M i n o r c o n c e r n s h a v e b e e n e x p r e s s e d a b o u t w h e t h e r v i rt u a l
that the parties are not really in the same room may result in
c o n s t r u c t i v e r e l a t i o n s h i p b e t w e e n t h em . F o r e x a m p l e , d u r i n g a
l o n g t e l e c o n f e r e n c e p r o b l e m s m a y a r i s e s u c h a s t h e d i f f i cu l t y t o
concern lies around the fact that the use of such a tool would be
i n a p p r o p r i a t e a n d ev e n u n f a i r t o p a r t i e s w h o l a c k t h e n e ce s s a r y
e x p e r i e n c e i n t h i s t yp e o f t e c h n o l o g y. A s a t i s f a c t o r y a n s w e r t o
a c t u a l p r o c e e d i n g s t o f a m i l i a r i s e t h e p ar t i e s w i t h t h e p ro c e d u r e .
e x p o n e n t i a l a d v a n ce o f IC T , w h i c h i s a p p a r e n t f r o m t h e a d v a n c e
o f c o m p u t e r s a n d In t e r n e t c o n n e c t i o n s i n t h e l a s t d e c a d e , a r e
261
SCHULTZ Thomas, Information Technology and Arbitration: A Practitioner’s Guide, (The
Netherlands: Kluwer Law International), 2006, pp. 168-169.
172
t e c h n o l o g y. 262 N e w IC T t o o l s m a y b e a v a i l a b l e f o r O D R i n t h e
i m a g e s a n d A I a n d IC T w i l l b e c o m e s m a r t e r , s m a l l e r , s a f e r ,
f a s t e r , a l w a ys c o n n e c t e d a n d e a s i e r t o u s e , w i t h c o n t e n t m o v i n g
t o t h r e e d i m e n s i o n al m u l t i m e d i a f o r m at s ” . 263 A l r e a d y, w h a t w as
s e e n a s s c i e n c e f i c t i o n b e f o r e t e n ye a r s s e a m s t o d a y a n e v e r yd a y
r e a l i t y, a s u s e r s c a n m a k e v i d e o - c a l l s a n d a l m o s t e v e ryt h i n g ,
w h i c h c o u l d f o rm e r l y b e d o n e o n l y w i t h t h e u s e o f p er s o n a l
c o m p u t e r s , f r o m t h e i r h a n d h e l d d e v i c es a n d t h e n e w g e n e r a t i o n
m o b i l e p h o n e s . 264
A l t h o u g h t h e u s e o f e l e c t r o n i c m e d i a i s r e a l l y a n o v e l t y,
t h e i r a p p l i c a t i o n i n p r a c t i c e m a y c r e a t e s o m e d i f f i c u l t i e s . 265 T h e
m a n n e r , a c t i o n s t h at c o u l d j e o p a r d i z e t h e O D R p r o c e s s a n d m a k e
i t d e p e n d a n t o n t h e q u a l i t y o f t h e s o f t w a r e . 266 T h i s i m p l i e s t h at
u s i n g t h e a d v a n t ag e s o f e l e c t r o n i c c o m m e r c e a n d e l e c t r o n i c
262
KATSH Ethan and WING Leah, Ten Years of Online Dispute Resolution (ODR): Looking at
the Past and Constructing the Future, University of Toledo Law Review, vol. 38, 2006, p. 27.
263
COM (2005) 229 final, Communication from the Commission to the Council, European
Parliament, the European Economic and Social Committee and the Committee of the Regions,
i2010 – A European Information Society for Growth and Employment, 3.
264
“If wireless access becomes the norm, people may have the ability to engage in dispute
resolution procedures on their handheld devices or cellular phones”. RULE Colin, op. cit., p. 300.
265
STYLIANOU Paul, Online Dispute Resolution: The Case for a Treaty Between the United
States and the European Union in Resolving Gross- Border E-Commerce Disputes, Syracuse
Journal
of International Law and Commerce, vol. 36, 2008, pp. 117, 124.
266
KATSH Ethan and WING Leah, op. cit., p. 30.
173
c o m m u n i c a t i o n t o t h e m ax i m u m ex t en t c a n b e c h a l l e n g i n g . 267
c o n t r i b u t e t o t h e ev o l u t i o n o f A D R , b u t p r o v i d e d t h a t t h e m a i n
r o l e i s t o f a c i l i t a t e. 268 B u t , i t s e e m s m o r e l o g i c a l t o a r g u e t h at
t h e u s e o f e l e c t r o n i c m e a n s i n t h e p ro c e s s o f O D R c a n p r o v e
r e q u i r e m e n t s , u p h o l d t h e i n t e g r i t y o f c o m m u n i c a t i o n s , re s p e c t
c o m m u n i c a t i o n o f re l e v a n t p a r t i e s , w i l l b e h el d ; i n s h o r t , IC T
tools are valuable when used in the right way and in appropriate
s p e c i f i c s o f t h e d i s p u t e . 271 T h e r e f o r e , O D R p r o v i d e r s a n d t h i rd
p a r t y n e u t r a l s m u s t b e a w a r e o f t h e v a r i o u s IC T t o o l s , t h e
267
For instance, “a difficulty in the growth of ODR is to devise technology which would be
compatible between different users and providers. This is important when ODR users may need to
store and exchange evidence and other documents. To such end there are ongoing efforts to
develop ODR-XML (Exchange Markup Language), which is a variant of XML that enables
information exchange among ODR systems, providing a standardized system”. CORTES Pablo,
op. cit., pp. 83, 84.
268
HILL Richard, op. cit., p. 199.
269
LOPEZ-TARRUELLA Aurelio, A European community regulatory framework for electronic
commerce, Common Market Law Review, vol. 38, 2001, pp. 1337, 1339.
270
WAHAB S. A. Mohamed, Does technology emasculate trust? Confidentiality and security
concerns in online arbitration, International Court of Arbitration Bulletin Special Supplement on
Using Technology to Resolve Business Disputes, 2004, p. 43.
271
SYME David, op. cit., p. 346.
174
entails, in order to apply the tools most appropriate for each
dispute.
S e c t i o n 3 : O D R f o rms
m e c h a n i s m s , b a s i c al l y a n y m e t h o d t h a t r e s o l v e s d i s p u t e s t h r o u g h
t h e u s e o f IC T t o o l s a n d p a r t i c u l a r l y t h e i n t e r n e t . In t h i s s e n s e
p r o c e s s t h a t u s e s IC T a n d t h a t m a y b e b o r n o u t o f p u b l i c o f
p r i v a t e i n i t i a t i v e s . 272 T h e r e f o r e , O D R c a n b e d i v i d e d t o s u i
which includes mainly online ADR. This thesis adopts the latter
o f t h e t w o d i s t i n ct i o n s . A s i n t r a d i t i o n a l A D R , O D R s e r v i c e s
p r o v i d e a g a m u t o f A D R p o s s i b i l i t i e s , fr o m d i r e c t n e g o t i a t i o n t o
b i n d i n g a r b i t r a t i o n . 273 H o w e v e r , t h e s t a n d a r d t yp o l o g y o f ODR
272
CORTES Pablo, op. cit., p. 54.
273
RULE Colin, op. cit., p. 44.
175
a s s i s t e d n e g o t i a t i o n , o n l i n e m e d i at i o n a n d o n l i n e a r b i t r a t i o n . 274
T h i s i s b e c a u s e t h es e m e t h o d s a r e t h e m o s t c o m m o n l y u s e d a n d
p r e f e r r e d b y O D R p r o v i d e r s . B u t , a l s o b e c a u s e a n O DR s ys t e m
b e t w e e n c o n s e n s u a l a n d b i n d i n g f o r m s o f O D R . Th i s d i s t i n c t i o n
o n l i n e n e g o t i a t i o n , o n l i n e m e d i at i o n a n d n o n - b i n d i n g a r b i t r a t i o n
m a y b e m o r e o r l e s s s u i t a b l e f o r i t s r e s o l u t i o n ; f o r ex a m p l e f o r
s a m e c a n n o t b e s a i d f o r m o r e c o m p l e x d i s p u t es , s u c h a s d i s p u t e s
r e l a t i n g t o p a r t i a l o r t o t a l l i a b i l i t y, o r w h e n t h e d i s p u t e d fa c t i s
274
SCHULTZ Thomas, The Roles of Dispute Settlement and ODR, in A. Ingen-Housz, ADR in
Business: Practice and Issues across Countries and Cultures, Vol. II (Kluwer Law International
BV: The Netherlands), 2011, p. 138.
275
“ODR as online ADR will be more effective than new specific forms of dispute resolution once
it can benefit from the legal instruments developed for ADR, which may only be a question of
time. And ODR may evolve in the direction of ADR, because just as lawyers have conquered the
ADR movement, injecting formalities drawn from their judicial experience, they are likely to
conquer ODR, injecting formalities drawn from their ADR experience”. See SCHULTZ Thomas,
Online Dispute Resolution: an Overview and Selected Issues, op. cit., pp. 3, 4
176
t h e p a ym e n t o f g o o d s o r s e r v i c e s . 276 T h i s s e c t i o n ex a m i n e s t h e
b a s i c c h a r a c t e r i s t i cs o f e a c h o f t h e s e m e t h o d s .
A. Online Negotiation
In t h e a g e o f t h e i n t e r n e t a n d e - c o m m e r c e , n e g o t i a t i o n h a s
moved off the court corridors and law firms on to the Web,
i n t e g r a t e d O D R p r o g r a m s 278 n o w a d d a n e g o t i a t i o n s t a g e b e f o re
t h e m e d i a t i o n o r a rb i t r a t i o n p r o c e s s b eg i n s . 279
276
CORTES Pablo, op. cit., pp. 163, 164
277
BETANCOURT C. Julia and ZLATANSKA Elina, op. cit., p. 259.
278
For instance Online Resolution offers blind bidding as a standard feature in its ‘Resolution
Room’ process”. See www.onlineResolution.com
279
BENYEKHLEF Karim and GELINAS Fabien, op. cit., pp. 44, 45.
177
In O D R , n e g o t i a t i o n c a n b e a t r a d i t i o n a l p r o c e s s t h a t u s e s
t e c h n o l o g y a s t h e c o m m u n i c a t i o n m ed i u m , b u t a l s o t h e u s e o f
f o r m s ; t h a t o f a u t o m a t e d n e g o t i a t i o n (a l s o c a l l e d b l i n d - b i d d i n g
o r S i n g l e V a r i a b l e B l i n d - B i d d i n g P r o ce s s 281) a n d t h at o f a s s i s t ed
n e g o t i a t i o n ( a l s o ca l l e d f a c i l i t a t e d n e g o t i a t i o n ) . T h e c o m m o n
p o i n t i n b o t h f o r m s o f n e g o t i a t i o n i s t h a t n o p h ys i c a l t h i r d - p a r t y
A u t o m a t e d n e g o t i a t i o n d o e s n o t h i g h l y r e s e m b l e i t s A DR
e q u i v a l e n t . T h e n eg o t i a t i o n p r o c e s s i n v o l v e s t h e s u b m i s s i o n o f
o f f e r s ( b i d d i n g ) b y b o t h p a r t i e s f o r t h e p o t e n t i a l s et t l em e n t o f
t h e d i s p u t e . T h e s e o f f e r s a r e n o t d i s c l o s e d t o t h e o t h e r p a r t y;
h e n c e ‘ b l i n d ’ b i d d i n g . 282 T h e s e t t l e m e n t p r o p o s al s a r e i n t h e
c a l c u l a t e s t h e s p r ea d b e t w e e n t h e m , e i t h e r i n t h e f o r m o f a
p e r c e n t a g e o r o f a n a m o u n t o f m o n e y. If t h e o f f e r s a r e w i t h i n
280
RULE Colin, op. cit., p. 56.
281
SCHMITZ J. Amy, ‘Drive-thru’ Arbitration in the Digital Age: Empowering Consumers
through Binding ODR, Baylor Law Review, vol. 62, 2010, pp. 13, 14.
282
“Offers and demands remain confidential, so as to not prejudice future negotiations”. See
PONTE M. Lucille and CAVENAGH D. Thomas, CyberJustice: online dispute resolution (ODR)
for E-commerce, (Pearson/Prentice Hall), 2005, p. 44.
178
c e r t a i n l i m i t s ( u s u al l y f r o m 3 0 t o 5 p e r c e n t ) , t h e s o f t w a r e s e t s
t h e s e t t l em e n t a t m e a n v a l u e ; i f t h ey a r e n o t t h e p a r t i e s a r e
p r o c e s s c a n b e i l l u s t r a t e d wi t h a s i m p l e h yp o t h e t i c a l . F o r
s e t t l e d f o r n i n e t y. 283 T h e f a c t t h a t t h e p r o c e s s i s d r i v e n b y
considerations of bias.
a r e n o t c h a l l e n g e d , s u c h a s wi t h i n s u r a n c e c o m p e n s a t i o n s a n d
a m o u n t s a r e c l o s e . It c a n a l s o e f f e c t i v e l y b e u s e d i n t h o s e c a s e s
“where initially a number of issues are at stage, but after the use
o f m e d i a t i o n f o r ex a m p l e , t h e o n l y r e m a i n i n g i s s u e i n d i s p u t e i s
t h e a g r e e m e n t r e l a t i n g t o a n a m o u n t o f m o n e y” . 284 T h e r e a r e
f a m i l i a r i z e d wi t h t h e p r o c e s s m a y h a v e c o m p a r e d t o o n e - t i m e
283
SCHULTZ Thomas, The Roles of Dispute Settlement and ODR, op. cit., p. 138.
284
KATCH Ethan & RIFKIN Janet, op. cit., p. 62.
179
u s e r s a n d a b o u t t h e f a i l u r e t o p r o v i d e t r a d e - o f f s 285 w h i c h o f t en
m a y r e s u l t t o s u b o p t i m a l s e t t l e m e n t s . 286
“ C yb e r S e t t l e ” . 287 “ C yb e r S e t t l e ” h a s b e e n o n e t h e fi r s t p r o v i d e rs
d i s p u t es , w i t h m o s t c o m m o n a m o n g s t t h e m i n s u r a n c e d i s p u t e s .
r e s o l u t i o n p r o c e s s fr o m a p r i v a t e a n d s e c u r e a c c o u n t b y e n t e r i n g
t h e d i s p u t e . T h e OD R p r o v i d e r t h e n c o n t a c t s t h e o t h e r p ar t y w h o
i s a s k e d t o a l s o t o e n t e r t h r e e b i d s . Th e s o f t w a r e c o m p a re s t h e
p r o p o s e d a m o u n t s a n d c a l c u l a t e s t h e d i s t a n c e b e t w e e n t h e m . If
5 , 0 0 0 $ , t h e c l a i m i s s e t t l e d f o r t h e m e a n a m o u n t , an d t h e
g r e a t e r a n d t h e r e i s n o s e t t l e m e n t , e a c h p a r t y’ s b i d s r e m a i n
c o n f i d e n t i a l . “ If a c a s e f a i l s t o s e t t l e , t h e r e i s n o f e e c h a r g e d t o
e i t h e r p a r t y. If a c a s e s e t t l es f o r $ 5 , 0 0 0 o r l e s s , t h e f e e i s $ 1 0 0
f o r e a c h p a r t y. If a c a s e s e t t l e s f o r b e t w e e n $ 5 , 0 0 0 a n d $ 1 0 ,
285
WEISS Russell, Some Economic Musings on Cybersettle, University of Toledo Law Review,
vol.38, 2006, p. 89.
286
DEFFAINS Bruno & GABUTHY Yannick, Efficiency of Online Dispute Resolution: A Case
of Study, Communications &Strategies, No. 60, 4th Q., 2005, p. 205.
287
For more information visit www.cybersettle.com
180
0 0 0 , t h e f e e i s $ 1 5 0 f o r e a c h p a r t y. I f a c a s e s e t t l e s f o r m o r e
t h a n $ 1 0 , 0 0 0 , t h e f e e i s $ 2 0 0 f o r e a c h p a r t y” . 288 A n o t h er
e x a m p l e i s EC O D IR ’ s n e g o t i a t i o n s o ft w a r e o f f e r i n g a d yn a m i c
t a b l e o f “ b i d s a n d co u n t e r b i d s d e s i g n e d t o l e a d t o a g r e e m e n t s a s
q u i c k l y a s p o s s i b l e ” . 289 F u r t h e r m o r e , o t h e r O D R p r o v i d e r s w i t h
s i m i l a r s e r v i c e s a r e t h e “ M e d i a t i o n R o o m ” a n d “S m a r t S e t t l e
O n e ” . 290 T h e m a i n a d v a n t a g e o f a u t o m a t e d n e g o t i a t i o n i s t h a t i t
h a s t h e p o t e n t i a l o f s a v i n g m o n e y a n d ye a r s o f l i t i g a t i o n t o b o t h
t o p u r e l y m o n e t a r y d i s p u t e s ex c l u d i n g n o n - m o n e t a r y i s s u e s .
the basis of the settlement amount and split between the two
p a r t i e s ; f o r a s e t t l em e n t a m o u n t b el o w 2 0 . 0 0 0 U S D , t h e fe e i s
t yp i c a l l y a r o u n d 1 0 0 t o 2 0 0 U S D ” . 291
o f a d i s p u t e r e s o l u t i o n p r o c e s s . H o w ev e r , m o s t o f a l l i t r a i s e s
t h e q u e s t i o n o f w h a t e l s e a n e t w o r k - co n n e c t e d c o m p u t e r c a n d o
t o f a c i l i t a t e t h e r es o l u t i o n o f a d i s p u t e , s i n c e c o m p u t e r s , “ a r e
288
MANEVY Isabelle, op. cit., p. 12.
289
BENYEKHLEF Karim and GELINAS Fabien, op, cit., p. 45.
290
CORTES Pablo, op. cit., p. 65.
291
SCHULTZ Thomas, Online Dispute Resolution: an Overview and Selected Issues, op. cit., p. 5.
181
m u c h m o r e t h a n c a l c u l a t o r s , a n d s ys t e m s c a n b e b u i l t t o p r o c e s s
a n d e v a l u a t e q u a l i t at i v e i n f o rm a t i o n ” . 292
A s s i s t e d n e g o t i a t i o n i s t h e f o r m o n e m i g h t f i n d m o re
their dispute and in the process they use one or more of ODR’s
IC T t o o l s , s u c h a s t h e i n t e r n e t i n g e n e r a l a n d m o r e s p e c i f i c a l l y
e - m a i l , c h a t o r a u d i o a n d v i d e o c o n fe r e n c e . T h e p r o c e d u r e i s
a s s i s t a n c e o f s o f t wa r e e n h a n c i n g t h e a d v a n t a g e s o f t h e p r o c e s s
s u c h a s i n f o r m a l i t y, s i m p l i c i t y a n d u s e r f r i e n d l i n e s s . 293 The
s e r v i c e s s u c h a s i d e n t i f yi n g a n d a s s e s s i n g s t a n d a r d s o l u t i o n s ,
w r i t i n g a g r e e m e n t s o r s t o ri n g i n f o r m at i o n . A s s i s t e d n e g o t i a t i o n
i s a h i g h l y s u c c e s s f u l O D R m e t h o d wi t h h i g h l y u s e d p r o v i d e r s
s u c h a s “ S q u a r e T r a d e ” a n d “ S m a r t S e t t l e ” . 294 “ T h e f e e r a n g e i s
n o r m a l l y b e t w e e n 5 0 a n d 3 0 0 US D p e r p a r t y a n d p e r h o u r ” . 295
292
MOFFITT Michael & BORDONE Robert, op. cit., p. 431.
293
CORTES Pablo, op. cit., p. 66.
294
“SmartSettle, originally called OneAccord, is much more sophisticated negotiation software
than the blind bidding systems. SmartSettle is intended for use in disputes that are simple or
complex, single issue or multi-issue, two party or multi-party, composed of quantitative or
qualitative issues, of short or long duration, and involving interdependent factors and issues”.
WANG Fangfei Faye, op. cit., p. 57. For more information see www.smartsettle.com
295
SCHULTZ Thomas, Online Dispute Resolution: an Overview and Selected Issues, op. cit., p. 4.
182
B. Online Mediation
O n l i n e m e d i a t i o n i s t h e o n l i n e e q u i v a l e n t o f t r a d i t i o n al
mediation with the only difference in the fact that the parties
o p p o r t u n i t i e s p r o v i d e d b y t h e In t e r n e t a n d c o n d u c t t h e p r o c e d u r e
o n l i n e b y r e p l a c i n g t h e p h ys i c a l m e e t i n g s o f t h e p a r t i es w i t h
c o m m u n i c a t i o n b a s e d o n e l e c t r o n i c t r an s m i s s i o n s . 296 U s i n g t h e i r
p e r s o n a l c o m p u t e r s , p a r t i e s c a n c o m m u n i c a t e w i t h e a ch o t h e r
f r o m t h e f a r c o r n e r s o f t h e e a r t h . T e c h n o l o g y p l a ys a n i m p o r t a n t
r o l e b e c a u s e c o m m u n i c a t i o n i s c e n t r a l t o m e d i a t i o n i n o rd e r t o
B e c a u s e m e d i a t i o n i s l e s s f o rm a l , i t i s h i g h l y s u i t a b l e t o
t h e o n l i n e e n v i r o n m e n t a n d t h e i n t e r n e t o f f e r s p a r t i c i p an t s an
f i l e s a d i s p u t e . T h e p r o v i d e r t h e n c o n t ac t s t h e o t h e r p a r t y t o f i n d
296
United Nations Conference on Trade and Development, Dispute Settlement , International
Commercial Arbitration, Electronic Arbitration, (New York and Geneva: United Nations, 2003)
p. 4.
183
m e d i a t i o n p r o c e d u r e . If s o , a m e d i a t o r i s c h o s e n o r a s s i g n e d a n d
“ M e d i a t e . c o m ” a n d u s e s o n l i n e m e d i at i o n a n d a r b i t r a t i o n f o r t h e
c o n s u m e r ” ( B 2 C ) c o m m e r c i a l d i s p u t e s . In o r d e r t o i n i t i at e , f o r
i n s t a n c e , t h e m e d i at i o n p r o c e d u r e o n e o f t h e p a r t i e s m u s t co n t a c t
the ODR provider and register the dispute. The ODR provider
t h e n c o n t a c t s t h e o t h e r p a r t y, t h e a g r e e m e n t o f w h o i n i t i a t e s t h e
m e d i a t i o n p r o c e d u re . T h e m e d i a t o r s re s o l v i n g t h e d i s p u t e a r e
e x p e r i e n c e d p r a c t i t i o n e r s w i t h o n l i n e t ra i n i n g a n d t h e y a s s i s t t h e
a g r e e m e n t . “ T h e f e e s r a n g e f r o m $ 5 0 p e r h o u r p e r p ar t y f o r
d i s p u t es u n d e r $ 1 0 , 0 0 0 t o $ 1 0 0 p e r h o u r p e r p a r t y f o r d i s p u t e s
o v e r $ 5 0 , 0 0 0 ” . 297
f o r m i n g a p l a c e o f d i g i t a l c o m m u n i c at i o n , 298 a v i r t u a l r o o m i n
t h e c yb e r w o r l d . O n l y t h e p a r t i c i p a n t s i n t h e m e d i a t i o n p r o c e s s
297
MANEVY Isabelle, op. cit., p. 14.
298
ROSENTHAL David, Internet. Schöne, neue Welt? Der Report über die unsichtbaren Risiken,
(Orell Füssli, 2nd Ed.), 1999, p. 21.
184
m a y b e p r e s e n t i n s u c h a v i r t u a l r o o m , a n d t h e i r ex c l u s i v e a c c e s s
c a n b e e n s u r e d b y t h e u s e o f s p e c i a l c o d e s o r p a s s w o r d s . 299 T h e
m e d i a t o r c a n i n t er a c t e x c l u s i v e l y w i t h o n e o f t h e p a r t i e s ,
r o o m . T h i s w a y i t i s e v e n p o s s i b l e fo r t h e m e d i a t o r t o b e i n
d i f f e r e n t “ r o o m s ” s i m u l t a n e o u s l y, s o m e t h i n g w h i c h w o u l d b e
i m p o s s i b l e i n r e a l -w o r l d , o f f l i n e m e d i a t i o n . 300
i n f o r m a l p r o c e s s p re s e n t s g r e a t e r r i s k s o f a b u s e o n t h e i n t e r n e t
b e c a u s e t h e p a r t i e s a r e n o t i n p h ys i c a l p r o x i m i t y. C e r t a i n l y t h e
i m p e r s o n a l p r o c e s s a n d t h e l a c k o f p h ys i c a l p r e s e n c e o f t h e
parties to the dispute and the mediator can work against the
p o s s i b l e g a p s i n c o m m u n i c a t i o n a n d i n c r e a s e d u n c e r t a i n t y, 301
299
BIUKOVIC Ljiljana, International commercial arbitration in cyberspace: recent developments,
North-western Journal of International Law & Business, vol. 22, 2002, pp. 319, 332.
300
“It is possible to segment the online platform into spaces, such that Space A is only accessible
to one party and the mediator, Space B is only accessible to the other party and the mediator, and
Space C is accessible to both parties and the mediator. Spaces A and B could be used for virtual
private caucuses, and Space C for public discussions. In this way, the platform can be used to
replicate the traditional three room procedure by the use of virtual meetings on an online platform.
The mediator and the parties in an online mediation can be simultaneously in Spaces C and A/B,
thus being in a joint meeting and caucus at the same time”. See. HÖRNLE Julia, op. cit., pp. 79,
80.
301
D' ZURILLA T. William, Alternative Dispute Resolution: ADR Hits the Internet, Louisiana
Bar Journal, vol. 45, 1995, p. 352.
185
s e e m c o n d u c i v e t o s u c c e s s f u l m e d i a t i o n ” . 302 A l s o t h e r e a r e
r e s o l v i n g c e r t a i n k i n d s o f d i s p u t e s . Le g a l l y, m e d i a t i o n ca n b e
u s e d t o r e s o l v e an y d i s p u t e t h a t f al l s u n d e r t h e c o n t r a c t u a l
b r i n g s a l o n g d e p e r s o n a l i z a t i o n , i t p r e s en t s a p a r t i c u l a r c h a l l e n g e
w h e n p h ys i c a l h a r m h a s o c c u r r e d ” . 303 T h i s i s n o t t h e c a s e f o r
n u m e r o u s o n l i n e m e d i a t i o n i n i t i a t i v e s i n t o ex i s t e n c e .
t h e a b i l i t y t o s u b s t i t u t e p h ys i c a l m e e t i n g s w i t h v i r t u a l m ee t i n g s
which obviates the need to travel and the ability to conduct the
m e d i a t i o n p r o c e d u r e a s yn c h r o n o u s l y w h i c h a d s t o c o n v e n i e n c e
a n d i n c r e a s e s t h e c h a n c e s o f s u c c e s s . 304 A n o t h e r m a i n a d v an t a g e
o f o n l i n e m e d i at i o n i s t h e u s e o f f l ex i b l e p r o c e d u r e s w h i c h a l l o w
It a i m s n o t o n l y t o r e s o l v e t h e d i s p u t e , b u t t h e d yn a m i c p r o c e s s
c r e a t e s n e w v a l u e s a n d p e r s p e c t i v e s s er v i n g a s a f o r u m o f i d e a s
b y e n h a n c i n g t h e i n f o r m a t i o n ex c h a n g e a n d t h e c o o p e r a t i o n
302
EISEN Joel, op. cit., p. 1305.
303
SCHULTZ Thomas, Online Dispute Resolution: an Overview and Selected Issues, op. cit., p. 5.
304
HÖRNLE Julia, op. cit., p. 80.
305
E-mediation, available at
http://www.judgelink.org/a2j/system.design/Resolution/emediation.cfm
186
l i t i g a t i o n o r f o r t h at m a t t e r t r a d i t i o n al A D R c a n n o t g u a r a n t e e t o
t h e s a m e e x t e n d ; 306 t h e v o l u n t a r y c h a r a c t e r a n d t h e i n f o r m al
n a t u r e o f t h e p r o c e s s p r o v i d e g r e a t f l e x i b i l i t y, f a s t e r d e c i s i o n s ,
s i m p l i c i t y, u s e r - f r i e n d l i n e s s a n d c o n s e q u e n t l y t h e m e d i a t o r ’ s
a b i l i t y t o a d a p t p a r t s o f t h e p r o c e s s a n d a d d r e s s s p e c i a l n e e d s . 307
P a r t i c i p a n t s i n e - m e d i a t i o n n e e d n o t re s p o n d i m m e d i a t e l y a s i n
t h e c o m p l ex i t y o f t h e m a t t e r i n h a n d a n d t h e t i m e r e q u i r e d f o r
m e d i a t i o n w i l l c e r t a i n l y b e l e s s t h an t h a t o f a t r a d i t i o n a l
m e e t i n g s s p a r e s t h e p a r t i e s o f c o s t s r e l a t i n g t o t r a v e l ex p e n s e s
a n d s e c u r i n g v e n u e s t o h o l d t h e s e m e e t i n g s . 308 “ F e e s f o r o n l i n e
m e d i a t i o n a r e u s u al l y c o m p u t e d o n an h o u r l y b a s i s , a n d r a n g e
f r o m 5 0 t o 2 5 0 US D p e r p a r t y a n d p e r h o u r ” . 309
306
BATES M. Donna, A consumer’s dream or Pandora’s Box: Is arbitration a viable option for
cross-border consumer disputes?, Fordham International Law Journal, vol. 27, 2004, pp. 823,
824.
307
LIDE E. Casey, ADR and Cyberspace: The Role of Alternative Dispute Resolution in Online
Commerce, Intellectual Property and Defamation, Ohio State Journal on Dispute Resolution, vol.
12, 1996, p. 208.
308
MOEVES S. Amy and MOEVES C. Scott, op. cit., pp. 862- 864.
309
SCHULTZ Thomas, Online Dispute Resolution: an Overview and Selected Issues, op. cit., p. 5.
187
ahead. The number of ODR providers offering online mediation
d u r i n g t h e p a s t ye a r s i s r e l at i v e l y h i g h i n c l u d i n g p r o v i d e rs s u c h
“ W e b M e d i a t e ” a n d “ In t e r n e t N e u t r a l ” . 310
C. Online Arbitration
A g a i n , t h e m a i n d i f f e r e n c e l a ys o n t h e w a y o f c o m m u n i c a t i o n .
p r o c e s s o f a r b i t r a t i o n . F o r t h e i r c o m m u n i c a t i o n t h e p a r t i es u s e
v a r i o u s IC T t o o l s , s u c h a s e - m a i l s , a u d i o a n d v i d e o c o n f e r e n c e s .
310
For Instance “Internet Neutral allows parties to choose from several online mediation
alternatives, including e-mail, instant messaging, chat conference rooms and video conferencing.
Internet Neutral uses conferencing software that enables the mediator to communicate with the
parties in designated channels or ‘rooms’ accessed securely with passwords. During the mediation,
the software enables the parties to communicate through two channels: one for a private dialogue
between one party and the mediator, the other for open dialogue with all participants, including the
mediator”. See WANG Fangfei Faye, op. cit., p. 57.
188
O D R c o m b i n e s t h e e f f e c t i v e n e s s o f t ra d i t i o n al a r b i t r a t i o n w i t h
t h e i n n o v a t i v e p o w e r o f t h e In t e r n e t ; “ k n o w n t e r m s i n c l u d e
c yb e r - a r b i t r a t i o n , c yb i t r a t i o n , c yb e r s p a c e arbitration, virtual
t e c h n i q u e s ” . 311
a n d a r b i t r a t i o n t o re s o l v e o f f l i n e d i s p u t e s . T h i s d i s t i n c t i o n t e n d s
i n t e r n e t . B u t o n l i n e a r b i t r a t i o n d o e s n o t d e p e n d o n t h e o ri g i n o f
t h e d i s p u t e ; o f f l i n e d i s p u t es a r i s i n g f r o m r e a l w o r l d t r a n s ac t i o n s
m a y w e l l b e s u b j ec t e d t o o n l i n e a r b i t r a t i o n a n d r e s o l v e d i n
a c c o r d a n c e w i t h t h e f r e e w i l l o f t h e p a rt i e s u s i n g t h e d i v e rs e a n d
i n n o v a t i v e t e c h n o l o g i e s t h a t t h e i n t e rn e t h a s t o o f f e r . 312 T h u s ,
o n l i n e a r b i t r at i o n i s p e r c e i v e d i n t h e b r o a d e r s e n s e , a s a n y
e l e c t r o n i c m e a n s a s s o c i a t e d w i t h t h e d e v e l o p m e n t o f i n t e rn e t ”. 313
t r a n s a c t i o n s , b e c a u s e t h e p a r t i e s w h o u s e t h e i n t e r n et a r e
311
HERRMANN Gerold, Some legal e-flections on online arbitration (‘cybitration’), in Law of
international business and dispute settlement in the 21st century, (Bredow eds. Cologne), 2001, p.
267.
312
MOREK Rafal, op. cit., p. 45.
313
CALLIESS Gralf-Peter, op. cit., p. 450.
189
d i s a d v a n t a g e s a n d m o r e a d v a n t a g e s . 314 F o r i n s t a n c e , i t c a n b e
f o r i n t a n g i b l e e l e c t ro n i c g o o d s . 315
O n l i n e a r b i t r a t i o n i s a n a u t o n o m o u s e x t r a j u d i c i al d i s p u t e
p u r s u i t o f a p r i v a t e s o l u t i o n b y a t h i r d p a r t y, h a s i t s f o u n d a t i o n
e l e c t r o n i c m e d i a a n d h a s i t s o w n a r e a t r a n s n a t i o n al a n d v i r t u a l .
W h a t o n e r e a l i z es e a s i l y i n a n o n l i n e a r b i t r a t i o n p r o c e d u r e i s t h e
a b s e n c e o f a m a t er i a l v e n u e f o r t h e p r o c e e d i n g s . T r a d i t i o n al
f a c e - t o - f a c e h e a r i n g s a r e r e p l a c e d b y m e a n s o f v i s u al d i s t a n c e
t o t r a v e l , t h u s r ed u c i n g t i m e w a s t e d a n d c o s t . 316 In o n l i n e
t h e a p p o i n t m e n t o f a r b i t r a t o r s , t h e a rb i t r a l p r o c e e d i n g s a n d t h e
190
i n s t a n t a n e o u s l y i n c yb e r s p a c e ; t h e p h ys i c a l s e p a r a t i o n b e c o m e s
A r b i t r a t i o n i s m o s t s u i t a b l e f o r t h e o n l i n e e n v i r o n m e n t . 317
w i t h t h e p a r t i es i n s u c h a n i n t e n s e m a n n e r a n d c o m m u n i c a t i o n
p r o c e s s e s a r e l e s s c o m p l ex t h a n i n o n l i n e m e d i a t i o n ” . 318 O n l i n e
c o n v e r s a t i o n b e t w ee n t h e n e u t r a l a n d t h e p a r t i e s . 319 B a s e d o n t h e
o u t c o m e o f t h e p ro c e s s , o n l i n e a r b i t r a t i o n i s d i s t i n g u i s h e d t o
b i n d i n g a n d n o n - b i n d i n g o n l i n e a r b i t ra t i o n . A s f a r a s t h e l a t t e r
p r o c e d u r e i s s a n c t i o n e d b y t h e p r i n c i p l e o f p a r t y a u t o n o m y. O n
the other hand, in the case of binding online arbitration there are
a g r e e m e n t s a n d o n l i n e a r b i t r a l a w a r d s , e s p e c i a l l y, w i t h i n t h e
m e a n i n g o f t h e “ N e w Y o r k C o n v e n t i o n ” ( N Y C ) . 320
317
LODDER R. Arno and VREESWIJK Gerard, Online arbitration services at a turning point,
ICC International Court of Arbitration Bulletin, 2004, pp. 21-28.
318
BERNSTEIN Ronald, J. TACKABERRY John, and MARRIOTT L. Arthur, Handbook of
Arbitration Practice (Sweet & Maxwell 3rd Ed.), 1998, p. 5.
319
RULE Colin, op. cit., p. 44.
320
“The NYC was adopted at a time when the drafters could not foresee that arbitration
agreements and arbitral awards could take other than a physical form”. See BETANCOURT C.
Julia and ZLATANSKA Elina, op. cit., pp. 262, 263.
191
A l t h o u g h c u r r e n t l y t r e a t e d w i t h s o m e c a u t i o n , i t s h o ws
s i g n i f i c a n t g r o w t h p o t e n t i al a n d c o m p a r a t i v e a d v a n t a g e s v e r s u s
c o n v e n t i o n a l a r b i t ra t i o n . T o d a y o n l i n e a r b i t r a t i o n i s b ec o m i n g
c o m m u n i c a t i o n b e t w e e n t h e p a r t i e s an d i s a n i d e a l m e ch a n i s m
f o r r e s o l v i n g d i s p u t e s . O n l i n e a r b i t ra t i o n i s b e c o m i n g m o r e
d e s i r a b l e b e c a u s e i t r e p r e s e n t s s o m e a d d i t i o n a l b e n e f i t s fo r t h e
e f f e c t i v e n e s s , f l ex i b i l i t y a n d r e l o c a t i o n . 321 H o w e v e r , d e s p i t e t h e
s e v e r a l o n l i n e p r o v i d e r s , a r b i t r a t i o n i s n o t ye t a v e r y p o p u l a r
O D R m e t h o d , e s p ec i a l l y a t a n i n t e r n a t i o n a l l e v e l . S u c c e s s f u l
O D R i n i t i a t i v e s a re r a r e a n d t h e n u m b e r o f a r b i t r a t i o n c a s e s
o n l i n e i s q u i t e s m a l l , ex c e p t i n s o m e A s i a n c o u n t r i e s s u c h a s
J a p a n a n d m o r e r e c e n t l y i n N o r t h A m e r i c a . In B 2 C d i s p u t e s ,
a p p r o a c h g i v e n t h e e x i s t i n g d i f f i c u l t i e s i n a p p l yi n g d o m e s t i c
321
KAUFMANN-KOHLER Gabrielle and SCHULTZ Thomas, op. cit., p. 68.
192
Online arbitration is ex p a n d i n g d a i l y, particularly in
j u s t e v i d e n c e o f i t s s u c c e s s a n d ri s i n g p o p u l a r i t y, b u t a l s o
r e a l i t y. 322 O n l i n e a r b i t r a t i o n h a s b e e n l i s t e d a s a l e g a l c o n c e p t
a c c o r d i n g t o w h i c h “ M e m b e r S t a t e s s h al l e n s u r e t h a t i n c as e s o f
i n f o r m a t i o n s o c i e t y, t h e i r l e g i s l a t i o n d o e s n o t h a m p e r t h e u s e o f
s e t t l e m e n t , i n c l u d i n g a p p r o p r i a t e e l e c t r o n i c m e a n s ” . 323
C u r r e n t l y, s e v e r a l t r a d i t i o n a l o f f l i n e i n s t i t u t i o n s , s u c h a s
t h e “ C h a r t e r e d In s t i t u t e o f A r b i t r a t i o n ” a n d t h e “ In t e r n a t i o n a l
i n t r o d u c e d O DR t ec h n o l o g y. 324 O n l i n e a r b i t r a t i o n a t t r a c t s t h e
l a s t t w o d e c a d e s . 325 T h e f i r s t e x p e r i e n c e o f a f o r m a l d i s p u t e
322
DONAHEY Scott, Dispute resolution in cyberspace, Journal of International Arbitration, vol.
15, 1998, p. 127.
323
Directive 2000/31/EC of the European Parliament and of the Council of 8 June 2000 on certain
legal aspects of information society services, in particular electronic commerce, in the Internal
Market (Directive on electronic commerce), Article 17.
324
DAVIS G. Benjamin, Symposium Enhancing Worldwide Understanding through Online
Dispute Resolution: Walking Along in the Mission, University of Toledo Law review, vol. 38,
2006, p. 2.
325
ARSIC Jasna, op. cit., p. 209.
193
“ V i r t u a l M a g i s t r a t e” 326 i s s u e d a d e c i s i o n i n a d i s p u t e , a f t e r t h e
c o m m u n i c a t i o n w as d o n e ex c l u s i v e l y b y e l e c t r o n i c m e a n s . 327
R e s o l u t i o n ” . 329 “ F e e s f o r o n l i n e a r b i t r a t i o n a r e u s u a l l y t h e s a m e
b a s i s , a n d r a n g e f r o m 5 0 t o 2 5 0 US D p e r p a r t y a n d p e r h o u r ” . 330
b e t w e e n 4 h o u r s a n d 6 0 d a ys .
o p e r a t e s , s u c h a s c o n f i d e n t i a l i t y, t r a n s p a r e n c y a n d e f f i c i e n c y a r e
326
See infra at ‘ODR in action’.
327
KAUFMANN-KOHLER Gabrielle and SCHULTZ Thomas, op. cit., p. 27
328
“Webdispute.com is an example of an online arbitration service provider. It is a US based
company that arbitrates online commercial disputes for business-to-business (B2B) and business-
to-consumers disputes (B2C). The consent of both parties is required, who need to mutually agree
on an arbitration forum and sign an “oath of participation”. Webdispute.com offers
“document/email” hearing as an option. Parties submit documents to the arbitrator and the other
party and comment on the evidence submitted by both sides via email to the arbitrator. The
arbitrator notifies the parties of his decision within twenty business days. Webdispute.com costs
from $ 100 to $ 600 for online arbitration”. See MANEVY Isabelle, op. cit., p. 15
329
“E-Resolution is a virtual tribunal to settle domain name disputes. The ICANN (Internet
Corporation for Assignment Names and Numbers) has accredited e-Resolution to settle domain
name disputes online in accordance with the ICANN Uniform Domain-Name- Dispute-Resolution
Policy. A domain name complaint can be submitted online by means of a secure web based
complaints form or by e-mail. The arbitrator deals with the parties’ claims in conformity with
ICANN’s Policy and ICANN‘s Rules and e-Resolution’s own supplemental rules. After both
parties have had the opportunity to make their case, the arbitrator will issue a legally binding
decision. Anyone registering a domain name is bound by the ICANN Rules”. See HEUVEL V. D.
Esther, op. cit., pp. 9, 10.
330
SCHULTZ Thomas, Online Dispute Resolution: an Overview and Selected Issues, op. cit., p. 6
194
d e v e l o p m e n t o f t e ch n o l o g y 331 w i l l n o t o n l y c o v e r a n y d e f e c t s
t r a d i t i o n a l a r b i t r a t i o n . 332 A r b i t r a t i o n h a s u n i q u e a d v a n t a g e s t h at
m a k e i t i n v a l u a b l e a n d n e c e s s a r y f o r a n y O D R s ys t e m . O n l i n e
a r b i t r a t i o n , t h e k ey s t a g e s o f t h e o n l i n e a r b i t r a t i o n p r o c e d u r e
a n d t h e c o r r e s p o n d i n g i s s u e s a s w el l a s t h e o u t c o m e o f t h e
e f f e c t i v e a n d f a i r O D R s ys t e m . 333
331
HÖRNLE Julia, Online Dispute Resolution: the Emperor's New Clothes, op. cit., pp. 29-59.
332
YU Hong-lin and NASIR Motassem, Can online arbitration exist within the traditional
arbitration framework? Journal of International Arbitration, vol. 20, 2003, p. 455.
333
Se infra at ‘Arbitration as the final step of the ODR process’.
195
Chapter 2
a c c o u n t o f t h e a l s o b r i e f O D R h i s t o r y. T h i s w a y i t p r o v i d e s a
a l l o w s i d e n t i f yi n g t h e s u c c e s s f u l i n i t i a t i v e s a n d t h e e l e m e n t s
t h a t l e d t o t h e i r s u cc e s s .
i n f o r m a l o n l i n e d i s p u t e r e s o l u t i o n m ec h a n i s m s w h i c h p ro v i d e d
s u i t a b l e m e a n s t o re s o l v e d i s p u t e s , b u t a l s o a w h o l e n e w s e c t o r
o f i n d u s t r y. T h e r e c o r d b r e a k i n g i n c r e a s e o f d i s p u t e s a r i s i n g o u t
334
“Professors Ethan Katsh and Janet Rifkin founded the National Center for Technology and
Dispute Resolution, which supports and sustains the development of information technology
applications, institutional resources, and theoretical and applied knowledge for better
understanding and managing conflict”. See BETANCOURT C. Julia and ZLATANSKA Elina, op.
cit., p. 257.
196
led to the funding of three experimental ODR projects. The
“ O n l i n e O m b u d s Of f i c e ” a n d t h e p r o j e c t o f t h e U n i v e r s i t y o f
M a r yl a n d w e r e t h e p r e c u r s o r s o f O D R . 335 R e g a r d l e s s o f t h ei r
s u c c e s s t h o s e p r o j ec t s i l l u s t r a t e d t h a t re s o l v i n g d i s p u t e s o v e r t h e
p o s s i b i l i t y. F u r t h e r m o r e , t h e v i a b i l i t y o f O D R i s e v i d e n t b y t h e
“ H a g u e C o n f e r e n c e o n P r i v a t e In t e r n a t i o n a l La w ” , t h e “ W o r l d
In t e l l e c t u a l P r o p e r t y O r g a n i z a t i o n ” , a n d t h e “ E u r o p e a n U n i o n ” .
A c c o r d i n g t o P a b l o C o r t e s t h e e v o l u t i o n o f O D R c a n b e d i v i d ed
i n t o f o u r s e p a r a t e p h a s e s . T h e fi r s t o n e i s d e s c r i b e d a s t h e
h o b b yi s t p h a s e p r i o r t o 1 9 9 5 , w h e n o n l i n e d i s p u t e s w er e o n l y
p h a s e w a s t h e ex p er i m e n t a l p h a s e f r o m 1 9 9 5 t o 1 9 9 8 t h a t g a v e
b i r t h t o t h e p r e c u r s o r s i n O D R . Th e t h i r d p h a s e wa s t h e
s t a k e h o l d e r s s a w OD R ’ s g r e a t p o t e n t i al i n d i s p u t e r e s o l u t i o n a n d
c r e a t e d m a n y s u c c e s s f u l p r i v a t e i n i t i a t i v e s s u c h a s EB a y’ s
S q u a r e T r a d e a n d C yb e r S e t l l e . F i n a l l y, t h e l a s t p h a s e t h a t i s
335
Ibid., p. 256.
197
b o d i e s a n d t h i s r ea l i z a t i o n l e a d s t o n e w i n i t i at i v e s an d t h e
w i d e s p r e a d a d o p t i o n o f O D R p r o g r a m s . 336
S e c t i o n 1 : T h e Vi r t u a l M a g i s t r a t e Pr o j e c t ( V M P)
s p e c i a l i z i n g i n c yb e r l a w u n d e r t h e au s p i c e s o f t h e “ N a t i o n a l
“ C yb e r s p a c e La w I n s t i t u t e ” ( C LI) , t h e “ A m e r i c a n A r b i t r a t i o n
A s s o c i a t i o n ” ( A A A ) , a n d t h e “ V i l l a n o v a C e n t e r f o r In f o r m a t i o n
La w a n d P o l i c y” l o c a t e d i n V i l l a n o v a U n i v e r s i t y ( P h i l a d el p h i a ,
U S A ) . T h e V M P w a s a p i l o t p r o j e c t a n d i t s p r i n ci p a l g o a l w a s t o
o n l i n e d i s p u t e s t h ro u g h o n l i n e a r b i t r a t i o n i n a q u i c k a n d c o s t -
e f f e c t i v e w a y. T h e V M P u s e d a s i t s m e t h o d o f r e s o l u t i o n
d i s p u t es b e t w e e n In t e r n e t S e r v i c e P r o v i d e r s ( IS P s ) a n d u s e r s . 337
336
CORTES Pablo, op. cit., pp. 55, 56.
337
“It was a voluntary procedure better described as a contractual arbitration that had some
binding effects but not the executory effects within the meaning of the legislation and treaties on
recognition and execution of arbitral awards”. See BENYEKHLEF Karim and GELINAS Fabien,
op. cit., p. 90.
198
a c t i v i t y i n v o l v i n g u s e r s o f o n l i n e s ys t e m s a n d s ys t e m o p e r a t o r s ,
m i s a p p r o p ri a t i o n o f t r a d e s e c r e t s , d e f a m a t i o n , f r a u d , d e c e p t i v e
w h e r e o n e p a r t y p o s t s a m e s s a g e o r f i l e o n t h e s ys o p ' s s ys t e m
t h a t a n o t h e r p a r t y f i n d s o f f e n s i v e d e f a m a t o r y, l i b e l o u s , a n
i n f r i n g e m e n t o f t h e c o m p l a i n i n g p a r t y' s t r a d e m a r k o r c o p yr i g h t ,
f r a u d u l e n t , o b s c e n e, e t c . a n d d e m a n d t h a t t h e s ys o p r e m o v e t h e
o f f e n d i n g m e s s a g e . 339
d a t e o f t h e d i s p u t e, t h e p a r t i e s c o n c e r n e d a n d t h e c a t e g o r y o f
d i s p u t e . Th e r e w a s a s m a l l f e e o f $ 1 0 p e r f i l i n g i n o r d e r t o
338
“In particular the Virtual Magistrate’s agenda aimed to establish the feasibility of using online
dispute resolution for disputes that originate online; provide system operators with informed and
neutral judgments on appropriate responses to complaints about allegedly wrongful postings;
provide users and others with a rapid, low-cost, and readily accessible remedy for complaints
about online postings; lay the groundwork for a self-sustaining, online dispute resolution system as
a feature of contracts between system operators and users and content suppliers (and others
concerned about wrongful postings); help to define the reasonable duties of a system operator
confronted with a complaint; explore the possibility of using the Virtual Magistrate Project to
resolve other disputes related to computer networks; develop a formal governing structure for an
ongoing Virtual Magistrate operation”. See PONTE M. Lucille, The Michigan Cyber Court: A
Bold Experiment in the Development of the First Public Virtual Courthouse, North Carolina
Journal of Law and Technology, vol. 4, 2002, p. 67.
339
VICTORIO M. Richard, op. cit., pp. 6, 7.
199
conducted using email. After receiving complaints, the Virtual
M a g i s t r a t e w o u l d ra n d o m l y s e l e c t a n i m p a r t i a l a r b i t r a t o r f r o m a
p o o l o f a r b i t r a t o r s fa m i l i a r w i t h c yb e r l a w , q u a l i f i e d b y C L I a n d
t h e A A A a n d t r a i n e d b y t h e A A A . T h e a r b i t r a t o rs w o u l d
r e a s o n a b l e i n l i g h t o f a v a i l a b l e i n f o rm a t i o n , n e t w o r k et i q u e t t e ,
a p p l i c a b l e c o n t r a c t s , a n d a p p r o p r i a t e s u b s t a n t i v e l a w s ” ; 340 t h e
“ V i l l a n o v a C e n t e r f o r In f o r m a t i o n La w a n d P o l i c y” r e c e i v e d t h e
w o u l d b e r e s o l v e d w i t h i n t h r e e d a ys .
s u c c e s s f u l m a i n l y b e c a u s e o f t h e l i m i t ed s c o p e o f d i s p u t e s t h a t i t
c o u l d h a n d l e ( s o c i al r e l a t i o n s a r i s i n g o u t o f u s e o f t h e In t e r n e t ,
a d v e r t i s e d , t h e r e b y c r e a t i n g l e s s a wa r e n e s s o f t h i s s e r v i c e .
a r b i t r a t i o n t h e r e w as a c o n s i d e r a b l e d i f f i c u l t y c o n v i n c i n g p a r t i e s
to take part in the procedure. Not only AOL which had agreed to
r e f e r d i s p u t e s t o t h e V M P d e c i d e d n o t t o r i s k i t s p o we r a n d
i n d e p e n d e n c e b y o u t s o u r c i n g t h e s e d e c i s i o n s , b u t al s o t h e V M P
d i d n o t m a n a g e t o p e r s u a d e o t h e r IS P s t o p a r t i ci p a t e i n t h e
340
SHAH Aashit, op. cit., p. 2.
200
s c h e m e . 341 F i n a l l y, t h e u s e o f c o n t r a c t u a l a r b i t r a t i o n w h i c h co u l d
not render binding awards and the use of outdated software were
fact that the one of the parties, the alleged wrongdoer, did not
e v e n p a r t i c i p a t e . T h e V M P ' s c a s e i n v o l v e d J a m e s T i e r n e y, a n
“ A m e r i c a O n l i n e ” ( A O L) u s e r , w h o c o m p l a i n e d , m ai n l y b e c a u s e
i t p r o m o t e d s p am m i n g , a b o u t a n a d v e r t i s e m e n t p o s t e d b y “ E M a i l
A m e r i c a ” o n A O L' s w e b s i t e t h a t o f f e r e d f o r s a l e m a s s e - m a i l
f r o m i t s s ys t e m . A l t h o u g h t h e d i s p u t e w a s r e s o l v e d , t h e p r o j e c t
p a r t i e s i n t h e d i s p u t e , t h e c o m p l a i n a n t J a m e s T i e r n e y, h a d a l s o a
r o l e a s a n a d v i s o r i n t h e V M P , a n d s e co n d , b e c a u s e a n o t h er p a r t y
In s t e a d , t h e d i s p u t e w a s r e s o l v e d b y A O L a l o n e , b y r e m o v i n g t h e
a d v e r t i s e m e n t b a s ed o n t h e f a c t t h at “ E M a i l A m e r i c a” h a d
341
CORTES Pablo, op. cit., pp. 54, 55.
201
aforementioned reasons, the VMP did not manage to take off,
since “it was easy to discount the case as a publicity stunt and
a t t r a c t i n g m o r e c a s e s w a s a p r o b l e m fo r V M P ” . 342 E v e n t h o u g h
e f f e c t i v e l y p a v e t h e r o a d f o r f u t u r e O DR p r o v i d e r s .
S e c t i o n 2 : T h e O n l i n e O mb u d s O f f i c e
U n i v e r s i t y o f M a s s a c h u s e t t s wi t h t h e ai m o f d e v e l o p i n g a r i c h e r
s e t o f o n l i n e d i s p u t e r e s o l u t i o n t o o l s . 343 T h e “ O n l i n e O m b u d s m an
A u t o m a t e d In f o r m a t i o n R e s e a r c h ” ( N C A IR ) . T h e O n l i n e O m b u d s
342
HANG Q. Lan, op. cit., p. 861.
343
SHAH Aashit, op. cit., p. 3.
202
a r i s i n g o u t o f o n l i n e a c t i v i t i e s . S i n c e 1 9 9 6 , t h e O n l i n e Om b u d s
a r i s i n g o n t h e In t e r n e t , “ s u c h a s d i s p u t e s b e t w e e n m e m b e r s o f
d i s c u s s i o n g r o u p s , d i s p u t es c o n c e r n i n g d o m a i n n a m e s , d i s p u t e s
b e t w e e n c o m p e t i t o rs , b e t w e e n In t e r n e t a c c e s s p r o v i d e r s a n d t h e i r
s u b s c r i b e r s a n d d i s p u t e s c o n c e r n i n g i n t e l l e c t u a l p r o p er t y”. 344
f u n c t i o n w a s p r a c t i c a l l y t h a t o f a m e d i a t o r . It w a s a n a t t e m p t t o
c yb e r s p a c e b y p r o v i d i n g i n f o r m a t i o n , co n s u l t at i o n a n d r e s o l u t i o n
b y e x p e r i e n c e d o m b u d s p e r s o n s f r o m a n yw h e r e i n t h e w o r l d .
since each part y provided the OOO information about the dispute
t h e c a s e a n d c o n t a ct e d t h e u s e r i n i t i a t i n g t h e p r o c e d u r e , a s w e l l
as the other party to ask questions about the dispute. The OOO
d i s c u s s i o n s wi t h t h e p a r t i e s e i t h e r i n o n e c h a t r o o m wi t h b o t h
344
BENYEKHLEF Karim and GELINAS Fabien, op. cit., p. 91.
203
shuttle back and f o r t h . 345 E v e n though there is not m u ch
dispute.
T h e c a s e i n v o l v e d t w o p a r t i e s R o b e r t G r a y, w h o p r o v i d e d
a news and information service through his web site and the
t h e r e b y i n f r i n g i n g t h e p a p e r ’ s c o p yr i g h t s . G r a y c o n t a c t e d t h e
c o m m u n i c a t i o n b e t w e e n t h e p a r t i e s . Th e n e w s p a p e r ex p r e s s e d i t s
c o n c e r n r e l a t i n g t o t h e s o u r c e s o f t h e m a t e r i a l p o s t e d b y G r a y,
w h o i n t u r n e x p l ai n e d t h a t t h e m a t er i a l w a s g a t h e r e d u s i n g
w a s r e s o l v e d . “ T h e p r o c e s s t o o k l e s s t h a n o n e m o n t h an d a t
v i r t u a l l y n o c o s t t o e i t h e r o f t h e p a r t i e s ” . 346 A m o n g t h e i n i t i at o rs
of the OOO were Professors Ethan Katsh and Janet Rifkin, who
“SquareTrade” project.
345
VICTORIO M. Richard, op. cit., pp. 7, 8.
346
HANG Q. Lan, op. cit., p. 847.
204
S e c t i o n 3 : Cy b e r T ri b u n a l
“ C yb e r T r i b u n a l ” w a s a n ex p e r i m e n t al p r o j e c t l a u n c h e d i n
1 9 9 6 b y t h e U n i v er s i t y o f M o n t r e a l ’ s “ C e n t r e d e r e c h e r c h é e n
d r o i t p u b l i c ” (C R D P ) a n d i t s m a i n g o a l w a s t o d et e r m i n e
w h e t h e r o r n o t d i s p u t e s c o u l d b e s u cc e s s f u l l y r e s o l v e d i n a n
a n d a r b i t r a t i o n . T h e “ C yb e r T r i b u n a l ” m e d i a t o r s a n d a r b i t r a t o r s
c o m m e r c i a l a r b i t r at i o n a n d i n f o rm a t i o n t e c h n o l o g y l a w . T h e
procedure included two steps but this time the methods were
m e d i a t i o n a n d a r b i t r a t i o n . “ C yb e r T r i b u n a l ” p r o v i d e d e a s y- t o - u s e
t o r e a c h s e t t l e m e n t . If t h e p a r t i e s c o u l d n o t r e a c h a n am i c a b l e
s e t t l e m e n t t h r o u g h m e d i a t i o n , “ C yb e r T r i b u n a l ” h a d a s e c o n d
s t e p i n w h i c h t h e p a r t i e s w o u l d p r o c e e d t o a r b i t r a t i o n , s i n ce t h e y
M o r e s p e c i f i c a l l y, i n m e d i a t i o n , i n o r d e r f o r t h e p r o c e d u r e
t o b e i n i t i at e d , o n e o f t h e p a r t i e s c o n t a c t e d t h e p r o v i d er a n d
p e r s o n a l i n f o r m at i o n a n d i n f o r m a t i o n re g a r d i n g t h e f a c t s o f t h e
205
“ C yb e r T r i b u n a l ” w o u l d t h e n a s s i g n a m e d i a t o r t o t h e c a s e w h o
w o u l d c o n t a c t t h e o t h e r p a r t y a n d i f t h e l at t e r a g r e e d , t h e
r e s o l u t i o n p r o c e d u re w o u l d b e g i n . U s u a l l y t h e r e w a s a p r i o r
p r o c e d u r e w a s i n i t i a t e d , “ C yb e r T r i b u n a l ” p r o v i d e d a s e c u r e
a r b i t r a t i o n , s u c h as t h e a r b i t r a t i o n r u l e s d e v e l o p e d b y t h e
( U N C IT R A L) a n d t h e ‘ In t e r n a t i o n a l C h a m b e r o f C o m m e r c e ’
( IC C ) ” . 347 T h e “ C yb e r T r i b u n a l ” p r o j e c t r e s o l v e d h u n d r e d s o f
347
BENYEKHLEF Karim and GELINAS Fabien, op. cit., p. 93.
206
Section 4: EBay and SqaureTrade
In 1 9 9 9 , t h e o n l i n e a u c t i o n s i t e “ e B a y” 348 a s k e d t h e
“ C e n t e r f o r In f o r m a t i o n T e c h n o l o g y a n d D i s p u t e R e s o l u t i o n ” a t
e B a y’ s b u ye r s a n d s e l l e r s . T h e r e s u l t w a s t h e U n i v e r s i t y o f
a n d w a s c o n s i d e r e d f a i r l y s u c c e s s f u l . T h e s u c c e s s o f t h i s i n i t i al
p a r t n e r s h i p b e t w e e n “ e B a y” a n d “ S q u a r e T r a d e ” e n d e d i n 2 0 0 8 .
p r o v i d e r i n c o n s u m e r d i s p u t e s a n d t h e r e f o r e i t s ex a m i n a t i o n
p r e s e n t s a g r e a t a n a l yt i c a l i n t e r e s t f r o m a r e s e a r c h e r ’ s p o i n t o f
v i e w s i n c e i t s i g n i f i c a n t l y f u r t h e r e d t h e d e v e l o p m e n t o f O DR .
348
“EBay is an online auction site created in 1995 by Pierre Omidyar as a way to improve online
classifieds and allow users on the internet from anywhere in the world to buy or sell personal items
faster and easier. The EBay Company was founded in 1996 and since then has grown from a small
start up to multibillion dollar company making it one of the most successful examples of
ecommerce with experience in business-to-business, business-to-consumer, and consumer-to-
consumer transactions. EBay has made numerous acquisitions over the years, including the PayPal
payment service in 2002. More than forty-five billion dollars in merchandise is sold on eBay each
year and eBay has more than ninety-million active buyers and sellers, in 16 languages and 36
countries around the globe”. See DUCA D. Louis, RULE Colin, LOEBL Zbynek, op. cit., pp. 66,
68.
207
“SquareTrade” has proven that mechanisms such as online
u s e d t o r e s o l v e e -c o m m e r c e d i s p u t e s . “ S q u a r e T r a d e ” h a n d l e d
d i s p u t es b e t w e e n s e l l e r s a n d b u ye r s o n e B a y r e l a t e d t o a s p e c i f i c
d e l a ys , i m p r o p e r s e l l i n g p r a c t i c e s , u n s a t i s f a c t o r y s e r v i c e s , b a d
d e s c r i p t i o n s a n d n e g a t i v e f e e d b a c k . 349 It s g r e a t s u c c e s s w a s
m a i n l y b a s e d o n t wo r e a s o n s . F i r s t , t h e f a c t t h a t “ S q a u r e T r a d e ”
p o s s i b l e t o c r e a t e a n a u t o m a t e d p r o c e s s t h a t g u a r a n t i e d a cc u r a c y
d i s p u t es b e t w e e n u s e r s t h a t w o u l d o t h e rw i s e h a v e n o r e d r e s s a n d
w e r e c o m p e l l e d t o p a r t i c i p a t e b e c a u s e o f t h e f e e d b a c k s ys t e m ;
g o o d r e p u t a t i o n i n t h e “ e B a y” c o m m u n i t y a n d b u ye r s w a n t e d
redress.
w i t h o u t t h e i n v o l v em e n t o f a t h i r d n e u t r a l p a r t y. A u s e r c o u l d
f i l e a c o m p l a i n t t h ro u g h t h e w e b s i t e a n d i n i t i a t e t h e n e g o t i a t i o n
349
WANG Fangfei Faye, op. cit., p. 65.
208
t h e o t h e r p a r t y, w h o w o u l d t h e n b e a b l e t o r e s p o n d t o t h e
c o m p l a i n t . Al l c o rr e s p o n d e n c e t o o k p l a c e t h r o u g h a s e c u r e ,
a c c e s s a n d c o u l d co m m u n i c a t e t o r e s o l v e t h e i r d i s p u t e . Fo r t h e
p r o v i d e d s t r u c t u r e t h r o u g h w e b - b a s e d s o f t w a r e a n d f o r m s t h at
and this way pinpoint the problem more clearly and spare the
w i l l i n g t o n e g o t i a t e v i a t h e W e b t h a n em a i l a n d t h e n e g o t i a t i o n s
“almost all eBay disputes fall into eight to ten categories and
a m o u n t o f f r e e t ex t f o r c o m p l a i n i n g a n d d e m a n d i n g , a l t h o u g h
s t i l l a l l o wi n g p a r t i e s t o d e s c r i b e c o n ce r n s i n t h e i r o w n w o r d s ,
a n d l o w e r e d t h e a m o u n t o f a n g e r a n d h o s t i l i t y b e t w e e n t h e m ”. 350
s o l u t i o n s t o t h e p ro b l e m s . T h e s o f t w ar e i l l u s t r a t e d h o w t h e u s e
o f IC T t o o l s c o u l d t r u l y b e t h e “ f o u r t h ” p a r t y i n t h e r e s o l u t i o n
p r o c e s s s i n c e i t a s s i s t e d p a r t i e s t o r e fo r m u l a t e t h e p r o b l em a n d
350
KATCH Ethan, Online Dispute Resolution: Some Implications for the Emergence of Law in
Cyberspace, Lex Electronica, vol.10 n°3, 2006, pp. 4, 5.
209
the solution and allowed to focus more on the solution rather
t h a n t h e p r o b l e m . 351 Th e m a j o r i t y o f t h e d i s p u t es , a p p r o x i m at e l y
n e e d t o r e s o r t t o m ed i a t i o n . 352
If t h e f i r s t s t e p d i d n o t l e a d t o a n a m i c a b l e r e s o l u t i o n o f
the dispute, there was a second step where the parties could
r e q u e s t t h e i n v o l v em e n t o f a n e u t r a l t h i r d p a r t y t h o u g h a n o n l i n e
r e q u e s t t h e m e d i at o r r e c o m m e n d e d p o s s i b l e s o l u t i o n s fo r t h e
c o n f i d e n t i a l a n d b ec a m e b i n d i n g a s c o n t r a c t s . B u s i n e s s e s w h o
c o u l d p u r c h a s e a “ S q u a r e T r a d e ” s e a l w h i c h c o u l d b e p l ac e d o n
t h e w e b s i t e o f o n l i n e b u s i n e s s e s . T h e s e a l o r T r u s t m a r k as s u r e d
351
“Moving the parties from a problem mode to a solution stance”. See RABINOVICH-EINY
Orna, ‘Technology’s Impact: The Quest for a New Paradigm for Accountability in Mediation’,
Harvard Negotiation Law Review, vol. 11, 2006, p. 258.
352
KATSH Ethan and RIFKIN, Janet, op. cit., p.142.
353
MOEVES S. Amy and MOEVES C. Scott, op. cit., p. 19.
210
p o t e n t i al u s e r s t h a t t h e r e i s a n e a s y a n d s e c u r e w a y o f r e c o u r s e
i n c a s e t h e t r a n s a c t i o n p r o v e d p r o b l em a t i c a n d t h i s w a y b u i l d
c o n f i d e n c e a n d t r u s t i n t h e o n l i n e e n v i r o n m e n t . 354 S q u a r e T r a d e
“ P a yP a l ” . 355 D u r i n g t h e t i m e i t o p e r a t ed a s a n O D R p r o v i d e r,
c o u n t r i e s i n f i v e d i f f e r e n t l a n g u a g e s a n d e m p l o ye d a r o u n d 2 0 0
m e d i a t o r s f r o m o v e r 1 5 d i f f e r e n t c o u n t ri e s . 356
“ S q u a r e T r a d e ” e n d e d i n J u n e 2 0 0 8 f ro m w h i c h p o i n t t h e l a t t e r
s t o p r e s o l v i n g “ e B a y” f e e d b a c k d i s p u t e s . T o d a y, “ S q u a r e T r a d e ”
s e r v i c e s a n d t h e T r u s t m a r k p ro g r a m b u t a s f a r a s t h e O D R
c u r r e n t l y p r o v i d e d b y “ e B a y” a n d “ P a yP a l ” d i s p u t e r e s o l u t i o n
s e r v i c e s . In 2 0 0 9 , “ e B a y” a d d e d t h e d i s p u t e r e s o l u t i o n s e r v i c e s
p l a t f o r m c a l l e d “ eB a y B u ye r P r o t e c t i o n P o l i c y” . T h i s O D R
s c h e m e a l l o w s b u ye r s t o i n i t i at e a d i s p u t e r e s o l u t i o n p r o c e d u r e
354
MANEVY Isabelle, op. cit., p. 17.
355
SHAH Aashit, op. cit., p. 3.
356
CORTES Pablo, op. cit., pp. 66, 68.
211
item was received but did not match the seller's description; in
s h o r t i t h a n d l e s t wo k i n d s o f d i s p u t es d e s c r i b e d a s " i t e m n o t
t r a n s a c t i o n v o l u m e o n t h e s i t e i n c r e a s e s , a b o u t 1 3 % p e r ye a r .
“ T h e s e d i s p u t e s h av e a n a v e r a g e v a l u e o f $ 7 0 - 1 0 0 a n d t h e y a r e
c o m m u n i c a t i o n ” . 358
S e c t i o n 5 : T h e I n te r n e t C o r p o r a t i o n f o r A s s i g n ed N a me s a n d
N u mb e r s ( I C A N N )
357
“The types of claims for buyers offered for resolution under the policy include: The buyer did
not receive the items within the estimated delivery date, or the item received was wrong, damaged,
or different from the seller’s description. For example: Buyer received a completely different item;
the condition of the item is not as described; the item is missing parts or components; item is
defective during the first use; the item is a different version or edition displayed in the listing; the
item was described as authentic but is not; the item is missing major parts or features, and this was
not described in the listing; the item was damaged during shipment; the buyer received the
incorrect amount of items”. See DUCA D. Louis, RULE Colin, LOEBL Zbynek, op. cit., pp. 66,
68.
358
Ibid., p. 68.
212
auspices of the Department of Commerce and was called the
( IC A N N ) . IC A N N ’ s a i m w a s t h e s e t t l em e n t o f d i s p u t e s r e l a t i n g
t o d o m a i n n am e s . 359 H o w e v e r , IC A N N i s n o t a n O D R p r o v i d er
d i s p u t es , a s w e l l a s t h e r u l e s f o r t h e re s o l u t i o n o f t h e d i s p u t e s .
IC A N N i m p l e m e n t ed t h e “ U n i f o r m D i s p u t e R e s o l u t i o n P o l i c y”
r e s o l v i n g d o m a i n n am e d i s p u t e s .
T h e U D R P i s n o t cl a s s i c a r b i t r a t i o n b u t c o r r e s p o n d s m o re
awarded and the only decision concerns the right to use the
a d d i t i o n a l a n d a l t er n a t i v e f o r u m f o r d i s p u t e r e s o l u t i o n , w h i c h ,
359
“For the Internet to function, every computer connected to it must have a unique identifying
number or Internet address. Such addresses typically look something like 128.119.28.27. Because
humans find it difficult to remember strings of numbers, a system was developed that allowed a
domain name, such as adr.org, to be typed in instead of the number string. What occurred when
someone typed in the domain name was that a machine somewhere translated it into the number
string, something the computer could process to find a particular machine. The demand for domain
names grew as commercial activity on the Internet grew and as businesses wanted potential
customers to have an easy way to find them. The domain name system had been designed before
commercial activity was permitted on the Internet and it had not been anticipated that many
businesses with similar names might want the same domain name, or that owners of trademarks
would be upset if someone registered a domain name that was similar to a trademark. The
combination of domain name scarcity and the concerns of trademark holders led to disputes over
domain names.” See KATCH Ethan, Online Dispute Resolution: Some Implications for the
Emergence of Law in Cyberspace, op. cit., pp. 5, 6.
213
h o w e v e r , s t i l l al l o w s p a r t i e s t o r e c o u r s e t o c o u r t a t a n y t i m e. 360
T h e d i s p u t e r e s o l u t i o n p r o f e s s i o n a l s a re c a l l e d p a n e l i s t s i n s t e a d
b y t h e U D R P . U DR P p a n e l i s t s a r e em p o w e r e d b y t e r m s i n t h e
d o m a i n n a m e r e g i s t r y. T h e U D R P p r o c e d u r e c o n s t i t u t e s a n
e f f i c i e n t O D R s ys t e m w i t h a n e v i d e n c e b a s e d p r o c e s s t h a t l i m i t s
t h e r e s u l t s t o t h e c a n c e l l a t i o n o r t r an s f e r o f a d o m a i n n a m e
b e t w e e n 2 , 0 0 0 $ a n d 5 , 0 0 0 $ a n d t h e re s o l u t i o n t a k e s u p t o 6 0
d a ys w h e r e a s t h r o u g h t r a d i t i o n a l j u d i c i a l m e c h a n i s m s t h e c o s t
c o m e s t o a n a v e ra g e o f 1 5 , 0 0 0 $ a n d c a n t a k e u p t o t h r e e
ye a r s ” . 361 S i n c e 1 9 9 9 , IC A N N h a s a c c r e d i t e d s e v e r a l d i s p u t e
r e s o l u t i o n p r o v i d e rs t o r e s o l v e In t e r n e t d o m a i n n a m e d i s p u t e s
214
R e s o l u t i o n ” , t h e “ C e n t e r f o r P u b l i c R e s o u r c e In s t i t u t e ” ( C P R )
world.
T h e f i r s t a w a r d w a s r e n d e r e d o n 2 0 0 0 b y t h e W IP O
A r b i t r a t i o n a n d M ed i a t i o n C e n t e r i n t h e c a s e W o r l d W r es t l i n g
“ w o r l d w r e s t l i n g f e d e r a t i o n . c o m ” d o m a i n n a m e , w a s s a t i s fi e d b y
s ys t e m i s c o n s i d e re d a f a i r l y s u c c e s s f u l ex a m p l e o f O n l i n e
D i s p u t e R e s o l u t i o n . 362
362
BENYEKHLEF Karim and GELINAS Fabien, op. cit., pp. 29-36.
215
Chapter 3
t r a n s a c t i o n s a n d e- c o m m e r c e , b y o v e r c o m i n g s e v e r a l o f t h e
p r o b l e m s r e l at e d t o t r a d i t i o n a l j u s t i ce , a s w e l l a s t r a d i t i o n al
A D R . O D R m a k e s p o s s i b l e t h e r e l o c a t i o n o f t h e t r a d i t i o n al
m e t h o d s o f a l t e r n a t i v e d i s p u t e r e s o l u t i o n f r o m t h e p h ys i c a l t o
t h e v i r t u a l w o r l d . 363 O D R i s a u s e f u l t o o l , w h i c h h e l p s t h e p a r t i es
t o a s s i s t t h e c o m m u n i c a t i o n b e t w e e n t h e p a r t i e s . 364 H o w e v e r , t h e
u s e o f IC T t o r e s o l v e d i s p u t e s c h a n g e s t h e w a y i n w h i c h p a r t i e s
c o m m u n i c a t e a n d i n t e r a c t . T h e r e a r e p r o s a n d c o n s w h en u s i n g
IC T ; t h e o b j e c t i v e i s t o d e s i g n O D R p l a t f o r m s t h at m ax i m i z e t h e
p r o s a n d m i n i m i z e t h e c o n s . 365 N e g o t i a t i n g , m e d i a t i n g an d
a r b i t r a t i n g t h r o u g h t h e In t e r n e t m e d i u m h a v e s e v e r a l i m p o r t a n t
ease of application.
363
BELLUCCI Emilia, LODDER R. Arno and ZELEZNIKOW John, Integrating artificial
intelligence, argumentation and game theory to develop an online dispute resolution environment,
ICTAL ,18TH IEEE International Conference on Tools with Artificial Intelligence, 2004, pp. 749-
754.
364
GLASS M. Carolyn, Online counseling: A descriptive analysis of therapy services in the
Internet, British Journal of Guidance and Counseling, vol. 34, 2006, pp. 145-160.
365
RULE Colin, op. cit., p. 85.
216
In c yb e r s p a c e t h e r e i s n o u n i f o r m l e g a l a n d c o u r t s ys t e m
w h i c h m a k e s t h e r e s o l u t i o n o f d i s p u t e s q u i t e p r o b l e m at i c . T h e
In t e r n e t i s g l o b a l a n d w i t h o u t b o rd e r s w h i c h h a m p er s t h e
r e s o l u t i o n o f d i s p u t e s b y t h e t r a d i t i o n al c o u r t s o f a n y s t a t e a n d
p r e s e n t s s u b s t a n t i al d i f f i c u l t i e s r e g a r d i n g t h e c h o i c e o f t h e
d e c i s i o n s . In t h e c o n t e x t o f e - c o m m e r c e , “ t h e l a c k o f w e l l -
j u r i s d i c t i o n al p r o b l e m s . B u t , O D R g o es o n e s t e p f u rt h e r a n d b y
t r a n s f e r r i n g A D R s e r v i c e s t o t h e o n l i n e e n v i r o n m e n t i n cr e a s e s
t h e c e l e b r a t e d a d v a n t a g e s i n t e r m s o f c o s t , t i m e , f l ex i b i l i t y a n d
i n v o l v e a n y l o s s e s ” . 367
366
PONTE M Lucille, Boosting Consumer Confidence in E-business: Recommendations for
Establishing Fair and Effective Dispute Resolution Programs for B2C Online Transactions,
Albany Law Journal Science and Technology, vol. 12, 2002, p. 441.
367
BENYEKHLEF Karim and GELINAS Fabien, op. cit., p. 85.
217
S e c t i o n 1 : Ad v a n t a g e s o f O n l i n e D i s p u t e R e s o l u ti o n
O D R h a s t o o f f e r g r e a t a d v a n t a g e s f o r p a r t i e s , t h i rd
c o n s u m e r s . In t h e f i r s t p a r t o f t h e t h e s i s t h e a d v a n t a g e s o f
t r a d i t i o n a l A D R w e r e e x a m i n e d . 368 T h e s e a d v a n t a g e s n o t o n l y
c o s t s a v i n g s , c o n v en i e n c e a n d f l e x i b i l i t y. T h e u s e o f t h e I n t e r n e t
t o r e s o l v e d i s p u t e s c a n s p e e d u p t h e p ro c e d u r e s i n c e p a r t i es h a v e
m o r e o p t i o n s w h e n u s i n g O D R ; i n f o rm a t i o n a n d e v i d e n c e i s
a s yn c h r o n o u s c o m m u n i c a t i o n , w h i c h a d d s t o t h e o v e r a l l p ro c e s s
t o w a r d s t h e r e s o l u t i o n a t a n y t i m e , t w e n t y- f o u r h o u r s a d a y ,
s e v e n d a ys a w e e k , a n d n o t j u s t d u r i n g w o r k i n g h o u r s o r d u r i n g
r e s o l v e t h e d i s p u t e. T h e u s e o f d i s t a n c e c o m m u n i c a t i o n a l l o w s
368
See supra at advantages of ADR.
218
p a r t i e s t o r e s o l v e d i s p u t es w i t h o u t t h e n e e d t o t r a v e l a n d t h e
a s yn c h r o n o u s c o m m u n i c a t i o n a l l o w s f o r a d i s p u t e r es o l u t i o n
a c c e s s i b l e . 369
A. Time savings
O n e o f t h e g r e a t a d v a n t a g e s o f O D R i s t h at i t o f f e rs
already less time consuming and costly than litigation. But ODR
i s e v e n l e s s t i m e c o n s u m i n g a n d c o s t l y t h a n t r a d i t i o n al A D R .
D i s p u t e s , w h i c h i n t h e p a s t r e q u i r e d m o n t h s o r ye a r s t o b e i n g
r e s o l v e d , w i t h O DR t h e y m a y n o w r e q u i r e o n l y d a ys o r h o u r s .
When a dispute arises, the parties using ODR have the ability to
l i t i g a t i o n o r t r a d i t i o n a l A D R . In f a c t t h e p a r t i e s c a n s t a r t t h e
r e s o l u t i o n p r o c e s s al m o s t i m m e d i a t e l y i n s t e a d o f w a i t i n g m o n t h s
219
a g r e e t o a l l t h e d et a i l s (s u c h a s s el e c t i n g t h e v e n u e , t h e A D R
l i t i g a n t s a n d t r a d i t i o n a l A D R s ys t e m s b e c o m e l e s s e f f i c i e n t w i t h
e a c h p a s s i n g d a y, O D R i s m u c h f as t e r a n d c a n b e i n i t i a t ed
a l m o s t i n s t a n t l y a f t e r t h e d i s p u t e a r i s es , “ s i n c e a v i r t u a l m e e t i n g
r o o m c a n b e o p en e d i n s t a n t a n e o u s l y a n d a n e u t r a l c a n b e
e n g a g e d f r o m a n yw h e r e a r o u n d t h e w o r l d ” . 371 E s p e c i a l l y t o d a y
“ b r o a d b a n d c o n n e c t i o n s ” , w i r e - l e s s In t e r n e t a n d s m a r t p h o n e s
v i d e o c o n f e r e n c e s , s a v i n g c o n s i d e r a b l e t i m e a n d m o n e y. O D R
s ys t e m s c a n i n s t a n t l y p r o v i d e a v i r t u a l r o o m , f o r p a r t i e s t o
c o m m u n i c a t e a t a n y t i m e a n d f r o m a n yw h e r e i n t h e w o r l d a n d t o
w o r k t o w a r d s t h e r es o l u t i o n o f t h e i r d i s p u t e . “ It t a k e s a n a v e r a g e
t r a d i t i o n a l A D R ” . 372 In t h e c a s e o f e - c o m m e r c e d i s p u t e s , t i m e
s a v i n g s a r e i n v a l u a b l e f o r b o t h c o n s u m e r s a n d b u s i n e s s es , s i n c e
370
HANG Q. Lan, op. cit., pp. 856- 859.
371
RULE Colin, op. cit., p. 63.
372
BENYEKHLEF Karim and GELINAS Fabien, op. cit., p. 86.
220
escalation and the addressing of grievances before they evolve
i n t o f o rm a l c o n f l i c t s . 373
B. Cost savings
s i g n i f i c a n t c o s t s a v i n g s c o m p a r e d t o l i t i g a t i o n a n d c o m p ar e d t o
t r a d i t i o n a l A D R , b o t h o f w h i c h c a n b e q u i t e e x p e n s i v e . 374 A g a i n ,
traditional ADR was already less costly than litigation and ODR
e v e n f o r t h o s e t h a t d o n o t h a v e ye t a c c e s s , b u yi n g a c o m p u t e r
a n d g a i n i n g In t e r n e t a c c e s s b e c o m e s c h e a p e r a s e a c h d a y p a s s e s .
373
RULE Colin, op. cit., p. 77.
374
G. H. Friedman, (1997) Alternative Dispute Resolution and Emerging Online Technologies:
Challenges and Opportunities, Hastings Communications and Entertainment Law Journal, vol. 19
pp. 695- 712.
221
The main reason why ODR is less costly is because overall
e x p e n s e s a r e o f t e n m u c h l o w e r a n d m ai n l y b e c a u s e t h e r e a r e n o
t r a v e l e x p e n s es . O D R a l l o w s p a r t i e s w h o a r e l o c a t e d i n m u l t i p l e
c o u n t r i e s o r d i f f e r e n t t i m e z o n e s , o r wh o c a n n o t a g r e e o n a t i m e
o r p l a c e , t o m e e t w i t h o u t t r a v e l a n d r e l a t e d e x p e n s e s . 375 It i s
a t t h e s p e e d o f a u t o m o b i l e o r a i r p l an e , i t w i l l o c c u r b o t h a t
c h e a p e r c o s t a n d f a s t e r ” . 376 O D R i s 3 5 - 6 0 % c h e a p e r t h a n j u d i c i al
a r b i t r a t i o n , t h e e n fo r c e a b l e n a t u r e o f t h e a w a r d s a v e s f r o m t h e
c o s t o f a p p e a l s o f o t h e r r e s o l u t i o n s m e t h o d s . In t h e c a s e o f e -
c o m p a n y. 378 M o d e r n b u s i n e s s a r e o p e r a t i n g w o r l d w i d e a n d a r e
facing countless disputes all over the world, many among them
a r e r e l a t i v e l y s m a l l d i s p u t e s a n d i t w o u l d t o o ex p e n s i v e , t i m e -
375
WANG Fangfei Faye, op. cit., p. 28, 29.
376
KATCH Ethan, RIFKIN Janet and GAITENBY Alan, E-commerce, e-disputes, and e-dispute
resolution: in the shadow of ‘eBay Law’, Ohio State Journal of Dispute Resolution, vol. 15, 2000,
p. 727.
377
BENYEKHLEF Karim and GELINAS Fabien, op. cit., p. 86.
378
RULE Colin, op. cit., p. 77.
222
an attempt to resolve each of these disputes. On the contrary
t o v i e w i s v i rt u a l l y e f f o r t l e s s , f a s t a n d c h e a p w h e r e a s t h e
d o c u m e n t a t i o n r e q u i r e d i n t h e o f fl i n e w o r l d c r e a t e s m o u n t a i n s o f
p a p e r a n d s p e n t c a s h . 379
C. Access to justice
t i m e c o n s u m p t i o n , 380 i l l u s t r a t i n g t h a t O D R m a y b e t h e o n l y
d i s t a n c e s 381 o r f o r p e r s o n s o f t e n e n g a g e d i n e - c o m m e r c e a n d
379
VICTORIO M. Richard, op. cit., p. 12.
380
BATES M. Donna, op. cit., p. 854.
381
BORDONE C. Robert, Electronic Online Dispute Resolution: A Systems Approach - Potential
Problems and a Proposal, Harvard Negotiation Law Review, vol. 3, 1998, p. 176.
223
involved in low values disputes where the parties cannot meet
f a c e t o f a c e u n l e s s t h e y s p e n d a s u b s t a n t i a l a m o u n t o f m o n e y,
often more than the value of the dispute; there are no travel and
d i s p u t es a r e f r e q u e n t l y h i g h e r t h a n t h e v a l u e o f t h e d i s p u t e”. 382
O D R r e d u c e s t i m e d e l a ys a n d c o s t s , e s p e c i a l l y t h o s e r e l a t e d t o
O D R a n d c o n s e q u e n t l y a c c e s s t o j u s t i c e.
a d d r e s s e d i n t r a d i t i o n a l f a c e t o f a c e AD R . A l t h o u g h i m p o s s i b l e
e n v i r o n m e n t w h e r e b i a s c a n b e r e m o v ed a s a f a c t o r i n b u i l d i n g
yo u n g . 383 F i n a l l y, O D R p r o v i d e s a c c e s s t o j u s t i c e b y r e d u c i n g
c o m m u n i c a t i n g t h r o u g h t h e a s yn c h r o n o u s a n d t ex t u a l m e d i u m o f
382
HÖRNLE Julia, op. cit., pp. 89, 90.
383
RULE Colin, op. cit., p. 68.
384
HÖRNLE Julia, op. cit., pp. 89, 90.
224
c o m m u n i c a t i o n . 385 P a r t i e s a r e n o t i n t i m i d a t e d w h e n t h e r e i s a
power imbalance and also can more effectively save face after
t h e O D R p r a c t i t i o n e r f u r t h e r b y r e n d e r i n g i n e f f e c t i v e a p a r t y' s
‘ c o n f e r e n c e t a b l e i n c yb e r s p a c e ’ d e n i e s a d o m i n a t i n g p a r t y t h e
p o t e n t i al t o ex p l o i t t h e ‘ h o m e c o u r t a d v a n t a g e ’ ” . 386
385
“Research into the use of email in organizations has found that lower-level employees are
willing to send emails to upper management with comments and observations that they would be
uncomfortable saying in person. I’ve spoken with parents who had a very difficult time
communicating with their children when they are in the same house, yet after they send their
children off to college, a rich email correspondence began. The parent and child were not able to
communicate face-to-face partially because of the power dynamic between the two of them. Many
husbands and wives get into similar communication patterns based on the relative power in their
relationship, and when they begin to communicate textually through an online interface it’s
different enough from the normal modes of communication that they’re able to break out of those
patterns”. See RULE Colin, op. cit., pp. 64, 65.
386
VICTORIO M. Richard, op. cit., pp. 14, 15.
225
D. Convenience
t i m e c o n s u m i n g a n d c o s t l y, b u t a l s o o f f e r s p a r t i e s a s o l u t i o n i n a
w a y t h a t p r o v i d e s co n v e n i e n c e a n d e a s e . T h e r o l e o f t e c h n o l o g y
a n d t i m e 387 a n d p r o v i d i n g c o m f o r t a n d a c c e s s i b i l i t y, g i v i n g e a s y
a c c e s s f r o m h o m e o r t h e w o r k p l a c e t h ro u g h o u t d a y a n d n i g h t . 388
C o n v e n i e n c e r e l a t e s t o a v a i l a b i l i t y. In i t i a l l y O D R m a k e s i t
easier to start the process just by the click of a button and users
can initiate the process and be provided with all the necessary
i n f o r m a t i o n w i t h o u t h a v i n g t o r e s o r t t o s o m e p h ys i c a l o f f i c e o f
the provider during office hours, but instead all can be done
f r o m t h e c o m f o rt o f t h e p a r t y’ s h o m e 2 4 h o u r s a d a y, 7 d a ys a
w e e k , b y f i n d i n g t h e a p p r o p r i a t e s i t e an d f i l l i n g o u t a w eb f o r m
o r w r i t i n g a n e - m a i l , w i t h o u t d e l a ys a s s o c i a t e d w i t h w a i t i n g f o r
o f a l l m a t e r i al s i s d i r e c t l y a c c e s s i b l e . 389
387
KLAMING Laura, VEENEN V. Jelle, LEENES Ronald, I want the opposite of what you want:
summary of a study on the reduction of fixed - pie perceptions in online negotiation. ‘’Expanding
the horizons of ODR‘’, Proceedings of the 5th International Workshop on Online Dispute
Resolution (ODR Workshop ’08), 2008, pp. 84-94.
388
MELAMED Jim and HELIE John, The World Wide Web Main Street of the Future is there
Today, 1999, available at http://www.mediate.com/articles/jimmjohn.cfm
389
VICTORIO M. Richard, op. cit., p. 13.
226
P a r t i c u l a r l y i n t h e w o r l d o f o n l i n e co m m e r c e , i t i s o n l y
n a t u r a l t o r e s o l v e d i s p u t es o n l i n e , s i n c e t h e r e l a t i o n s h i p o f t h e
makes sense and it is only natural to use the same medium for
w i t h b u s i n e s s e s p u re l y o n l i n e , w o u l d f i n d i t v e r y s t r a n g e i f t h e y
e f f o r t f r o m t h e p ar t i e s i s c a l l e d “ c o n v e n i n g p e n a l t y” . 390 O DR
c o m m u n i c a t i o n b e t w e e n m u l t i p l e u s er s v i a e - m a i l , c h at a n d
comfortable.
time and cost savings; parties and practitioners need not travel
a s s i s t i n g t h e p a r t i e s a f t e r k e y c o m m u n i c a t i o n s . 391 T h e p a r t i e s c an
s t a y c o n n e c t e d t o t h e d i s c u s s i o n b y r e s p o n d i n g a t a v a i l a b l e t i m es
390
“In a face-to-face process, the participants must dress up, take time off of work, travel perhaps
long distances to the meeting place, and spend hours discussing the issues underlying the dispute”.
See RULE Colin, op. cit., p. 69.
391
Ibid., p. 62.
227
and have also the ability to postpone their response to consult
w i t h o t h e r s , d o r e s ea r c h , l o o k a t t h e d at a , o r j u s t “ t a k e t h e t i m e
n e e d e d t o f o rm u l a t e c a l m , c o n s t r u c t i v e q u e s t i o n s a n d a n s w e r s
a n d p r o d u c e t h e i r b e s t r e s p o n s e ” . 392 C o m m u n i c a t i o n i s r e c o r d ed
revisit all the available information so that they can make their
n o f o r m a l a p p e a l p ro c e d u r e e x i s t s ” . 393
c o m m u n i c a t i o n c o m b i n e d wi t h t h e a b i l i t y f o r a s yn c h r o n o u s
e s c a l a t i o n o f t h e d i s p u t e . 394 T h e a s yn c h r o n o u s n a t u r e o f o n l i n e
e f f e c t i v e l y, m a k e c o n f r o n t a t i o n l e s s i n t e n s e a n d t h e p r o c e s s
m o r e p r o d u c t i v e ; p ar t i e s c a n r e f l e c t o n a n i s s u e , c o m m u n i ca t e i n
392
RAINES S. Susan and TYLER C. Melissa, op. cit., p. 6.
393
WANG Fangfei Faye, op. cit., p. 29.
394
HÖRNLE Julia, op. cit., p. 89.
228
a c o n s i d e r e d w a y a n d “ b e a t t h e i r b e s t ” . 395 T h i s l a c k o f p e r s o n al
e m o t i o n al i n v o l v em e n t o f t h e p a r t i e s i s s o h i g h t h at i t i s
p r e f e r a b l e t h a t t h e y d o n o t s e e e a c h o t h e r ” . 396 T h e a b s e n c e o f
p h ys i c a l p r e s e n c e p r o v i d e s t h e p a r t i e s w i t h a d i s p a s s i o n at e w a y
a s yn c h r o n o u s c o m m u n i c a t i o n v i a e - m a i l a l l o w s p a r t i e s t i m e t o
r e f l e c t o n t h e i r p o s i t i o n s b e f o r e a r t i cu l a t i n g t h e m w i t h o u t t h e
t i m e p r e s s u r e o f a n i m m e d i a t e c o n f ro n t a t i o n a n d t h e w r i t t e n
e m o t i o n al h o s t i l i t y a n d d i m i n i s h i n g e x p r e s s i o n s o f p o w e r o r
b i a s . 397
395
“This dynamic has come to be called cooling distance”. See RULE Colin, op. cit., pp. 66, 67.
396
WANG Fangfei Faye, op. cit., p. 29.
397
VICTORIO M. Richard, op. cit., pp. 14, 15.
229
E. Flexibility
B e s i d e s t h e c o n v e n i e n c e a n d t h e f a s t e r d e c i s i o n s , 398 ODR
a l l o w s f o r g r e a t e r f l e x i b i l i t y a n d m o r e c r e a t i v e s o l u t i o n s . 399 T h e
i n f o r m a l n at u r e o f O D R b u i l d s a t ru s t i n g e n v i r o n m e n t t h a t
f o s t e r s s e t t l e m e n t a n d e n c o u r a g e s h o n e s t y, w h e r e p a r t i e s s t a r t
f o r “ a g r e a t e r c o n t r o l o v e r p r o c e s s e s a n d t h e d e c i s i o n an d t h e
r u l e s o f e v i d e n c e d o n o t a p p l y s o p r o c e d u r e s a r e m o r e f l e x i b l e. 400
H e n c e p a r t i e s c a n r e a c h a n y t yp e o f a g r e e m e n t w i t h o u t t h e
a n d t h e n e u t r a l t h i rd p a r t y h a v e t h e f l e x i b i l i t y t o c h o o s e f o r m s
o f c o m m u n i c a t i o n m o r e t a i l o r e d t o t h e c i r c u m s t a n c e s ” . 401
T h e f l ex i b i l i t y o f O D R a l l o ws p a r t i e s n o t o n l y t o c h o o s e
t h e m o s t c o n v e n i e n t p r o c e d u r e , b u t al s o a s i n A D R , s el e c t t h e
m o s t c o n v e n i e n t t h i r d n e u t r a l , w h o c a n a l s o b e a n e x p e rt o n a
398
COM (2002) 196 final, Alternative Dispute Resolution for Online Consumer Transactions,
Public Workshop, Federal Trade Commission / Department of Commerce, June 6-7, 2000. Green
paper on alternative dispute resolution in civil and commercial law , presented by the
Commission.
399
KAUFMANN-KOHLER Gabrielle and SCHULTZ Thomas, op. cit., p. 68.
400
PONTE M. Lucille and CAVENAGH D. Thomas, op. cit., p. 24.
401
BENYEKHLEF Karim and GELINAS Fabien, op. cit., p. 87.
230
specific field. As in ADR, also in ODR parties can choose a
e q u i t a b l e s o l u t i o n t h a n c o u l d b e a c h i e v e d i n c o u r t . 402 C h o o s i n g
a v a i l a b i l i t y. O D R b r i n g s n e u t r a l s i n s t a n t l y i n t o u c h w i t h t h e
parties. Parties can choose any neutral and consequently the best
c o n c e r n s ” . 403
T h e f l e x i b i l i t y o f O D R r e l a t e s t o t h e u s e o f v a r i o u s IC T
p o s s i b l e i n o f fl i n e d i s p u t e r e s o l u t i o n . T h e t e c h n o l o g y i m p r o v e s
c o m m u n i c a t i o n a n d a i d s t h e c o n v e yi n g o f t h e m e s s a g e s b y u s i n g
IC T t o o l s t h at m a k e r e s o l u t i o n m o r e ef f e c t i v e a n d l e a d t o f a i r e r
o u t c o m e s . F o r i n s t an c e , t h e t e c h n o l o g y a i d s t h e u n d e r s t a n d i n g o f
a n d c a s e - m a n a g e m e n t s ys t e m s a n d t h e d i r e c t v i s u a l i z at i o n o f
402
VICTORIO M. Richard, op. cit., pp. 14, 15.
403
WANG Fangfei Faye, op. cit., p. 29.
231
t h a t k n o w l e d g e w i t h t h e h yp e r t e x t l i n k i n g o f t ex t w i t h l e g a l
a u t h o r i t y o r e v i d e n c e . 404
g o i n g o n l i n e a n d v e r i f yi n g a n y r e c e i v e d i n f o r m a t i o n a n d s h a r e
the findings with the other parties; this way the parties are
b e t t e r i n f o r m e d a n d m o r e e q u i p p e d t o r e a c h a n a g r e e m e n t . 405
F u r t h e r m o r e , t h e p a r t i e s h a v e t h e a b i l i t y t o u s e i n f o rm a t i o n
i n f o r m a t i o n - r e t r i e v a l s ys t e m s , w h i c h a l l o w s t h e m t o p r o c e s s
i n f o r m a t i o n f a s t e r , a n d m o r e e f f i c i e n t l y; r e d u c i n g d e l a y a n d
t h e o f f l i n e w o rl d . 406 T h e f l e x i b i l i t y d u r i n g t h e p r o c e s s a l l o ws
p a r t y, i n a w a y s i m i l a r t o h a v i n g s e v e r a l d o c u m e n t s o p e n i n a
e f f e c t i v e n e s s o f t h e p r o c e s s . 407
404
HÖRNLE Julia, op. cit., p. 88.
405
For instance “If a representation is made by one side about the cost of a component or the value
of an item, the other side can easily verify the cost over the Internet”. See RULE Colin, op. cit.,
pp. 65, 66.
406
HÖRNLE Julia, op. cit., p. 89.
407
RULE Colin, op. cit., p. 73.
232
S e c t i o n 2 : T h e ch a l l e n g e s o f O D R
a l s o p r e s e n t s s e v e ra l n e w d i f f i c u l t i e s c o m p a r e d t o t r a d i t i o n a l
c a n n o t e a s i l y b e r e p l i c a t e d o n l i n e , s i n c e C yb e r s p a c e i s n o t a n
a c t u a l r e p r e s e n t a t i o n o f t h e p h ys i c a l w o r l d . 408 O D R c h a n g e s t h e
A . P r a c t i c a l c h a l l e n g es
T h e p r a c t i c a l c h a l l en g e s f o r O D R a r e r e l a t e d t o t h e a b i l i t y
408
EISEN Joel, op. cit., p. 1308.
409
“Many of the characteristics of ODR processes are double-edged, with both plusses and
minuses”. See RULE Colin, op. cit., p. 80.
233
w o u l d i n a n y o f t h e t r a d i t i o n a l m et h o d s . T h e s e c h a l l e n g e s
i n c l u d e m a t t e r s l i k e t h e a b i l i t y o f t h e p a r t i e s t o h a v e a cc e s s t o
make proper use of that equipment and finally the ability of the
t h e t r a n s p o r t at i o n o f t h e r e s o l u t i o n t o t h e v i r t u a l w o rl d .
c o m p u t e r a n d t h e In t e r n e t . A l t h o u g h i t b e c o m e s i n c r e a s i n g l y
c o u n t r i e s ” . 410 T h e u n fa m i l i a r i t y o f t h e p a r t i e s u s i n g t h e i n t er n et
d i s a d v a n t a g e s o f OD R . E v e n a s yn c h r o n o u s c o m m u n i c a t i o n c a n
c a u s e f r u s t r a t i o n wh e n i n t e r n e t a v a i l ab i l i t y i s m o r e l i m i t e d . 411
The problem is also known as the digital divide. The fact that
o n l y a r e l a t i v e l y s m a l l p e r c e n t a g e o f t h e t o t al p o p u l a t i o n h a s
410
In 2001 about one-third of a billion people were already online. Almost one-half (147 million)
were from North-America, just over a quarter (92 million) European, and roughly 6 per cent (19
million) British. France had only 17% of its population using Internet against 26% for England.
See MANEVY Isabelle, op. cit., p. 33.
411
RULE Colin, op. cit., p. 68.
234
a c c e s s t o a n d u s e o f t h e In t e r n e t , u r g e d P r e s i d e n t C l i n t o n , i n h i s
2 0 0 0 S t at e o f t h e U n i o n A d d r e s s , t o e m p h a s i z e t h e n e e d t o c l o s e
the gap between the technology haves and have-nots, because the
N e t i s b e c o m i n g a m a j o r e n g i n e o f e co n o m i c g r o w t h a n d t h o s e
p e o p l e l e f t o u t o f t h e In t e r n e t r e v o l u t i o n s t a n d t o l o s e o u t o n t h e
b e n e f i t s o f a w i r e d n a t i o n . 412
resolution also requires certain skills both for the parties and the
m u s t a l s o a d j u s t t h e i r s k i l l s t o b e b et t e r s u i t e d f o r t h e o n l i n e
b u i l d i n g t r u s t , b u t i t r e q u i r e s d i f f e r e n t t r a i n i n g , f o r i n s t a n ce , t h e
d i f f e r e n t f r o m p h ys i c a l c o m m u n i c a t i o n s , i s a l s o p o s s i b l e .
M a n y O D R s ys t e m s m a y r e q u i r e p a r t i e s i n a d i s p u t e t o u s e
d i f f e r e n t l y i n e v e r y c o u n t r y. 413 A n o n l i n e f o r m o f c o m m u n i c at i o n
m a y i n t i m i d at e s o m e u s e r s d u e t o i n c o m p l e t e k n o wl e d g e o n n e w
t e c h n o l o g i e s t h a t a re c o n s t a n t l y c h a n g i n g . T h e a r g u m e n t r e l a t e s
t o t h e a s ym m e t r y o f c o m p u t e r ex p e r t i s e a c c o r d i n g t o w h i c h t h e
412
VICTORIO M. Richard, op. cit., pp. 20, 21.
413
For instance, within the EU many people still use various speeds of internet connections.
235
p a r t y w h o i s m o r e co m f o r t a b l e w i t h c o m p u t e r t e c h n o l o g y w i l l b e
e x p e r t i s e . T h e d i s ad v a n t a g e d p a r t y c a n o v e r c o m e t h i s d i ff i c u l t y
w o u l d a d d c o n s i d e ra b l e c o s t s m a k i n g i t a l e s s d e s i r a b l e o p t i o n . 414
H o w e v e r , t h e a r g u m e n t t h a t O DR f a v o u r s t h o s e w h o a r e
p e o p l e u s i n g c o m p u t e r s i s i n c r e a s i n g a n d e v e r yo n e b e c o m e s
m o r e i n t o u c h w i t h t e c h n o l o g y. T h i s a r g u m e n t a l s o r e l a t e s m o r e
t o o f f l i n e d i s p u t es t h a n d i s p u t e s t h a t a r o s e i n t h e o n l i n e
the parties had the adequate knowledge to take part in the online
transaction that gave rise to the dispute they can also take part
in ODR.
O n e o f t h e g r e a t e s t d r a w b a c k s o f O DR i s c o n s i d e r e d t h e
l a c k o f f a c e - t o - f a c e e n c o u n t e r s . It i s a r g u e d t h a t i n t r a d i t i o n al
414
VICTORIO M. Richard, op. cit., pp. 20, 21.
236
p r o c e d u r e , 415 t h e p r o c e s s i s m o r e e f f i c i e n t b e c a u s e t h e r e i s a
d i r e c t t w o - w a y i n f o r m a t i o n f l o w . 416 On t h e c o n t r a r y, o n l i n e
c o m m u n i c a t i o n i s d i s t r i b u t e d i n t i m e a n d t h e a s yn c h r o n o u s
m a i l , c a n c r e a t e a n u n c e r t a i n r h yt h m . A n e m a i l s e n t b y o n e p a r t y
m a y b e a n s w e r e d i n a f e w m i n u t e s , d a ys o r w e e k s w i t h o u t
knowing when.
w h i c h m a k e s i t ea s i e r f o r t h e m t o f o c u s o n t h e r e s o l u t i o n
s t o n e w a l l t h e o t h er s i d e a n d i t i s h a r d e r t o e n s u r e t h a t t h e
p a r t i e s s t a y e n g a g e d w i t h t h e p r o c e s s ”. 418 T h e d i s t a n c e o f o n l i n e
communication and the fact that parties are not in the same room
c r e a t e s c o n c e r n s a b o u t t h e i n a p p r o p r i a t e n e s s o f t h e In t e r n e t
m e d i u m . T h e c o n ce r n s r e l a t e t o t h e d i f f i c u l t y c o n t r o l l i n g t h e
c o n d i t i o n s o f t h e p r o c e d u r e , s i n c e t h e l a c k o f p h ys i c a l p r e s e n c e
415
KATCH Ethan, RIFKIN Janet and GAITENBY Alan, op. cit., pp. 705, 714.
416
The great paradox of ODR is that it requires an electronic distance for parties, while ADR is
usually a verbal dispute resolution and is designed to engage participants in a direct face to face
communication. See EISEN Joel, op. cit., p. 1310.
417
D' ZURILLA T. William, op. cit., p. 352.
418
RULE Colin, op. cit., p. 82.
237
i n t h e o n l i n e p r o c e s s c a n m a k e i t d i f fi c u l t f o r t h e p r a c t i t i o n e r t o
m a y c a u s e c o n f u s i o n . 419
e n v i r o n m e n t a n d es p e c i a l l y w h e n t h e p a r t i e s u s e n o n - v e r b a l ,
n a t u r a l l y o n l i n e a s i t m i g h t f a c e - t o - f a c e . 420 F u r t h e r m o r e m a n y
ADR methods are considered valuable not just for the outcome
H o w e v e r , t h e l a c k o f p h ys i c a l p r e s e n c e h i n d e r s t h e e s t a b l i s h m e n t
o f t r u s t s i n c e e s t ab l i s h i n g t r u s t v i a w r i t i n g o v e r a n e l ec t r o n i c
r e a d i n g h e r j o u r n a l . 421 F u r t h e r m o r e , i t i s a r g u e d t h a t f a c e t o f a c e
419
MANEVY Isabelle, op. cit., pp. 29- 34.
420
RULE Colin, op. cit., p. 84.
421
VICTORIO M. Richard, op. cit., pp. 15- 17.
238
s t o r y, b u t a l s o t o h a v e a n e f f e c t o n t h e l i s t e n e r , b u t i n OD R t h e
e l e c t r o n i c m e d i u m cr e a t e s d i s t a n c e f r o m t h e l i s t e n e r .
c o m m u n i c a t i o n s u ch a s t h e e m a i l , p a rt i e s c a n n o t p a r t i c i p a t e a t
the same time, making them unable to react instantly or ask for
c l a r i f i c a t i o n ; 422 i n t e r f e r e n c e w i t h f o l l o w- u p q u e s t i o n s b e c o m es
h a r d e r a s t h e m a t t e r i s i n g e n e r a l m o r e t e r s e l y p r o m o t e d . In s t e a d
c o m m u n i c a t i o n i s b a s e d o n l a r g e r , m o r e c o m p l e x m es s a g e s
v e r b a l a f f i r m a t i o n o f t h e i r u n d e r s t a n d i n g . 423 F u r t h e r m o r e , t h e
f a c t t h a t c o m m u n i ca t i o n i n O D R i s r e c o r d e d a n d a r c h i v e d c a n
p r o c e s s t h e r e i s h o s t i l i t y b e t w e e n t h e p a r t i e s a n d ex c h an g e o f
i n s u l t s ; t h e s e i n s u l t s w i l l a l s o b e a r c h i v e d a n d r e c o r d e d an d w i l l
o n t o w a r d s a r e s o l u t i o n . 424 T h i s i s t r u er e s p e c i a l l y f o r t e x t u al
c o m m u n i c a t i o n ; a s t h e La t i n p r o v e r b g o e s “ V e r b a v o l a n t , s c r i p t a
m a n e n t ” w h i c h m e a n s " s p o k e n w o r d s f l y a w a y, w r i t t e n w o r d s
remain".
422
KRIVIS Jeffrey, Taking mediation online: how to adapt your practice, paper presented at the
ABA Section on Dispute Resolution Conference, Seattle, April 4, 2002, p. 27.
423
MORRIS W. Michael, NADLER Janice, KURTZBERG Terri, & THOMPSON Leigh,
Schmooze or lose: Social friction and lubrication in e-mail negotiation, Group Dynamics: Theory,
Research, and Practice, vol. 6, 2002, pp. 89-100.
424
RULE Colin, op. cit., pp. 80, 81.
239
Body language, tone of voice and facial expressions which
c o m m u n i c a t i o n . 425 T h e r e p l a c e m e n t o f fa c e t o f a c e c o n t a c t b y
a n y w e i g h t t o e m o t i o n . It i s h a r d e r t o u s e “ i n t u i t i v e c u e s o f b o d y
l a n g u a g e , f a c i a l e x p r e s s i o n s a n d v e r b a l t o n a l i t y, a s c yb e r s p a c e
c u r r e n t l y c o m e s w i t h o u t a l l f i v e s e n s e s a t t a c h e d ” . 426 T h e a b s e n ce
c o n t e x t a n d c r e a t e m i s u n d e r s t a n d i n g s . 427
e x p r e s s w e l l i n wr i t i n g a n d t h e m e s s a g e m a y b e u n d e r s t o o d
425
GIBBONS Llewellyn Joseph, KENNEDY Robin & GIBBS Michael John, Cyber-mediation:
Computer-mediated Communications medium massaging the message, New Mexico Law Review,
vol. 32, 2002, pp. 43- 45.
426
EISEN Joel, op. cit., p. 1308.
427
However, “the loss of non-verbal information may be compensated by the increased comfort
that participants feel because they are in their own homes. In the case of videoconferencing
comfort can also bring patterns of interaction that could not otherwise be seen”. See GILKEY L.
Sonia, CAREY Joanne & WADE Shari, Families in crisis: Considerations for the use of web-
based treatment models in family therapy, Families in Society: The Journal of Contemporary
Social Services, vol. 90, 2009, pp. 37- 45.
240
a t m o s p h e r e o f u n c er t a i n t y. T h i s a m b i g u i t y l e a d s p a r t i e s t o o f t e n
s i m u l t a n e o u s l y r e s e a r c h o n l i n e al l o w s p a r t i e s t o v e r i f y m u c h o f
t h e i n f o r m a t i o n ex c h a n g e d , h o w e v e r , i n o n l i n e c o m m u n i c a t i o n
parties are more likely to lie to each other because lies can be
e v e n m o r e t h e u s e o f t e x t u a l c o m m u n i ca t i o n m a k e i t e a s i e r t o l i e
d e t e c t a l i e . 428 Li e s c a n c r e a t e d i s t r u s t b e t w e e n p a r t i e s a n d h i n d er
e f f e c t i v e c o m m u n i ca t i o n .
t h i s a s s u m p t i o n h as b e e n p r o v e n w ro n g b y s u c c e s s f u l O D R
o l d e r a n d o u t - d a t ed f o r m s o f o n l i n e c o m m u n i c a t i o n . N e w e r
428
“If someone looks you in the eye and says, ‘Yes, I sent the check’, most people believe that
they will be able to tell if that person is being truthful. In an online interaction, that person could
be laughing while he typed, ‘Yes, I sent the check’, and the other side would never know”. See
RULE Colin, op. cit., pp. 82, 83.
429
CORTES Pablo, op. cit., pp. 83, 84.
241
of face to face contact. Until recently the objection of the lack
i n t e r n e t s p e e d h a s r e a c h e d u n p r e c e d e n t e d h e i g h t s a n d c am e r a s
a n d s o f t w a r e a r e ea s i l y a c c e s s i b l e a n d ex t r e m e l y e a s y t o u s e ,
F u r t h e r m o r e , O D R c a n p r o v i d e v a r i o u s IC T t o o l s t o f a c i l i t a t e
e f f e c t i v e c o m m u n i ca t i o n . E v e n t e x t u al c o m m u n i c a t i o n m a y n o t
i m a g e s , g r a p h i c s , s h a p e s , s ym b o l s a n d e v e n c o l o r s c o u l d b e u s e d
c o m m u n i c a t i o n . 431
a t t r a c t i v e a n d b e t t er a r t i c u l a t e d , a n d i t c a n c r e a t e b i a s i n t e r m s
o f r e l i g i o n , s e x , n a t i o n a l i t y o r l o o k s . 432 In t h i s c a s e , c e r t a i n
forms of ODR may provide a solution for people who feel more
F u r t h e r m o r e , F 2 F c o m m u n i c a t i o n i s n o t a l w a ys n e c e s s a r y o r
430
BEAL Bruce Leonard, “Online Mediation: Has its Time Come?”, Ohio State Journal on
dispute resolution, vol. 15, 2000, p. 736.
431
HÖRNLE Julia, op. cit., p. 80.
432
GIBBONS Llewellyn Joseph, KENNEDY Robin & GIBBS Michael John, op. cit., p. 44.
433
RULE Colin, op. cit., p. 68.
242
like the ability of calming down the parties which is an
a s yn c h r o n o u s c o m m u n i c a t i o n v i a e -m a i l . F i n al l y, a s i n t h e
r e s o l u t i o n p r o c e s s d e p e n d s o n t h e w ay t h e a v a i l a b l e t o o l s a r e
e f f e c t i v e i f t h e t o o l s a r e u s e d a p p r o p r i a t e l y a n d c o r r e c t l y, b u t i f
B . A u t h e n t i ci t y , d a t a s e c u r i t y a n d c o n f i d en t i a l i t y
d u r i n g d i s c u s s i o n s c o n d u c t e d t h r o u g h v i d e o c o n f e r e n c e , 435 a n d t h e
c o n f i d e n t i a l i t y o f t h e p r o c e d u r e . T h e m a i n c o n c e r n i s t h at u s e r s
c a n n o t b e s u r e t h at t h e d a t a s e n t a n d r e c e i v e d i n t h e v i r t u a l
434
CHOSH K. Anup, E-Commerce Security: Weak Links, Best Defenses, (John Wiley and sons),
1999, p. 98.
435
ZEKOS I. Georgios, Issues of Intellectual Property in Cyberspace, Journal of World
Intellectual Property, vol. 5, 2002, p. 233.
243
u n w e l c o m e e ye s . O D R p a r t i e s n e e d t o b e a s s u r e d t h a t t h e i r
c o m m u n i c a t i o n s a r e p r o t e c t e d f r o m e x t e r n a l p a r t i e s t o e n co u r a g e
open participation.
A D R w h e r e m o s t i n t e r a c t i o n s o c c u r i n p e r s o n , i n O DR i t m i g h t
b e d i f f i c u l t b e c er t a i n a b o u t t h e i d e n t i t y o f a p e r s o n , f o r
e x a m p l e t h e s e n d e r o f a n e - m a i l . In t e r n e t u s e r s m a y u s e d i f f e r e n t
n i c k n a m e s ( p s e u d o n ym s ) o r s i m p l y d i s g u i s e t h e i r i d e n t i t y. In
i n s t a n c e , t h i s r e l a t e s t o In t e r n e t r o m a n c e s s t a r t e d i n c h a t r o o m s
and carried out over e-mail, in which one participant often finds
out the other is not the woman of his dreams, but possibly not
e v e n h i s s e x o f p r e f e r e n c e . 436 H o w e v e r , t e c h n o l o g y h a s m a n a g e d
t o f i n d s o l u t i o n s b as e d o n a u t h e n t i c a t i o n s o f t w a r e s u c h a s d i g i t a l
s i g n a t u r e s , “ w h i c h a r e c o d e s t h a t a r e e m b e d d e d i n a m e s s ag e t h a t
c a n b e e m p l o ye d t o a u t h e n t i c a t e i t s o r i g i n ” . 437 O D R p r o v i d ers
a n d p r a c t i t i o n e r s m u s t t a k e c e r t a i n p r ec a u t i o n s a n d s a f e g u a r d s t o
ensure the parties are who they say they are, and that the ideas
disclosure.
e s s e n t i a l . As p r e v i o u s l y s e e n , c o n f i d e n t i a l i t y i s o n e o f t h e
436
VICTORIO M. Richard, op. cit., pp. 18- 20.
437
MANEVY Isabelle, op. cit., p. 31.
244
g r e a t e s t a d v a n t a g e s t h a t m a k e al t e rn a t i v e d i s p u t e r e s o l u t i o n
A D R i s p r i v at e a n d c o m p l e t e l y c o n f i d e n t i a l a n d e n s u ri n g t h i s
s a m e l e v e l o f c o n f i d e n t i a l i t y i n c yb e r s p a c e i s e s s e n t i a l t o O D R ’ s
success.
o v e r a l l d i s p u t e . 438 Ho w e v e r , t h i s i n f o r m a t i o n m u s t b e p r o t ec t ed
f r o m t h i r d i n t r u d e rs a n d d el e t e d f o r d e f a u l t a t t h e e n d o f t h e
p r o c e s s , e x c e p t p e r h a p s s o m e n o n - p e rs o n a l d a t a f o r s t a t i s t i c al
c o n f i d e n t i a l i n f o r m a t i o n e s p e c i a l l y i n a t e x t u a l f o r m , 439 i f t h e re
a r e n o g u a r a n t i e s o f p r i v a c y a n d c o n f i d e n t i a l i t y. T h e a b s e n c e o f
s u c h a s s u r a n c e s m ay p r e v e n t t h e d e v e l o p m e n t o f h o n e s t o n l i n e
438
“To transfer the data over the Internet there are numerous temporary copies made along the
way. This is inherent to the nature of the Internet. It is necessary to make copies on the routers
when transferring data from one computer to another, to make copies when downloading or
uploading Information. In Cyberspace communication takes place through constant copying.
When the confidentiality has been guaranteed by means of encryption, the fact that the Internet is
built up from copies also has its advantages. The complete written file is accessible to both parties
and the mediator at all times to check certain details or to see how things are. It is not necessary to
take notes because everything is already written down”. See HEUVEL V. D. Esther, op. cit., p. 15.
439
“Many people have had the experience of an email written months (if not years) before coming
back and later embarrassing them”. See RULE Colin, op. cit., p. 81.
245
e x c h a n g e s i n C yb e r s p a c e . 440 W h e r e a s i n t r a d i t i o n a l , o f f l i n e A DR
“ i t i s m u c h h a r d e r t o s u r r e p t i t i o u s l y c a p t u r e c o m m u n i ca t i o n s
p o t e n t i al p a r t i c i p an t s . T h e r e f o r e , i t m u s t n o t b e p o s s i b l e f o r
q u e s t i o n t h e v a l u e a n d r e l i a b i l i t y o f t h e o n l i n e e n v i r o n m e n t . ” 442
c o n s i d e r a b l y i m p r o v e d o v e r t h e p a s t s e v e r a l ye a r s p r o d u c i n g
e x c h a n g e s . 443
440
GOODMAN W. Joseph, The Pros And Cons of Online Dispute Resolution: An Assessment of
Cyber –Mediation Websites, Duke Law and Technology Review, 2003, pp. 10- 13.
441
RULE Colin, op. cit., pp. 81, 82.
442
LARSON A. David, Online Dispute Resolution: Technology Takes a Place at the Table,
Negotiation Journal, vol. 20, 2004, p. 131.
443
“Protocols such as SSL, S-HTTP and SET that ensure the confidentiality and authenticity of
exchanges by encrypting the data; firewalls that make it possible to screen the flow of information
between an internal network and a public network and thereby neutralize attempts to penetrate the
internal system from the public network; access to an ODR platform that is protected by a
password, and managed and protected by the service provider; internal messaging tools so as to
avoid the use of unprotected email, and the Secure Multipurpose Internet Mail Exchange Protocol
(S/MIME), which makes it possible to authenticate the origin of every email while ensuring the
246
One way to provide security is through the use of web-
a c c e s s . 444 A n o t h e r w a y c u r r e n t l y u s e d t o g r e a t e x t e n d t o p r o v i d e
c o n f i d e n t i a l i t y a n d d a t a s e c u r i t y i s e n c r yp t i o n . 445 E n c r yp t i o n
b y u n a u t h o r i z e d p a rt i e s . 446 T h e m o s t c o m m o n e n c r yp t i o n m e t h o d s
a r e t h e u s e o f “ H yp e r T e x t T r a n s f e r P r o t o c o l ” ( h t t p ), p l u s
“ S e c u r e S o c k e t La ye r ” ( S S L) w h i c h i s i n d i c a t e d b y a d o m a i n
n a m e p r e c e d e d b y “ h t t p s ” a n d d i s p l a yi n g a l o c k s ym b o l i n t h e
c o r n e r o f t h e u s e r ’ s s c r e e n , a n d t h e “ P u b l i c K e y In f r a s t r u c t u r e ”
( P K I) e n c r yp t i o n s ys t e m , w h i c h i s c o m p r i s e d o f a p u b l i c k e y
confidentiality and integrity of its content, thereby making it very difficult for the sender to
repudiate it or the addressee or a third party to forge it (electronic signature can also serve the
same purposes)”. See BENYEKHLEF Karim and GELINAS Fabien, op. cit., p. 84. For instance,
“Cyber Settle blind-bidding process encrypts all communications using a 128-bit SSL and Smart
Settle uses OpenSSL algorithms with a 168-bit triple-DES encryption algorithm”. See PONTE M.
Lucille and CAVENAGH D. Thomas, op. cit., p. 41.
444
“However, there is no foolproof way to prevent parties from copying information off of their
screen for later use. Even if the parties are prevented from cutting and pasting text, they can still
take a screen capture of the text.” See RULE Colin, op. cit., pp. 81, 82.
445
“Encryption is the automated process of making data inaccessible to unauthorized people by
means of an algorithm and a key”. See HEUVEL V. D. Esther, op. cit., p. 15.
446
RABINOVICH-EINY Orna, Going Public: Diminishing Privacy in Dispute Resolution,
Virginia
Journal of Law and Technology, vol. 7, 2002, p. 43.
247
i n f o r m a t i o n u s i n g b o t h k e ys . 447 In E u r o p e , a l t h o u g h t h e r e a r e i s
s t i l l d r a w b a c k s w i t h t h e u s e o f e n c r yp t i o n , i t i s a r g u e d t h a t E U
d a t a p r o t e c t i o n l a w r e q u i r e s t h e u s e o f e n c r yp t i o n i n o r d e r t o
e n s u r e t h e c o n f i d e n t i a l i t y o f t h e p r o c e d u r e . 448 In c o n c l u s i o n ,
t h e r e a r e c o n c e r n s a b o u t s e c u r i t y, c o n f i d e n t i a l i t y a n d p r i v a c y o f
c h a l l e n g e s . It i s e s s e n t i a l f o r O D R p r o v i d e s t o t a k e al l t h e
c o m m u n i c a t i o n . 449
mechanisms
447
CORTES Pablo, op. cit., pp. 84, 85.
448
For instance, “In France, encryption was long only used by the military. Until 1996, French law
was restrictive regarding the use of encryptions, it has been relaxed but after a certain level of
encryptions, user are submitted to an obligation of declaration or prior authorization if the
technology used exceeds a certain level of bits. However, restrictions on the use of encryption
technologies should be eliminated due to the implementation of the EU Directive on a Community
Framework for Digital Signatures which prevents all EU Member States from not recognizing the
validity of an electronic writing. In France, it was done by the law n°2000-230 of March 13 2000
and the Décret d’application of March 31 2001. In the UK, in May 2001, the government was still
consulting for the implementation of the e-sign directive”. See MANEVY Isabelle, op. cit., pp. 30,
31.
449
RULE Colin, op. cit., pp. 81, 82.
248
r e s o l u t i o n p r o c e d u re . H o w c a n c o m p l i a n c e w i t h t h e o u t c o m e o f
t h e d i s p u t e r e s o l u t i o n p r o c e s s b e e n s u r e d ? T h e p r o b l e m b ec o m e s
b o r d e r d i s p u t e s . F i r s t , a d i s t i n c t i o n m u s t b e m a d e b e t w ee n t h e
m e t h o d s o f O D R , r el a t i n g t o t h e e f f e c t o f t h e p r o c e s s , t o b i n d i n g
a n d n o n - b i n d i n g O D R m e t h o d s . In t h e f o r m e r c a t e g o r y t h e r e i s
award and secure the compliance of the losing party and the
i n i t i a t e e n f o r c e m e n t p r o c e e d i n g s b y a p p l yi n g f o r a n e x e q u at u r. 450
examined since this task will take place in the relevant section.
In t h e l a t t e r c a t e g o r y o f n o n - b i n d i n g O D R m e t h o d s t h e r e
a r e m a i n l y o n l i n e n e g o t i a t i o n , o n l i n e m e d i a t i o n a n d n o n -b i n d i n g
a r b i t r a t i o n . T h e s e m e t h o d s , a l t h o u g h p r e s e n t a l e s s e r d eg r e e o f
f o r m a l i t y, u n f o r t u n a t e l y a l s o p r e s e n t a s i g n i f i c a n t p r o b l e m ,
w h i c h i s t h e e n f o r c e m e n t o f t h e i r o u t co m e s . A m a j o r i s s u e w i t h
c o u r s e a m a j o ri t y o f c a s e s w h e r e i t i s i n b o t h p a r t i e s ’ b e s t
450
KAUFMANN-KOHLER Gabrielle, op. cit., pp. 453, 454.
249
interest to resolve the dispute in a final way and without further
complications. But, there are other cases where one party might
p r o c e s s . E v e n w h en p a r t i e s i n i t i a l l y v o l u n t a r i l y a g r e e o n a
s e t t l e m e n t , c o m p l i an c e m a y b e e x p e c t e d , b u t i t c a n n o t b e a l w a ys
assured.
In n o n - b i n d i n g O D R m e t h o d s t h e o u t co m e o f t h e p r o c e d u re
c a n b e n o n - b i n d i n g a t a l l , i n w h i c h ca s e w i t h o u t t h e v o l u n t a r y
c o m p l i a n c e o f t h e p a r t i e s , t h e r e i s n o t h i n g m o r e t o b e d o n e. B u t ,
i n m o s t c a s e s t h e o u t c o m e c a n b e c o m e b i n d i n g a s a c o n t ra c t , o r
o t h e r w i s e k n o w n a s a b i n d i n g s e t t l e m e n t a g r e e m e n t . 451 Y e t , a
b i n d i n g s e t t l e m e n t a g r e e m e n t d o e s n o t r e a l l y s o l v e t h e p ro b l e m
H o w e v e r , t h i s s o l u t i o n l e a d s t o t h e s am e j u d i c i a l r o u t e t h a t t h e
p a r t i e s h o p e d t o av o i d , d e f e a t i n g t h e a c t u a l p u r p o s e o f O D R .
W i t h o u t v o l u n t a r y c o m p l i a n c e , t h e wi n n i n g p a r t y h a s t o g o t o
451
“This type of enforcement mechanism (a binding settlement agreement) could be implemented
either unilaterally e.g. only the merchant could agree to be bound by the result of the ODR
procedure which would be easier to enforce by court because it would be protective the consumer.
It could be implemented bilaterally and be binding on both parties. Generally speaking such are
binding in US, UK and France as contracts, which can be sued upon under national law if they are
not complied with. In the European Union, the resulting judgment could then be enforced in all
other Member States under the Brussels Convention”. See MANEVY Isabelle, op. cit., p.29.
250
discourage the winning party from seeking enforcement,
e v e n g r e a t e r d u e t o h i g h e r c o s t s a n d c o m p l ex j u r i s d i ct i o n a l
i s s u e s . In c r o s s - b o r d e r d i s p u t e s , d u e t o t h e g r e a t e r e x p e n s e a n d
u n l i k e l y t o b e c o m e e n f o r c e a b l e ” . 452 C o n s e q u e n t l y, t h e v o l u n t a r y
shortcomings.
O n e p r o p o s i t i o n t o o v e r c o m e t h i s p r o b l e m i s t o s u p p o rt
e x t r a - j u d i c i a l O DR b y c o u r t s w h i c h w i l l o p e r a t e a s s e co n d a r y
c r i t i c i s m s b a s e d o n p e r c e i v e d d e l a ys , e x p e n s e s , e a s e o f a b u s e
a n d l a c k o f fi n a l i t y” . 453 C o n s e q u e n t l y, i n O D R o u t c o m e s a r e
452
SCHULTZ Thomas, 'Online Arbitration: Binding or Non-Binding?' ADR Online Monthly,
2003, p. 1.
453
CORTES Pablo, op. cit., pp. 204, 206.
251
enforced without recourse to the courts, through what is known
a s s e l f - e x e c u t i o n o r o t h e r w i s e a s s e l f -e n f o r c e m e n t m e c h a n i s m s .
T h e r e a r e b a s i c a l l y t h r e e w a ys b y w h i c h a d e c i s i o n a r i s i n g
need for a court decision but instead with low costs and
c o n v e n i e n c e . E a c h o f t h e s e w a ys r e q u i r e s t h a t t h e O D R p ro v i d e r
c o n t r o l o v e r r e p u t at i o n . S e l f - e n f o r c e m e n t c a n b e d i v i d ed i n t o
t h e l o s i n g p a r t y t o c o m p l y v o l u n t a r i l y, f o r ex a m p l e t h r o u g h t h e
u s e o f “ t r u s t m a r k s , r e p u t a t i o n m a n a g e m e n t a n d r a t i n g s ys t e m s ,
m a r k e t p l a c e s , a n d p a ym e n t s f o r d e l a y i n p e r f o r m a n c e ” . 454 T h e
e x a m i n a t i o n o f t h es e m e c h a n i s m s a t t h i s p o i n t o f t h e t h e s i s i s
454
WANG Fangfei Faye, op. cit., pp. 83, 84.
252
b e a n i n t e g r a l p a r t o f t h e p r o p o s e d O DR s ys t e m t h a t f o l l o w s i n
t h e s e c o n d p a r t o f t h i s t h es i s .
control
r e p r e s e n t a t i v e e x am p l e i n t h i s c a s e i s t h e s e l f - e n f o r c e m e n t
m e c h a n i s m a p p l i e d b y t h e U D R P p r o c ed u r e f o r t h e r e s o l u t i o n o f
w h e r e t h e IC A N N h a s u n i q u e c o n t r o l o v e r d o m a i n n a m e s a n d t h e
d e p e n d i n g o n t h e o u t c o m e o f t h e d i s p u t e . 455 “ T e n d a ys a f t e r t h e
c a n c e l l e d o r t r a n s f e r r e d t o t h e w i n n i n g p a r t y, b y t h e r e g i s t r a r
t h a t r e g i s t e r e d t h e d o m a i n n a m e a n d ex e r c i s e s t e c h n i c a l c o n t r o l
455
“The success of the UDRP as an ODR model for domain names rests on getting disputants to
use the UDRP and its efficient self-enforcement mechanism. This self-enforcement mechanism
may not be available for some types of disputes, such as mainstream disputes arising out of a
transaction between an online vendor and a buyer; except if there is the collaboration of entities
that could enforce the outcome, for instance, the payment service (e.g. VISA or PayPal) or if a
dispute arouse on a third party platform or other intermediary, such as disputes arising out of
market places (e.g. eBay) or disputes originated from information posted on mass collaboration
sites (e.g. Facebook and Wikipedia)”. See CORTES Pablo, op. cit., pp. 167, 168.
253
o v e r t h e r e g i s t r a t i o n ” . 456 T h e r e i s a n ex ce p t i o n i n t h e c a s e l e g a l
r u l e . 457 T h e U D R P ex a m p l e w i l l b e e x a m i n e d f u r t h e r i n t h e
incentives
In C 2 C a n d B 2 C d i s p u t e s o n e e f f e c t i v e w a y t o e n s u r e t h e
i s b a s e d o n t h e r e p u t a t i o n o f i n d i v i d u a l b u ye r s o r s e l l e r s o r
c o m p a n i e s . B a s i c a l l y, t h e r e p u t a t i o n o f u s e r s i s l i n k e d w i t h t h e i r
i t s r e s u l t , s o t h at f a i l u r e t o c o m p l y w o u l d h a r m t h e i r r e p u t a t i o n .
h o l d i n g a g o o d r e p u t a t i o n i s a n i n c e n t i v e t o c o m p l y.
456
KAUFMANN-KOHLER Gabrielle, op. cit., pp. 453, 454
457
CORTES Pablo, op. cit., p. 82.
254
1. Feedback systems
F e e d b a c k s ys t e m s p r o v i d e i n f o rm a t i o n a b o u t t h e r e l i a b i l i t y
o f o n l i n e u s e r s b as e d o n ex p e r i e n c e a n d c o m m e n t s o f fo r m e r
u s e r s f r o m p r e v i o u s t r a n s a c t i o n s . Th e y a r e b e i n g u s e d m o s t l y b y
online auction sites where there is no other viable way for users
parties “who do not know each other to see a record of the other
s i d e ’ s p o s i t i v e o r n e g a t i v e f e e d b a c k f r o m p r i o r t r a n s a c t i o n s ”. 458
c l e a r l y s h o w n b y e - b a y, w h e r e c o m p l i a n c e w i t h t h e o u t co m e o f
b e c o m e k n o w n a s t h e “ e B a y La w ” . E - B a y u s e s a F e e d b a c k
s ys t e m , 459 w h i c h i n c en t i v i z e s m a r k e t p a r t i c i p a n t s t o b e o n t h e i r
b e s t b e h a v i o r . W h en e v e r o n e o f t h e p a r t i e s d o e s n o t c o m p l y, i t
h a s a s a r e s u l t a n e g a t i v e f e e d b a c k , w h i c h i n t u r n h u rt s t h at
p a r t y’ s r e p u t a t i o n a n d h a s a n e g a t i v e e f f e c t i n t h e a b i l i t y o f
o t h e r s t o t r u s t a n d s e l e c t t h a t p a r t y f o r f u t u r e t r a n s ac t i o n s .
458
RULE Colin, op. cit., p. 102.
459
“Currently eBay houses more than four billion feedback ratings left by transaction participants
for each other… EBay assigns parties a “star” based on how many positive reviews they have
received. For example, if the seller has 10 to 49 positive ratings, they get a yellow star and if the
seller has 50 to 99 positive ratings they get a blue star. A seller with a million or more positive
ratings is entitled to a ‘shooting silver star’”. See DUCA D. Louis, RULE Colin, LOEBL Zbynek,
op. cit., pp. 66, 67, 68.
255
n o t t o j e o p a r d i z e i t s p o s i t i o n i n t h e e B a y c o m m u n i t y. In a
“ b l a c k l i s t s ” . 460 A s o n e c a n g u e s s b y t h i s m e c h a n i s m ’ s s e l f-
e v i d e n t n a m e , n a m e s p u b l i s h e d i n a b l a c k l i s t a r e p a r t i es t h at
2. Trustmarks
T h e u s e o f t r u s t m ar k s a n d s e a l s p r o v i d e s w e b t r a d e r s w i t h t h e
n e c e s s a r y i n c e n t i v e s t o c o m p l y. “ A b u s i n e s s s i t e g r a n t e d a
conduct that provides for ODR and for compliance with the
r e s u l t i n g d e c i s i o n s ” . 461 If a c o m p a n y d i s p l a ys t h e T r u s t m a r k o r
460
For instance “The Consumer Complaint Board in Denmark states that 80 per cent of its
decisions are voluntarily complied with by the businesses. The remaining decisions are published
in a blacklist of defaulters on the consumer agency’s website. This strategy of ‘naming and
shaming’ has led to eventual compliance with an additional 30 per cent of the remaining
decisions”. See CORTES Pablo, op. cit., pp. 82, 83.
461
KAUFMANN-KOHLER Gabrielle, op. cit., pp. 453, 454.
256
the seal of an ODR provider, it means that the company in case a
d i s p u t e a r i s e s w i l l a g r e e t o r e s o l v e t h e d i s p u t e t h r o u gh t h a t
p r o c e s s . In c a s e t h e c o m p a n y f a i l s t o c o m p l y, t h e O D R p r o v i d e r ,
i n c o l l a b o r a t i o n wi t h t h e a p p r o p r i a t e c o n t r o l l i n g e n t i t y, w i l l
r e m o v e t h e T r u s t m ar k .
c o m p a n y t h a t d i s p l a ys i t a n d r e a s s u r e s t h e m t h a t i n c a s e a
w a y t o r e s o l v e t h e d i s p u t e . Th e r e f o r e , i t i n c r e a s e s t h e ch a n c e
T h e t h r e a t o f r e m o v i n g t h e T r u s t m ar k a n d l o s i n g t h e t r u s t
a c c o m p a n i e d b y i t c r e a t e s t h e c o m p a n y’ s i n c e n t i v e t o co m p l y
T r u s t m a r k p r o v i d e r s i n c l u d e “ T r u s t e d S h o p s ” , “ E u r o - La b e l ” ,
“ T r u s t U K ” a n d “ W eb T r a d e r U K ” . In t h e U S t h e m o s t p o p u l a r a r e
( G T A ) . 462
462
CORTES Pablo, op. cit., pp. 59- 64.
257
iii. Self-enforcement mechanisms based on Financial
control
h a s c o n t r o l o v e r t h e f i n a n c e s . M e t h o d s o f e n f o r c e m e n t r e l yi n g
o u t c o m e o f O D R p ro c e e d i n g s , o r e s c r o w a c c o u n t s o p e r a t e d b y a
funds until the goods are delivered, “help to solve the problem
o f f r a u d u l e n t s e l l e r s ” . 463 C r e d i t c a r d c h a r g e b a c k s a r e b a s i c a l l y
a g r e e m e n t s b e t w e e n O D R p r o v i d e r s an d c r e d i t c a r d c o m p a n i e s .
A c c o r d i n g t o t h e s e c h a r g e b a c k s a g r e e m e n t s , w h e n a b u ye r h a s
t r a n s a c t i o n t o t h e b u ye r s a c c o u n t d e p e n d i n g o n t h e d e c i s i o n o f
a n y t r a n s a c t i o n i n w h i c h t h e b u ye r u s e s a c r e d i t c a r d , s u c h a s
463
RULE Colin, op. cit., p. 102.
258
p a ym e n t s i n c o m m er c i a l s t o r e s a n d r e s e r v a t i o n s o f h o t e l ro o m s .
w o r l d a n d s u p p o r t ed b y t h e m o s t r e l i a b l e c r e d i t c a r d c o m p a n i e s ,
s u c h a s “ V i s a ” , “ M a s t e r C a r d ” a n d “ A m e r i c a n E x p r e s s ” . 464 A f t er
c o m p a n y, w h i c h t r a n s f e r s b a c k t h e m o n e y f r o m t h e s e l l e r t o t h e
b u ye r ’ s a c c o u n t u n t i l t h e t r a n s a c t i o n t ak e s p l a c e o r t h e p o t e n t i a l
d e l i v e r y o f g o o d s o r s e r v i c e s t h a t d o n o t m a t c h t h e d e s cr i p t i o n
consumers not only because credit cards are the main method
u s e d t o t r a n s f e r m o n e y o n l i n e , b u t a l s o b e c a u s e t h ey d o n ’ t
r e q u i r e e v i d e n c e f ro m t h e c o n s u m e r a n d t h e b u r d e n o f p r o o f l i e s
e n t i r e l y o n t h e s e l l e r . O n l y i f t h e s el l e r s u c c e e d s t o p ro v i d e
s u b s t a n t i a l p r o o f , t h e b a n k m a k e s t h e p a ym e n t . B a s i c a l l y, t h e
464
“In the United States, federal law requires credit card companies to allow chargebacks. To take
advantage of this system, a buyer must notify the credit card company of the disputed charge
within sixty days of receiving notice of the charge from the credit card company. In Europe, credit
card companies are not required to provide chargeback services. Although chargebacks are not as
prevalent in Europe as in the United States, they are still used fairly frequently”. See DUCA D.
Louis, RULE Colin, LOEBL Zbynek, op. cit., pp. 72- 75.
“However, the coverage of debit and credit cards varies considerably among different countries.
Commonly, debit card holders have fewer protections than credit card holders, but these also vary
depending on the jurisdiction. In the UK, for instance, credit card holders have more protections
than debit card holders, while in Ireland the protections afforded to consumers are the same. This
disharmony occurs even though the same European directives are applicable to both Member
States; this is due to the fact that most of these services do not depend exclusively on the
regulations, but also on self-regulatory provisions”. See CORTES Pablo, op. cit., pp. 69, 70.
259
c r e d i t c a r d c o m p a n y a c t s a s a n a r b i t r at o r w i t h o u t e n g a g i n g i n a n
f i n a n c i a l c o n t r o l i s p r o v i d e d b y “ P a yp a l . c o m ” . W h e n a d i s p u t e
a r i s e s i n t h o s e c as e s w h e r e t h e p r o d u c t o r s e r v i c e wa s n o t
d i f f e r e n t ” t o t h e ac t u a l p r o d u c t d e l i v e r e d , “ P a yP a l ” h o l d s t h e
m o n e y t r a n s f e r r e d b y t h e b u ye r u n t i l t h e d i s p u t e i s s e t t l e d . A f t e r
a c o m p l a i n t i s m a d e b y t h e b u ye r w i t h i n f o r t y f i v e d a ys f r o m t h e
p a ym e n t , “ P a yP a l ” c o n d u c t s a d o c u m en t - o n l y o n l i n e a r b i t r a t i o n ,
r e s o l v e s t h e d i s p u t e . If t h e d i s p u t e i s r e s o l v e d i n f a v o r o f t h e
seller the funds are resealed, but if the dispute is settled in favor
o f t h e b u ye r t h e f u n d s a r e t r a n s f e r r e d b a c k ; t h i s w a y P a yP a l
p r o v i d e s i n s t a n t a n d e f f e c t i v e e n f o r c e m e n t . 465
T h e e x a m i n a t i o n o f f e w o f t h e m o s t co m m o n l y u s e d s e l f -
o n e m u s t k e e p i n m i n d t h a t t h e s e s el f - e n f o r c e m e n t m e c h a n i s m s
e s p e c i a l l y i n l o w v a l u e d i s p u t e s , o n t h e u n l i k e l i h o o d t h at “ t h e
l o s i n g p a r t y w o u l d s e e k t o l i t i g a t e a f t e r a d e c i s i o n h a s b e en s e l f -
465
“However, in circumstances where the seller withdraws the money from his account before the
buyer makes the claim, Paypal.com will not be responsible for the buyer’s loss”. See CORTES
Pablo, op. cit., pp. 63, 64.
260
e x e c u t e d ” . 466 B u t , i n r e a l i t y n o t h i n g a c t u a l l y p r e v e n t s t h e l o s i n g
p a r t y t o s e e k r e d r e s s t h r o u g h t h e t r a d i t i o n al j u d i c i a l r o u t e a n d
466
SCHULTZ Thomas, Online Dispute Resolution: an Overview and Selected Issues, op. cit., pp.
10-13.
261
Part 2
T h e f i r s t p a r t o f t h e t h e s i s a n a l ys e d d i s p u t e r e s o l u t i o n a s a
m o v e m e n t a n d i t s ev o l u t i o n f r o m t r a d i t i o n a l A DR t o O DR . T h e
s e c o n d p a r t i s a n e c e s s a r y s u b s e q u e n t t o t h e f i r s t . T h e f i rs t p a r t
d e m o n s t r a t e s t h a t as t h e e v o l u t i o n o f d i s p u t e s i n t h e p a s t cr e a t e d
the need for a faster and more efficient way to resolve disputes
a n d A D R w a s t h e a n s w e r t o t h a t n e e d ; t o d a y, o n c e m o r e t h e
r e s o l u t i o n s ys t e m t h a t c a n r e s p o n d a d e q u a t e l y t o t h e n e e d s o f
r e c e n t t i m e s a n d OD R i s t h e a n s w e r t o t h a t n e e d . A s s t a t ed O D R
A D R t e c h n i q u e s w i t h t h e m o d e r n IC T t o o l s o f t h e d i g i t a l e r a .
i t s d e f i n i t i o n , t h e d i f f e r e n t f o r m s , t h e r e a s o n s t h a t c r e at e d t h e
need for ADR as well as the drawbacks that paved the way for
w a y h u m a n s c o m m u n i c a t e a n d i n t er a c t a n d t h e n e w w o r l d
n e c e s s i t i e s l e d t o t h e a p p e a r a n c e o f O D R . O D R i s ex a m i n e d i n
d e p t h f r o m i t s d e f i n i t i o n a n d t h e u s e o f t e c h n o l o g y, t o i t s
262
advantages and drawbacks and is more clearly illustrated
t h r o u g h r e a l w o r l d e x a m p l e s o f O D R p r o v i d e r s . T h i s wa y t h e
f i r s t p a r t p r o v i d e d a n e x t e n s i v e a n a l ys i s o f d i s p u t e r e s o l u t i o n i n
g e n e r a l a n d O D R m o r e p a r t i c u l a r l y.
d i s p u t e r e s o l u t i o n m o v e m e n t n e c e s s a ry f o r t h e s e c o n d p a r t . T h e
i d e n t i f i es t h e p r o b l e m s t h at m u s t b e o v e r c o m e . T h e ex a m p l e s o f
s u c c e s s f u l f r o m f a i l e d a t t e m p t s a n d i d e n t i f yi n g t h e r e a s o n s t h a t
e x a m i n e d i n t h e p r e v i o u s c h a p t e r w e re p r o o f o f t h a t . B u t , t h e r e
a r e a l s o d i f f i c u l t i es a n d p i t f a l l s a n d t h e l i m i t e d p o p u l a r i t y o f
O D R s ys t e m s i s e v i d e n c e t o t h a t . S o , t h e q u e s t i o n i s h o w c a n
r e s o l u t i o n f i e l d c o m b i n e d wi t h a d et a i l e d ex a m i n a t i o n o f O D R
a n d w i t h t h e e x am p l e s o f O D R , o n e g a t h e r s t h e n e c e s s a r y
e x p e r i e n c e t o i d e n t i f y w h a t w o r k s an d w h a t d o e s n o t a n d i s
263
equipped with all the essential information to draw conclusions
f u t u r e o f d i s p u t e r es o l u t i o n .
i l l u s t r a t e t h e a p p r o p r i a t e l a yo u t o f t h e O D R s ys t e m b o t h a s a
p r o c e s s a n d a s a s t r u c t u r e a s w e l l a s t h e n e c e s s a r y s t e p s t h at
The second part learns from the lessons of the ADR movement
a n d t h e O D R m o v e m e n t u p t o t o d a y, a n d a p p l i e s t h a t k n o w l e d g e
s ys t e m . T h e s e c o n d p a r t o u t l i n e s t h e p a r a m e t e r s f o r a w o r k a b l e
t h e c o n c l u s i o n s f r o m t h e fi r s t p a r t o f t h e t h e s i s . T h e s e c o n d p a r t
i d e n t i f i es a l l t h e n e c e s s a r y r e q u i r e m e n t s s o t h a t O D R p ro v i d e s
t h e u n i q u e a d v a n t ag e s a n d o v e r c o m e s t h e p o t e n t i a l d r a w b a c k s
that are described in the first part. The second part demonstrates
h o w f u t u r e O D R s h o u l d ex e m p l i f y f r o m t h e p r e v i o u s r e a l w o r l d
a t t e m p t s d e m o n s t r a t e d i n t h e f i r s t p a r t . In s h o r t , t h e s e c o n d p a r t
p o t e n t i al a s a c o m p l e t e , f a i r a n d e f f e c t i v e w a y t o r e s o l v e
d i s p u t es . T o t h a t e x t e n d , t h e f i r s t h a l f o f t h e s e c o n d p a r t r e l a t e s
264
to the process of ODR and the second half relates to the ODR
architecture.
s ys t e m t o b e c o m p l e t e , i t m u s t p r o v i d e a p r o c e s s t h at t a k e s
r e s o l u t i o n m e t h o d s e x a m i n e d i n p a r t o n e . It e n v i s i o n s a t h r e e
p r e v e n t i o n . 467 T h e f i r s t h a l f t a k e s a c l o s e r l o o k t o o n l i n e
p r o c e s s a n d ex a m i n e s i n d e p t h t h e c o n c e r n s a n d o b j ec t i o n s
a g a i n s t i t . It e x a m i n e s t h e e n t i r e p r o ce s s o f o n l i n e a r b i t r a t i o n
f r o m t h e a r b i t r at i o n a g r e e m e n t , t o t h e p r o c e d u r e , t o t h e o u t c o m e
o f t h e p r o c e s s . In p a r t i c u l a r , i t a d v o c a t e s t h e n e c e s s i t y o f o n l i n e
a r b i t r a t i o n c a n p r o v i d e t h e e s s e n t i a l fi n a l i t y a s w e l l a s p r o v i d e
s o l u t i o n s t o d i s p u t es t h a t d o n o t l e n d t h e m s e l v e s t o c o m p r o m i s e .
d i s p u t e r e s o l u t i o n p r o c e d u r e g i v e s r i s e s t o c e r t a i n i s s u es a n d
s e c o n d p a r t a n s w e rs t h e q u e s t i o n s d u r i n g t h e e x am i n a t i o n o f t h e
467
Hereafter referred to as ODP.
265
key parts of an online arbitration process, i.e. the agreement, the
T h e s e c o n d h a l f o f t h e s e c o n d p a r t en v i s i o n s O DR a s a
c o m p l e t e s ys t e m a n d i l l u s t r a t e s a l l t h e k e y f a c t o r s f o r i t s
s t r u c t u r e . It e n v i s i o n s a n i n t e r n a t i o n a l O D R s ys t e m t h a t w i l l b e
a n d s u p e r v i s i o n a n d c o o p e r a t i o n o n a n i n t e r n a t i o n a l l e v el u n d e r
t h e a u s p i c e s o f a g l o b a l o r g a n i z a t i o n . It e n v i s i o n s a g l o b a l
n e t w o r k w i t h o n l i n e c l e a r i n g h o u s e s f o r e v e r y c o u n t r y. T h e
resolution. It e n v i s i o n s a n e t w o r k t h a t w i l l a c c r e d i t O D R
s a f e g u a r d e d t o e n s u r e t h a t t h e O D R s ys t e m w i l l b e b o t h f a i r a n d
f u n d e d . S o m e o f t h e f u n d a m e n t a l p r i n ci p l e s s u c h a s a c c e s s i b i l i t y
a n d t r a n s p a r e n c y a r e i n ex t r i c a b l y c o n n e c t e d t o t h e t e c h n o l o g y
u s e d a n d t h e w a y O D R i s f u n d e d . F i n a l l y, i t e n v i s i o n s a n et w o r k
t h a t w i l l r a i s e a wa r e n e s s a b o u t t h e e x i s t e n c e o f O DR a n d
266
i n c r e a s e u s e r s ’ t r u s t a n d c o n f i d e n c e . In s h o r t , t h e s e c o n d h a l f o f
t h i s p a r t p r o v i d es a c o m p l e t e l a yo u t o f a n O D R s ys t e m f r o m i t s
f u n d i n g a n d i t s t ec h n o l o g i c a l s t r u c t u r e , t o i t s r e g u l a t i o n a n d
A l t h o u g h O D R ex a m p l e s d em o n s t r a t e t h e s u c c e s s o f O DR
f a c t t h a t t h e f i rs t p a r t o f t h e t h e s i s i l l u s t r a t e d t h a t O DR c o u l d
s e r v e a s a s u c c e s s fu l , f a i r a n d e f f e c t i v e w a y t o r e s o l v e d i s p u t e s ,
h o w e v e r , t o d a y t h e s o c i a l i m p a c t o f OD R r e m a i n s l i m i t e d . M a n y
a b o u t t h e ex i s t e n ce o f O D R o r a b o u t i t s g r e a t p o t e n t i a l f o r
s u c c e s s a n d t h e l a ck o f a u n i f o r m f r a m e w o r k f o r O D R i n i t i a t i v e s
t h a t w i l l p r o v i d e c l a r i t y a b o u t O D R s er v i c e s , i n c r e a s e p o t e n t i a l
u s e r s ’ c o n f i d e n c e a n d p r o v i d e w o r l d w i d e s t a n d a r d s t h at w i l l
e n s u r e t h e o p e r a t i o n o f O D R as a fa i r a n d e f f e c t i v e s ys t e m .
d i s p u t es . T h e s e c o n d p a r t o f t h e t h e s i s p r o v i d e s s o l u t i o n s o n a l l
T h e m o d e l d e m o n s t r a t e d i n t h e t h es i s w i l l b e g e n e r a l a s t o
i n c l u d e a l l d i s p u t e s . H o w e v e r , w h e n n e c e s s a r y, t h e v a r i a t i o n s i n
267
t h e g e n e r a l m o d e l w i l l b e a d d r e s s e d i n o r d e r f o r t h e O D R s ys t e m
t o c o v e r t h e s p e c i f i c d e m a n d s o f B 2 C d i s p u t es . T h e s e v a r i a t i o n s
i n c l u d e ex t r a s t e p s i n t h e O D R p r o c e s s , t h e u s e o f d i ff e r e n t
d yn a m i c o f t h e p a r t i e s i n B 2 C d i s p u t e s i . e . t h e p o w e r i m b a l a n c e
268
Title 1
T h e f i r s t h a l f o f t h e s e c o n d p a r t re l a t e s t o t h e O D R
p r o c e s s . P a r t i c u l a r l y, i t d e s c r i b e s h o w t h e O D R p r o c e s s s h o u l d
d i s p u t es . M o r e s p ec i f i c a l l y, t h e f i r s t c h a p t e r d e m o n s t r a t e s t h e
w h i l e i n B 2 C d i s p u t e s a n a d d i t i o n al s t e p i s i n c l u d e d , t h a t o f
o n l i n e d i s p u t e p r e v e n t i o n . C h a p t e r s t wo a n d t h r e e r e l a t e t o t h e
t h i r d s t e p o f t h e p r o c e s s , o n l i n e a r b i t r a t i o n . Th e y d e m o n s t r a t e
t h e n e c e s s i t y o f o n l i n e a r b i t r a t i o n a s p a r t o f t h e p r o c es s a n d
269
Chapter 1
T h e f i r s t c h a p t e r d e m o n s t r a t e s t h e s p e c i f i c s o f a n O DR
o f d i s p u t e s . B a s e d o n t h e ex p e ri e n c e o f t h e A D R m o v em e n t a n d
t h e p a s t ye a r s , t h e t h e s i s i d e n t i f i e s t h e n e e d f o r a m u l t i - s t e p
d i s p u t e r e s o l u t i o n p r o c e s s . T h e f o c u s i n t h i s t h es i s h a s b e e n o n
j u s t i f i e d b y t h e f a c t t h a t t h e s e m e t h o d s r e p r e s e n t t h r e e d i ff e r e n t
b u t a l l f u n d am e n t a l w a ys t o r e s o l v e a d i s p u t e . T h e n e g o t i a t i o n s
b e t w e e n t h e p a r t i e s t h e m s e l v es , t h e r e s o l u t i o n t h r o u g h t h e
i d e a l l y a s e s c a l a t i n g s t e p s o f a c o m p l e t e p r o c e s s . Th e f i r s t
d e m o n s t r a t e s t h e r e a s o n s o f i t s n e c e s s i t y. T h e s e c o n d s e c t i o n
r e l a t e s s p e c i f i c a l l y t o B 2 C d i s p u t e s a n d d e s c r i b e s t h e a d d i t i o n al
s t e p o f O n l i n e D i s p u t e P r e v e n t i o n . Fi n a l l y, t h e t h i r d s e c t i o n
270
examines the U NC IT R A L proposal which also states the
S e c t i o n 1 : A mu l t i - s t e p p r o c e s s
T h e e x a m i n a t i o n o f O D R m e t h o d s a n d s p e c i f i c s ys t e m s i n
ODR. As seen in the first part of the thesis, in 1976 when the
r e b i r t h o f t r a d i t i o n a l A D R s t a r t e d t o g a i n p o p u l a r i t y, t h e v i s i o n
l e a d t o t h e r e s o l u t i o n o f e v e r y d i s p u t e . In f l u e n c e d b y t h o s e i d e a s
d i s p u t e i n i t i a l l y t h r o u g h n e g o t i a t i o n ; i f t h a t d o e s n o t w o rk t h e y
271
Although the best place to resolve any dispute is as early
d i s p u t e g o e s o n , t h e m o r e i s s u e s t h at n e e d t o b e r e s o l v e d i n
order for the parties to feel the matter has been dealt with and in
g e n e r a l t h e h a r d e r i t i s t o r e s o l v e t h e d i s p u t e; h o w e v e r , m o s t
d i s p u t e r e s o l u t i o n s ys t e m s a r e d e s i g n e d l i k e l o c k s i n a c a n a l , i n
d i s p u t e a n d t h i s w a y t h e s ys t e m a l l o w s b o t h f o r a f a s t e r
t h e e a r l i e r s t e p s a r e n o t a b l e t o g e n e r a t e a r e s o l u t i o n . 468
T o d a y, t h e s a m e p r i n c i p l e s c a n b e m o d i f i e d a n d a p p l i e d t o
t h e f i e l d o f O D R . It i s d i f f i c u l t t o c o m p a r e t h e d i f f e r e n t m e t h o d s
b e c a u s e t h e m o s t s u i t a b l e O DR m e t h o d d e p e n d s o n t h e t yp e o f
case. For example, it is well known that for family disputes the
t h e c o n t r a r y, f o r e - c o m m e r c e d i s p u t e s t h e p r e f e r a b l e m e t h o d m a y
468
“For example, if an employee in a corporation is beginning to feel that her workplace is
uncomfortable, it does not make sense for that employee immediately to jump into formal labor
arbitration. Initially the employee may discuss the situation with her supervisor and ask for certain
changes to be made in the working environment. If that strategy is not successful in resolving the
matter, she may contact the human resources department. Should internal mechanisms prove
inadequate for resolving the concerns of the employee, the employee might ask that an outside
mediator be brought in to attempt to resolve the situation. If that is not successful, the matter may
escalate to arbitration and/or a court proceeding”. See RULE Colin, op. cit., pp. 290, 291.
272
v a r y; f o r e x a m p l e f o r p u r e l y m o n e t a r y d i s p u t e s t h e e f f i c i e n c y,
o c c a s i o n s p r o v e t o b e m o s t s u i t a b l e . In o r d e r t o h a v e e f f i c i e n t
norm in ODR. Only this way may parties take advantage of the
“ C yb e r s e t t l e ” , w h i ch a l l o w s p a r t i e s t o u s e t h e d i s p u t e r e s o l u t i o n
w i t h o u t a r e s o l u t i o n . P a r t i e s wi l l at t e m p t t o s e t t l e t h r o u g h
“ C yb e r s e t t l e ” a n d t h r o u g h o n l i n e n e g o t i a t i o n a n d i f a s e t t l e m e n t
i s n o t p o s s i b l e t h e y w i l l u s e A A A ’ s d i s p u t e r e s o l u t i o n p r o ce s s e s ,
i n c l u d i n g c o n c i l i a t i o n , m e d i at i o n a n d a r b i t r a t i o n . 469
In a n a l o g y w i t h t h e m u l t i - d o o r c o u r t h o u s e , t h i s t h e s i s
i n v o l v em e n t o f t h e “ f o u r t h ” p a r t y. S o t h e f i r s t s t e p w i l l i n c l u d e
273
assisted negotiation or blind-bidding negotiation when
limit of these platforms is that they deal only with repetitive and
s i m p l e d i s p u t e s . Bu t a s a f i r s t s t e p i t w i l l s i g n i f i c a n t l y r e d u c e
The second step will include the attempt to settle with the
h e l p o f a t h i r d p a r t y n e u t r a l ; t h e p r e v a i l i n g m e t h o d a t t h i s s t ep
w i l l b e o n l i n e m e d i a t i o n . It c a n l e a d t o a f a s t s e t t l e m e n t w i t h
relatively little cost and at the same time keep the relationship
e x a m p l e s o f S q u a re T r a d e , e B a y a n d P a yP a l , b o t h a s s i s t e d
T h e e x i s t e n c e o f co n s e n s u a l n o n - b i n d i n g m e t h o d s a t t h e
s e t t l e m e n t c a n b e r e a c h e d . 470 M e d i a t i o n p r o v i d e d i n c o n j u n c t i o n
w i t h a d j u d i c a t i o n an d a t t e m p t e d b e f o re a d j u d i c a t i o n a l l o w s f o r
470
EU study on the Legal analysis of a Single Market for the Information Society, op. cit., p. 10.
274
the resolution of disputes and removes disputes at an earlier
stage without the need for adjudication. However, the fact that
a s a n e x t s t e p a l l o ws t h e m t o b e m o r e ef f i c i e n t a s t h e p a r t i e s a r e
f o r m a l i t y, c o s t s a n d t i m e c o n s u m p t i o n . F u r t h e r m o r e , a cc e s s t o
m e d i a t i o n , s i n c e l a ck o f a v a i l a b l e o r a cc e s s i b l e a d j u d i c a t i o n m a y
e n t i t l em e n t s . 471 H o w e v e r , “ s u c h a n a p p r o a c h s h o u l d n o t c o n s i d er
i n c o n j u n c t i o n t o a d j u d i c a t i o n ” . 472 T h e e v o l u t i o n o f d i s p u t e
r e s o l u t i o n a n d t h e s u c c e s s o f c o n s e n s u al n o n - b i n d i n g m e t h o d s i n
t r a d i t i o n a l A D R s u g g e s t t h a t i t i s l i k el y n o n - b i n d i n g m e t h o d s o f
j u s t i c e , c l a s s i c a l a rb i t r a t i o n i n cl u d e d . 473
471
HÖRNLE Julia, op. cit., pp. 57, 58.
472
CORTES Pablo, op. cit., p. 20.
473
“A reflection of what the French legal philosopher Mireille Delmas-Marty calls ‘veritable
triomphe du mou, du flou, du doux’ (blandly, ‘the true victory of soft law’)”. See KAUFMANN-
KOHLER Gabrielle, Online Dispute Resolution and its Significance for International Commercial
Arbitration, Global Reflections on International Law, Commerce and Dispute Resolution, 2005,
pp. 19, 20.
275
The third step of the process will be online arbitration.
f o r f u r t h e r a n a l ys i s . T h i s p a r t o f t h e t h es i s w i l l h o w e v e r ex a m i n e
a r b i t r a t i o n i n t r a d i t i o n a l A DR , a l s o o n l i n e a r b i t r a t i o n i n O D R
c o u n t e r p a r t t r a d i t i o n a l a r b i t r a t i o n , b u t a l s o f r o m o t h er O D R
m e t h o d s . Un f o r t u n a t e l y, m o s t O D R i n i t i a t i v e s a s w e l l a s t h e
s c h o l a r s h i p o n O DR h a s f o c u s e d m o r e o n n o n - b i n d i n g O D R
n e g o t i a t i o n . 474 “ A r b i t r a t i o n i s p r o b a b l y t h e l e a s t p o p u l a r O DR
m e t h o d f o r t h e r e s o l u t i o n o f c o n s u m e r d i s p u t es , e s p e c i a l l y a t a n
i n t e r n a t i o n a l l e v e l ”. 475 T h i s t h e s i s a i m s t o r e m e d y t h i s i n j u s t i ce
a n d i l l u s t r a t e t h a t t h e u n i q u e a d v a n t ag e s o f o n l i n e a r b i t r a t i o n
474
“ODR scholarship is fairly limited. Most commentators mainly have discussed use of the
Internet for filing, scheduling, and managing ADR processes, or for numbers-focused processes
such as Cybersettle’s ‘double blind-bidding’ that gathers parties’ confidential settlement offers and
demands and determines if and what settlement the parties should mutually accept. Furthermore,
articles and reports have provided more facial discussion of ODR’s inevitability with the rise of e-
communities and the Internet-savvy generation, or have focused on jurisdiction or technical
aspects of encryption and Internet security. This has left binding online arbitration largely
overlooked”. SCHMITZ J. Amy, op. cit., pp. 6, 7.
475
CORTES Pablo, op. cit., pp. 68, 69.
276
d i s p u t es . 476 T h e p r e v i o u s p a r t i l l u s t r a t e d t h e l i m i t a t i o n s o f co u rt
a r b i t r a t i o n p r o v i d es a c c e s s t o j u s t i ce b e c a u s e i t w i d e n s t h e
o f In t e r n e t d i s p u t e s t h a t c a n n o t b e s o l v e d b y a n y o t h e r m e a n s . 477
A s s t a t e d s o m e s p e c i f i c m e n t i o n s d u r i n g t h i s p a r t wi l l
a d d r e s s i s s u e s r e l a t e d t o B 2 C d i s p u t e s . In B 2 C d i s p u t es t h e t r e e
o f O D R . A l t h o u g h , t e c h n i c a l l y O D P a i m s t o t h e a v o i d an c e o f
d i s p u t e a n d n o t t h ei r r e s o l u t i o n , i t i s n o n e t h e l e s s a n i m p o r t a n t
S e c t i o n 2 : O n l i n e D i s p u t e Pr e v e n t i o n
p a r t o r a c o m p l e m en t t o O D R i s a m a t t e r o f o p i n i o n . B e s i d e s , a s
476
Currently, adjudicatory online dispute resolution processes are rare among ODR alternatives,
with one study indicating that such arbitration-like processes handled only 1% of cases settled
online. This is despite the rise in Internet transactions. See SCHMITZ J. Amy, op. cit., p. 18.
477
HÖRNLE Julia, op. cit., pp. 220, 225.
277
w i l l b e d em o n s t r a t e d , s o m e o f t h e s a m e e n f o r c e m e n t m e c h a n i s m s
e x a m i n e d i n t h e f i r s t p a r t o f t h e t h es i s h a v e a d u a l f u n c t i o n
before the dispute arises and at its end, which blurs the clear
b o r d e r s b e t w e e n O D R a n d O D P . T h i s t h e s i s c o n s i d e r s OD P a s a
c l e a r e r d a y b y d a y i n d i s p u t e r e s o l u t i o n i s t h a t O DP w i t h i t s
f o u n d a t i o n f o r a n e ff i c i e n t d i s p u t e r e s o l u t i o n s ys t e m . O D P r e f e r s
t o t h e u s e o f IC T f o r t h e e m p l o ym e n t o f m e c h a n i s m s t h a t a i m t o
d e a l w i t h p o t e n t i al d i s p u t es a t a n e a r l y s t a g e a n d e i t h e r p re v e n t
d i s p u t e r e s o l u t i o n p r o c e d u r e . 478
a n d u s e r s t o a t t em p t a l l t h e m o r e c o n f l i c t p r e v e n t i o n . T h i s
r e d u c e s t h e n u m b er o f c o n f l i c t s t h a t e s c a l a t e t o d i s p u t e s a n d
valuable to the parties as ODR will deal with the hard cases
w h e r e t h e r e a r e c o n c e r n s o f i m p a r t i a l i t y, c o m p l e x i t i e s i n c a s e s
478
“Colin Rule, Director of eBay’s ODR services, undoubtedly the person with the best
understanding of the workings and finalities of ODR, mentions for instance that when he arrived at
eBay, almost no one used the word ‘dispute’ and terms such as ‘report [and] complaint’ were the
normal language. He then goes on to describe one of the main strengths of ODR at eBay as the
possibility to handle complaints so early on that ‘we were able to resolve the issue before it
became a dispute’”. See SCHULTZ Thomas, Online Dispute Resolution: an Overview and
Selected Issues, op. cit., p. 16.
278
and lack of trust. For instance, in a B2C transaction the use of
a n e x t e r n a l O D R p ro v i d e r w i l l b e e m p l o ye d o n l y i f t h e b u ye r a n d
t h e m e r c h a n t a r e n o t a b l e t o r e s o l v e t h e d i s p u t e i n t e r n a l l y. T h i s
w a y O D P r e d u c e s t h e n e e d f o r ex t e rn a l r e s o l u t i o n p r o c e d u r e s
a n d s a v e s b u s i n e s s e s a n d c o n s u m e r s ’ t i m e a n d m o n e y. In C 2 C
t r a n s a c t i o n s , E B a y i s a g a i n a p r i m e e x a m p l e . “E B a y’ s i n - h o u s e
O D R p r o c e s s h a s re s o l v e d h u n d r e d s o f m i l l i o n s d i s p u t e s , w h i l e
S q u a r e T r a d e r e s o l v e d j u s t o v e r t w o m i l l i o n i n i t s l i f e t i m e ” . 479
p r e v i o u s l y h a v e a l s o a d u a l r o l e a s OD P m e c h a n i s m s , b e c a u s e
p o t e n t i al d i s p u t e s . M e c h a n i s m s b a s ed o n r e p u t a t i o n a re a l s o
O D P m e c h a n i s m s . In C 2 C t r a n s a c t i o n s , f e e d b a c k s ys t e m s l i k e
t h e e B a y f e e d b a c k r a t i n g s ys t e m c a n i n f o r m b u ye r s b e f o r e h a n d
n e u t r a l f e e d b a c k a n d t h e r e f o r e a v o i d d e a l i n g w i t h u n re l i a b l e
o n e s . In B 2 C t r a n s a c t i o n s , T r u s t m a r k s c a n a s s u r e c o n s u m er s t h a t
p r a c t i c e f o r p r i v a c y, d i s p u t e r e s o l u t i o n a n d e - c o m m e r c e a n d
479
CORTES Pablo, op. cit., pp. 59- 64.
279
consequently operate as a way to identify reputable businesses.
a s s i s t a n t s w h i c h a r e m e c h a n i s m s t h a t u s e s o f t w a r e i n o rd e r t o
r e p r e s e n t a t i v e e x am p l e i s t h e “ H o w a r d S h o p p i n g A s s i s t a n t ”
D e n m a r k . 480 R e p u t a t i o n m e c h a n i s m s e m p o w e r u s e r s i n o n l i n e
operate.
F i n a l l y, a n o t h e r p o p u l a r a n d e f f e c t i v e O D P m e c h a n i s m i s
t h e u s e o f i n t e r n al c o m p l a i n t p r o c ed u r e s , s u c h a s c u s t o m e r
s e r v i c e d e p a r t m e n t s , w h e r e t h e u s e o f IC T c a n h e l p p r e v e n t
p r o m o t e d b y b u s i n e s s e s b e f o r e t h e u s e o f e x t e r n a l O DR . A
t h e c u s t o m e r s e r v i ce d e p a r t m e n t h a s b e e n u n a b l e t o r e s o l v e t h e
480
“The consumer only has to type the domain name of the business and the software will deliver
the following information: when the website was registered/updated, the results of an archive.org
search, which shows the images of the website of the online business during the last few years,
official company register information, the results of a Google search excluding the website of the
online business, the adherence of the online business to a Trustmark scheme, the existing
trustmarks in the country where the online business is based, the general limitation period, e.g. a
minimum of two years, the general cancellation period, i.e. 14 days, examples of website
comparison in the country of the online business and contact information of the national ECC”.
Ibid., pp. 59- 64.
280
b u s i n e s s h a s p u t a g o o d f a i t h e f f o r t an d h a s d o n e a l l i t c a n t o
r e s o l v e t h e m at t e r . 481
S e c t i o n 3 : T h e U NC I T R A L p r o p o s a l
A t t h i s p o i n t t h e e x a m i n a t i o n o f t h e U N C IT R A L i n i t i a t i v e
w o u l d b e b e n e f i c i al s i n c e i t c a n o p er a t e a s a n ex a m p l e o r a
C o m m i s s i o n o n In t e r n a t i o n a l T r a d e La w ” ( U N C IT R A L) , w h i c h
w a s e s t a b l i s h e d b y t h e “ U n i t e d N a t i o n s G e n e r a l A s s e m b l y” b y
r e s o l u t i o n 2 2 0 5 ( XX I) o f 1 7 D e c e m b e r 1 9 6 6 , i s t h e l e g a l b o d y o f
l a w . O n e o f t h e s e a re a s i n c l u d e s d i s p u t e r e s o l u t i o n ” . 482
T o s p e c i f i c a r e a s o f r e s e a r c h a n d d e v e l o p m e n t , U NC IT R A L
w o r k i n g g r o u p s . U N C IT R A L c r e a t e d W o r k i n g G r o u p II I t o
481
RULE Colin, op. cit., pp. 289, 290.
482
A Guide to UNCITRAL. Basic facts about the United Nations Commission on International
Trade Law, United Nation, Vienna 2013 available at
http://www.uncitral.org/pdf/english/texts/general/12-57491-Guide-to-UNCITRAL-e.pdf
281
research ODR as a solution to overcome issues related to e-
e l e m e n t s a n d p a r t i cu l a r l y B 2 B a n d B 2 C t r a n s a c t i o n s . T h e p r o j e c t
i n a d e q u a t e f o r a d d r e s s i n g l o w - v a l u e / h i g h - v o l u m e , c r o s s -b o r d e r
c o n t r o v e r s y a n d b e c a u s e o f c o m p l ex i t i e s i n t h e c r o s s -b o r d e r
c o n t e x t r e g a r d i n g j u r i s d i c t i o n a n d a p p l i c a b l e l a w ” . 483
T h e W o r k i n g G r o u p II I i s s u e d d r a f t p r o c e d u r a l r u l e s t o b e
e l e m e n t s a n d p a r t i cu l a r l y B 2 B a n d B 2 C t r a n s a c t i o n s . T h e g o a l i s
c o n s e q u e n t l y g i v e a p u s h t o O D R . T h e O D R m o d e l p r o p o s ed i s a
c o n c i l i a t i o n s t e p a n d a n a r b i t r a t i o n s t ep . A s a f i r s t s t e p , p a r t i e s
u s e n e g o t i a t i o n f o r t h e r e s o l u t i o n o f t h e i r d i s p u t e . As a s e c o n d
483
DUCA D. Louis, RULE Colin, LOEBL Zbynek, op. cit., pp. 17- 28.
282
p a r t y, p e r h a p s t h e o n e i n v o l v e d i n t h e c o n c i l i a t i o n , r e s o l v e s t h e
U N IC T R A L a p p r o a c h e s t h e O D R f r a m e w o r k f r o m t h e
p e r s p e c t i v e o f i t s p r e v i o u s w o r k o n a r b i t r a t i o n . In a n a t t e m p t t o
p r o v i d e p r a c t i c a l av e n u e s o f r e d r e s s f o r s m a l l - v a l u e d i s p u t e s
u s i n g c o u r t s a s e n f o r c e m e n t m e c h a n i s m s . In s t e a d i t m a k e s a s h i f t
a g r e e t o p a r t i c i p a t e i n O D R a n d c o m p l y w i t h a s e t t l em e n t o r
d e c i s i o n . 484 U n f o r t u n a t e l y t h e p r o p o s e d m o d e l b y U N IC T R A L
s e v e r a l o f t h e d r a w b a c k s o f O D R es p e c i a l l y c o n c e r n i n g t h e
s t r u c t u r e o f t h e O D R s ys t e m a n d t h e e n f o r c e m e n t o f d e c i s i o n s
e f f e c t i v e O D R s ys t e m . C o n t r a r y t o t h a t , t h i s t h e s i s o v e r t h e
s ys t e m a n d d e s c r i b e s i t s e n t i r e a r c h i t e c t u r e .
484
HÖRNLE Julia, op. cit., pp. 4- 9.
283
Chapter 2
process
a r b i t r a t i o n . A s s t at e d , o n l i n e a r b i t r a t i o n w a s c r e a t e d b y t h e
s yn e r g y o f t r a d i t i o n a l a r b i t r a t i o n a n d IC T . In o r d e r t o p r o v i d e a
t r a d i t i o n a l a r b i t r a t i o n i s a n A DR m et h o d i n w h i c h a t h i r d n e u t r a l
d e c i s i o n . It i s c h a r a c t e r i z e d a s a q u a s i - j u d i c i al m e t h o d s i n c e i t
w h i c h c a n b e e n f o r c e d l i k e a c o u r t j u d g e m e n t . It i s h i g h l y
p r e f e r r e d i n b u s i n e s s d i s p u t e s a s i t a l l o w s f o r c o n f i d e n t i al i t y a n d
e x p e r t d e c i s i o n m a k e r s , p r i v a c y a n d c o n f i d e n t i a l i t y, a n d r e l a t i v e
w i t h a r b i t r a t i o n p r o v i s i o n s u t i l i z e d i n a l l k i n d s o f c o n t r a ct s ” . 485
485
STIPANOWICH J. Thomas, op. cit., p. 4.
284
Recognition and Enforcement of Foreign Arbitral Awards” has as
t h a n c o u r t d e c i s i o n s f r o m o v e r s e a s ” . 486
T h e f i r s t p a r t o f t h e t h e s i s a l s o b r i ef l y e x a m i n e d o n l i n e
a r b i t r a t i o n a n d p r o v i d e d a d e f i n i t i o n an d a b e t t e r u n d e r s t a n d i n g
t h r o u g h t h e u s e o f IC T t o o l s i n w h i c h a t h i r d n e u t r a l p a r t y
c h o s e n b y t h e p a r t i e s t o a d i s p u t e , o r n o m i n at e d b y t h e O D R
p r o v i d e r c h o s e n b y t h e p a r t i e s , r e n d e rs a d e c i s i o n o n t h e c a s e
a p p r o p r i a t e e v i d e n ce . O n l i n e a r b i t r a t i o n a p p e a r e d a s a n e v o l v e d
f o r m s i n w h i c h o n l i n e a r b i t r a t i o n m ay a p p e a r i n c l u d e o n l i n e
b i n d i n g a r b i t r a t i o n a n d o n l i n e n o n - b i n d i n g a r b i t r a t i o n . 487
s e v e r a l O D R p r o v i d e r s o f f e r i n g o n l i n e a r b i t r a t i o n . 488 D u e t o i t s
486
CORTES Pablo, op. cit., pp. 68, 69.
487
BADIEI Farzaneh, Online Arbitration Definition and its Distinctive Features, In Proceedings of
ODR, 2010, p. 93.
488
CORTES Pablo, op. cit., pp. 106 107.
285
international arbitration and there are no insurmountable
c o m m e r c i a l a r b i t r a t i o n r u l e s ” . 489 E x a m p l e s o f w e l l - e s t a b l i s h ed
“ V i r t u a l M a g i s t r a t e” , “ O n l i n e R e s o l u t i o n . c o m ” , “ N o v a - Fo r u m ” ,
t h e “ A m e r i c a n A rb i t r a t i o n A s s o c i a t i o n ” ( A A A ) , t h e “B e t t e r
( N A F ) , t h e “ W o r l d In t e l l e c t u a l P r o p e r t y O r g a n i z a t i o n ” (W IP O )
A r b i t r a t i o n a n d M ed i a t i o n C e n t r e , t h e “ J u d i c i a l A r b i t r a t i o n a n d
M e d i a t i o n S e r v i c e s ” ( J A M S ) a n d t h e “ In t e r n a t i o n a l C h a m b e r o f
a r b i t r a t i o n p a n e l s f o r t h e Li b r a r y o f C o n g r e s s , f o r t h e U S A i r
F o r c e , t h e D e p a r t m e n t o f t h e In t e r i o r , t h e N a t i o n a l F i n a n c e
C e n t e r , a n d t h e In t e r n a l R e v e n u e S e r v i c e ” . 490 In t e r n a t i o n a l l y, t h e
“ In t e r n a t i o n a l C h a m b e r o f C o m m e r c e ” o f f e r s t o p a r t i e s t h e
a b i l i t y t o t a k e a d v a n t a g e o f o n l i n e a r b i t r a t i o n t h r o u g h a we b s i t e
T h i s p a r t o f t h e t h es i s ex a m i n e s o n l i n e a r b i t r a t i o n i n d e p t h
a s a n e s s e n t i a l p a r t o f t h e O DR p r o c e s s . T h e f i r s t s e c t i o n o f t h i s
286
integral part of the ODR process as well as its numerous
d i s p u t es o n l i n e . U n f o r t u n a t e l y, o n l i n e a r b i t r a t i o n d i f f e rs f r o m
out of its unique nature. There are the general drawbacks that
a r e c o m m o n t o a l l O D R m e t h o d s s u c h a s t e c h n o l o g i c a l i s s u es
a d v a n c e s ) , b u t t h e re a r e a l s o l e g a l i s s u e s c o n n e c t e d m a i n l y t o
( a r b i t r a l a w a r d s ) w h i c h a r e e n f o r c e a b l e . 491 T h e e n f o r c e a b i l i t y o f
d e p e n d e n c e b y l a w s e i t h e r n a t i o n a l o r i n t e r n a t i o n a l . “O n l i n e
g r e a t e s t p o t e n t i a l , b u t i t a l s o r a i s e s t h e m o s t i s s u e s ” . 492 These
i s s u e s r e s u l t f r o m t h e f a c t t h a t t h e c o m m u n i c a t i o n t a k es p a r t
and awards.
491
MANEVY Isabelle, op. cit., p. 34.
492
SCHULTZ Thomas, Does Online Dispute Resolution Need Governmental Intervention? The
Case for Architectures of Control and Trust, North Carolina Journal of Law and Technology, vol.
6, Is. 1, 2004, p. 75.
287
The issues relating to online arbitration are being explored
p a r t i c u l a r l y r e l a t e t o t h e c o n c l u s i o n o f a r b i t r a t i o n c o n t r ac t s i n
t h e e n f o r c e m e n t o f a w a r d s . S e c t i o n s t w o a n d t h r e e o f ch a p t e r
a r b i t r a t i o n n e c e s s a ry i s t h e f a c t t h a t c o n t r a r y t o o t h e r m e t h o d s ,
n e u t r a l h a s d e c i s i o n - m a k i n g a u t h o r i t y. W h e r e t h e o t h e r m e t h o d s
d i f f e r e n t a s i t f o c u s e s o n e a c h p a r t y’ s r i g h t s a n d e n t i t l e m e n t s .
288
p o s s i b i l i t y t o r e c o u r s e t o a n a d j u d i c a t i v e m e t h o d a t t h e en d o f
s i n c e s e t t l em e n t r e p r e s e n t s a s t e p a w a y f r o m l a w . 493 S e t t l e m e n t i s
s i t u a t i o n i r r e s p e c t i v e o f e a c h p a r t y’ s r i g h t s a n d e n t i t l em e n t s ,
f o c u s i n g o n m o v i n g a c a s e a l o n g , r e g a r d l e s s o f w h et h e r j u s t i c e
h a s b e e n d o n e o r n o t . O n t h e c o n t r ar y a r b i t r a t i o n i s a t r u t h -
seeking process that fulfills the parties’ need for a day in court,
i n a m a t t e r o f s p e a k i n g . M o r e i m p o rt a n t l y, n o t a l l d i s p u t e s c a n
b e s o l v e d t h r o u g h s e t t l e m e n t . In s o m e c a s e s “ t h e u n d e r l yi n g
i n t e r e s t s o f t h e p a rt i e s c a n n o t b e a l i g n e d ” ; 494 t h e s e d i s p u t es d o
redress.
s e t t l e m e n t s i n s t e a d o f d e c i s i o n s i s n o t a r e s u l t o f t h e s u p er i o r i t y
o f t h e f o r m e r i n a ch i e v i n g j u s t i c e ( o n t h e c o n t r a r y) , b u t r a t h e r
493
“Brutally simplified, an over-development of settlement as a means of dispute settlement would
be reminiscent of a family in which the parents systematically negotiate for peace with their
children, instead of facing the more draining tasks of parenthood, giving force to the values
forming their educational ideals”. See SCHULTZ Thomas, Online Dispute Resolution: an
Overview and Selected Issues, op. cit., p. 45.
494
HÖRNLE Julia, op. cit., pp. 55- 58.
289
t r a d i t i o n a l a r b i t r a t i o n t h e s e c o m p l ex i t i e s i n c l u d e p r o ce d u r a l
f o r m a l i t i e s a n d i n cr e a s e d c o s t s ; i n t h e o n l i n e e n v i r o n m e n t t h e
c o m p l ex i t i e s c o n c e rn m o s t l y t h e p e r c e i v e d l e g a l d i f f i c u l t i e s a n d
r e d r e s s a n d f a i r n e s s b y p r o d u c i n g u n f a i r s e t t l e m e n t s . 496 A l s o i n
p r e s s u r e t h e o t h e r “m a y b e m o r e a d e q u a t e f o r c o r r e c t i n g p o s s i b l e
a b u s e s o f p o w e r ” . 497 F o r a l l t h e a b o v e r e a s o n s i t i s c l e a r t h a t i n
o r d e r f o r a n O D R s ys t e m t o b e e f f e c t i v e a n d t r u l y p r o v i d e a c c e s s
p r o v i d e d a s t h e f i n al s t e p o f t h e O D R p r o c e d u r e .
495
“In 2003, the co-founder, President and CEO of SquareTrade, which a few years ago was by far
the most successful ODR provider, mentioned that online arbitration would in principle have been
the first choice, but that because of the legal complexities of arbitration, they decided to
‘downgrade’ the services to online assisted negotiation and online mediation”. SCHULTZ
Thomas, The Roles of Dispute Settlement and ODR, op. cit., pp. 8- 15.
496
“By way of illustration, if each party bears its own costs, the claimant’s desire to settle could be
expressed as S>A – CC (‘S’ standing for settlement, A being the adjudicated decision and CC the
claimant’s costs). The defendant’s desire to settle could be expressed as S<A+CD (CD standing
for the costs of the defendant). Therefore, if the claimant’s costs are very high, the claimant will be
prepared to settle low. If the defendant’s costs are very high, the claimant can obtain a settlement
substantially exceeding the adjudicated decision. However, in a court system, where the loser pays
the winner’s cost, assuming that it is clear that the claimant will win, the respective settlement
desires would be S>A (claimant) and S< A+CC+CD (defendant). Hence, if the costs of either
party are very high, the claimant could obtain a settlement vastly exceeding the adjudicated
decision”. See HÖRNLE Julia, op. cit., pp. 52, 53.
497
CORTES Pablo, op. cit., p. 105.
290
A. Online arbitration versus litigation and traditional
arbitration
M o s t o f t h e a d v a n t ag e s t h a t d i f f e r e n t i a t e o n l i n e a r b i t r a t i o n
a d v a n t a g e s o f O D R . In s h o r t , t h e s e i n c l u d e c o n v e n i e n c e , t i m e,
c o s t , t r a v e l a n d e v e n p a p e r s a v i n g s . H o w e v e r , o n l i n e a r b i t ra t i o n
i m p o r t a n c e . Li t i g a t i o n a n d t r a d i t i o n a l ar b i t r a t i o n a r e a d v e r s a r i a l
p r o c e d u r e s t h a t c an v e r y o f t e n c r e a t e p o w e r i m b a l a n c e s , m a k e
the costs may rise even higher because of the formalities and
d e l a ys r e l a t e d t o t h e p r o c e e d i n g s . O n t h e c o n t r a r y, o n l i n e
p r o c e e d i n g s a n d c o n s e q u e n t l y t h e c o s t s o f l e g a l f e e s , 498 a s w el l
498
“The comfort and freedom from having to go into a courtroom or other formal hearings also
may allow consumers to forgo or minimize costs of legal representation. Parties often feel
compelled to pay the costs of hiring attorneys when they face intimidating or unfamiliar
proceedings, but may feel less pressure to employ attorneys in online arbitration involving fewer
291
as reduces the hostility between the parties since the resolution
i n s t e a d o f at t e n d i n g n e r v e - w r e c k i n g f o r m a l m e e t i n g s . B u t , t h e
and traditional arbitration is the fact that the parties can resolve
t h e d i s p u t e m u c h fa s t e r . O n l i n e a r b i t ra t i o n c a n p r o d u c e a f i n a l
a n d b i n d i n g a w a r d i n a m a t t e r o f d a ys o r h o u r s w i t h o u t t h e n e e d
f o r t h e p a r t i e s t o t ra v e l , c o o r d i n a t e s c h e d u l e s o r w a i t m o n t h s f o r
t h a t m a y l e a d t o u n w a n t e d d e l a ys .
B . O n l i n e a r b i t r a t i o n ve r s u s o t h e r O D R m et h o d s
O n l i n e a r b i t r a t i o n a s o n e o f t h e O D R m e t h o d s e n j o ys a l l
a n d c o s t e f f i c i e n cy. B u t , a m o n g t h e O D R m e t h o d s , o n l i n e
a r b i t r a t i o n i n p a r t i c u l a r d i s p l a ys s o m e u n i q u e c h a r a c t e r i s t i c s
m e c h a n i s m s r e l a t e t o t h e d e c i s i o n -m a k i n g a u t h o r i t y o f t h e t h i rd
procedural formalities and no F2F dealings. Online arbitration processes also may be more
automated, again easing need for counsel’s direction”. See SCHMITZ J. Amy, op. cit., pp. 26, 27
292
n e u t r a l , t o t h e b i n d i n g n a t u r e o f t h e r e s u l t a n d t o t h e r e l i an c e o f
d i s p u t e i s r e s o l v ed b y a t h i r d p a r t y h a s a r e s u l t t h e f a s t e r
c o u n t l e s s h o u r s ex c h a n g i n g p r o p o s a l s a n d c o u n t e r p r o p o s a l s
n e g o t i a t i o n a n d m ed i a t i o n , i n o n l i n e ar b i t r a t i o n p a r t i e s ca n r e s t
w i l l d e c i d e b a s e d o n t h e m e r i t s o f t h e i r c l a i m s . F i n a l l y, o n l i n e
a r b i t r a t i o n s e e m s t o b e m o r e s u i t e d f o r t h e o n l i n e e n v i ro n m e n t
c o m m u n i c a t i o n b e ca u s e i t m a i n l y i n v o l v e s p a r t i e s ’ ex c h an g e o f
i n f o r m a t i o n , d o c u m e n t s , ex h i b i t s , a n d o t h e r e v i d e n c e . O n l i n e
F 2 F c o n t a c t , a s n o n b i n d i n g d i s p u t e re s o l u t i o n m et h o d s , s i n c e
a n d o t h e r e v i d e n t i a r y s u b m i s s i o n s o n t h e i r o w n s c h e d u l e s . 499 O n e
o f t h e m o s t u s e d a r g u m e n t s a g a i n s t O DR i n g e n e r a l i s t h e l a c k o f
499
SCHMITZ J. Amy, op. cit., p. 25.
293
language and nonverbal cues. First of all, the advancement of
IC T t o o l s t o d a y a l l o w s f o r t e l e c o n fe r e n c i n g t h o u g h s e v e r a l
s o f t w a r e p r o g r a m s i n a n e a s y a n d a f f o r d a b l e w a y. B u t r e g a r d l e s s
m e d i a t i o n , w h e r e fa c e t o f a c e i n t e r a c t i o n c a n h e l p c r e a t e a
e s s e n t i a l f o r t h e d i s p u t e r e s o l u t i o n . On t h e c o n t r a r y, i n o n l i n e
v o l u n t a r i l y, b u t o n t h e d e c i s i o n o f t h e t h i r d p a r t y a s a r e s u l t o f
t h e p a r t i e s ’ p r e s e n t a t i o n s o f t h e i r c l a i m s a n d n o t a s a r es u l t o f
c o m p l ex c o m m u n i c at i o n s p r o c e s s t h a n o n - l i n e m e d i at i o n , a n d t h e
t e c h n o l o g y a n d s o f t w a r e r e q u i r e d f o r o n - l i n e a r b i t r a t i o n wi l l , as
a r e s u l t , t e n d t o b e l e s s c o m p l i c a t e d ” . 500 A r b i t r a t i o n i s m o re
s u i t a b l e fo r t h e o n l i n e e n v i r o n m e n t t h a n c o n s e n s u al m e t h o d s
m o s t l y w r i t t e n a n d t o u s e a r b i t r a t i o n fo r d i s p u t e r e s o l u t i o n t h e r e
c o m m u n i c a t i o n s . 501
294
the dispute. Online arbitration provides an end to the dispute
w i t h o u t t h e n e e d t o r e s o r t l a t e r o n t o o t h e r O D R m et h o d s o r
r e s o l u t i o n w i t h o u t t h e l i k e l i h o o d o f d r a g g i n g o n t h e d i s p u t e. 502
In i n t e r n a t i o n a l a r b i t r a t i o n , d e a l i n g w i t h c r o s s - b o r d e r d i s p u t e s ,
the arbitral award often may prove easier to enforce than court
“ U n i t e d N a t i o n s C o n v e n t i o n o n t h e R e c o g n i t i o n a n d E n f o r ce m e n t
Convention”.
H o w e v e r , b e i n g s i n g e d o v e r f i f t y ye a r s a g o , t h e “ N e w
u n d e r r u l e s d e s i g n e d f o r t r a d i t i o n a l a r b i t r a t i o n , i n o rd e r t o
b r o a d l y” . 503 H o w e v e r , “ a l t h o u g h a n e x t en s i v e i n t e r p r e t a t i o n o f
i t s p r o v i s i o n s c a n b e o f s o m e h e l p , i d e a l l y, i t s m o d e r n i z a t i o n
502
RODRIGUEZ Miguel Roberto, op. cit., pp. 9, 10.
503
YÜKSEL, Armağan Ebru Bozkurt, op. cit., pp. 85-87.
295
and amendment is necessary in order to keep track with the
d e v e l o p m e n t s o f m o d e r n s o c i e t y” . 504
W h e n e v e r t h e r e i s a d i s p u t e , t h e f i rs t s t e p i n o r d e r t o
the parties agree that any future disputes arising out of their
t r a n s a c t i o n w i l l b e r e s o l v e d t h r o u g h a r b i t r a t i o n , o r i t ca n b e
formed after the dispute arises for its specific resolution (post-
d i s p u t e a g r e e m e n t ) . T h e a g r e e m e n t c a n b e a s e p a r a t e c o n t ra c t o r
o n l i n e a r b i t r a t i o n b y e - m a i l o r b y r e f e r r i n g t o a n o t h e r d o cu m e n t
c o n t a i n i n g a n a r b i t ra t i o n c l a u s e .
In t h e c a s e o f B 2 C d i s p u t es o n e o f t h e m o s t c o m m o n w a ys
504
HERBOCZKOVÁ Jana, Certain Aspects of Online Arbitration, Journal of American
Arbitration, vol. 1, No. 1, 2001, p. 11.
296
as “browse-wrap” or “click-wrap” agreements, according to
a r b i t r a l t r i b u n al ; h o w e v e r , b e c a u s e o f t h e h i g h v o l u m e o f e -
a n d b u s i n e s s e s t o u s e m o d e l a r b i t r a t i o n a g r e e m e n t s . T h er e a r e
s e v e r a l n a t i o n a l l aw s r e l a t i n g t o a r b i t r a t i o n a g r e e m e n t s , b u t i n
t h e i n t e r n a t i o n a l l e v e l t h e m o s t r e l ev a n t i n s t r u m e n t s ar e t h e
“ N e w Y o r k C o n v e n t i o n ” o f J u n e 1 0 , 1 9 5 8 a n d t h e “ U N C IT R A L
M o d e l La w ” o f 1 9 8 5 w h i c h p r o v i d e s t a n d a r d s f o r a r b i t r a t i o n
v a l i d i t y a n d e n f o r c e a b i l i t y.
297
A. Validity of arbitration agreements and the written
requirement
i n t e r n e t u s i n g IC T t o o l s i n s t e a d o f t h e t r a d i t i o n a l m e a n s o f
i n w r i t i n g i n t h e f i r s t p a r a g r a p h o f A r t i c l e I I. 505 A n d i n t h e
w r i t i n g ” r e q u i r e m e n t . 506
e x p r e s s l y i n c l u d e o n l i n e m e a n s o f co n c l u d i n g t h e a g r e e m e n t ,
505
“Each Contracting State shall recognize an agreement in writing under which the parties
undertake to submit to arbitration all or any differences which have arisen or which may arise
between them in respect of a defined legal relationship, whether contractual or not, concerning a
subject matter capable of settlement by arbitration”. See The United Nations Convention on the
Recognition and Enforcement of Foreign Arbitral Awards of June 10 1958 Article II available at
http://www.newyorkconvention.org/texts
506
“The term ‘agreement in writing’ shall include an arbitral clause in a contract or an arbitration
agreement, signed by the parties or contained in an exchange of letters or telegrams”. See The
New York Convention of June 10 1958 Article II available at
http://www.newyorkconvention.org/texts
298
which is only natural since at the time it was formulated in
a n d a l l t h e c o t e m p o r a r y IC T t o o l s d i d n o t ye t e x i s t . T h e r e f o r e ,
the “New York Convention” does not and could not include the
a g r e e m e n t . 507 C o n t r a r y t o t h e “ N e w Y o r k C o n v e n t i o n ” , t h e
“ U N C IT R A L Model La w on In t e r n a t i o n a l Commercial
t e l e c o m m u n i c a t i o n , 508 a n d “ u s e s t h e c o n ce p t o f ‘ d a t a m e s s a g e s ’,
w h i c h i n c l u d e e l e c t r o n i c d a t a i n t e r c h a n g e ( E D I) , t e l e g r a m , t e l e x
a n d t e l e c o p y, a n d a l l o f w h i c h s a t i s fy t h e r e q u i r e m e n t o f ‘ i n
t o b e u s a b l e f o r s u b s e q u e n t r e f e r e n c e ” . 509
t o a n o t h e r t a n g i b l e d o c u m e n t w h i c h wi l l i n c l u d e t h e a g r e e m e n t
507
HERBOCZKOVÁ Jana, op. cit., pp. 5, 6.
508
The arbitration agreement shall be in writing. An agreement is in writing if it is contained in a
document signed by the parties or in an exchange of letters, telex, telegrams or other means of
telecommunication which provide a record of the agreement, or in an exchange of statements of
claim and defense in which the existence of an agreement is alleged by one party and not denied
by another. The reference in a contract to a document containing an arbitration clause constitutes
an arbitration agreement provided that the contract is in writing and the reference is such as to
make that clause part of the contract. See the UNCITRAL Model Law on International
Commercial Arbitration of 1985 article 7 available at
http://www.uncitral.org/pdf/english/texts/arbitration/ml-arb/06-54671_Ebook.pdf
509
HERBOCZKOVÁ Jana, op. cit., pp. 5, 6.
299
point the advantages of concluding the arbitration entirely
u s i n g IC T t o o l s l i k e e - m a i l s o r b y c l i c k i n g t h e a g r e e b u t t o n o n
a c c e p t e d t o d a y, r e c o n c i l e s t h e “ N e w Y o r k C o n v e n t i o n ” wi t h t h e
t e x t o f t h e f o r m e r i n l i g h t o f t h e l a t t e r . M o r e s p e c i f i c a l l y, i t i s
c o n s i d e r e d t h a t s i n c e t h e N e w Y o r k C o n v e n t i o n i s a v er y o l d
d o c u m e n t , “ d r a f t e d a t a t i m e w h e n w ri t i n g n e c e s s a r i l y m e a n t i n k
o n p a p e r a n d n o t b yt e s o n a h a r d d i s k ” , 510 i t m u s t b e i n t e r p r e t ed
i n t e r n e t a n d IC T t o o l s c a n b e a n a l o g i z e d t o t h e m e n t i o n ed f a x
and telegram so that the convention will not include only the
E l e c t r o n i c c o m m e r c e ” , w h i c h e n s u r e s t h a t c o n t r a c t s ca n b e
c o n c l u d e d b y e l e c t r o n i c m e a n s , 511 a s w e l l a s b y s e v e r a l n a t i o n al
510
KAUFMANN-KOHLER Gabrielle, Online Dispute Resolution and its Significance for
International Commercial Arbitration, Global Reflections on International Law, Commerce and
Dispute Resolution, 2005, pp. 444, 445.
511
“This definition covers any service normally provided for remuneration, at a distance, by means
of electronic equipment for the processing (including digital compression) and storage of data, and
at the individual request of a recipient of a service”. See 2000/31/EC Directive of the European
Parliament and of the Council of 8 June 2000 on certain legal aspects of information society
services, in particular electronic commerce, in the Internal Market ('Directive on electronic
300
laws. For instance, in the United Kingdom the UK “Arbitration
A c t ” o f 1 9 9 6 a c c e p t s a s w r i t i n g f o r m a n yt h i n g b e i n g r e c o r d e d b y
a n y m e a n s . 512 A l s o t h e “ E u r o p e a n C o n v e n t i o n o n In t e r n a t i o n al
C o m m e r c i a l A r b i t r at i o n ” c o n s i d e r s a s a n a g r e e m e n t i n w ri t i n g ,
o n e c o n c l u d e d t h r o u g h l e t t e r s , t el e g r a m s , o r i n a c o m m u n i c a t i o n
b y t e l e - p r i n t e r . 513
In t h e U n i t e d S t at e s o f A m e r i c a t h e r e q u i r e m e n t f o r a
i s i n t e r p r e t e d i n a m o r e l i b e r a l w a y s o t h a t i t i n c l u d e s e l ec t r o n i c
a g r e e m e n t s . 514 T h e s a m e i n t e r p r e t a t i o n i s s u p p o r t e d b y o t h er
i n s t r u m e n t s wi t h s i m i l a r o r i d e n t i c a l w o r d i n g , s u c h a s t h e U S
“ U n i f o r m C o m p u t e r In f o r m a t i o n T r a n s a c t i o n s A c t ” ( U C IT A ) , t h e
301
“ U N ID R O IT P r i n c i p l e s o f In t e r n a t i o n a l C o m m e r c i a l C o n t ra c t s ” ,
a n d t h e “ B r u s s e l s I R e g u l a t i o n ” . 515
C o n c l u s i v e l y, i t i s c e r t a i n l y t i m e t o r e c o g n i z e t h a t t h e
w r i t t e n r e q u i r e m e n t i n A r t i c l e II o f t h e “ N e w Y o r k C o n v e n t i o n ”
T h e r e f o r e a n o n l i n e a r b i t r a t i o n a g r e e m e n t f u l fi l l s t h e w r i t t e n
r e q u i r e m e n t a n d i s c o n s i d e r e d a v a l i d a g r e e m e n t . T e c h n i c a l l y,
t h e a r g u m e n t i s t h a t s i n c e A r t i c l e II ( 2 ) o f t h e “ N e w Y o r k
C o n v e n t i o n ” i n t e r p re t e d b r o a d l y c o n s i d e r s t h a t o n l i n e a r b i t r a t i o n
s u c h a s t h e u s e o f t e l e g r a m s , f u l f i l l t h e w r i t t e n r e q u i r e m en t a n d
s i n c e t h e u s e o f e - m a i l s c a n b e e q u a t e d t o t h e u s e o f t e l eg r a m s ,
mail are valid. The argument follows the same logic to say that
o n l i n e a r b i t r at i o n ag r e e m e n t s , c o n c l u d e d b y a c c e p t i n g t h e “ t e r m s
515
KAUFMANN-KOHLER Gabrielle, Ibid., pp. 444, 445.
516
“The electronic document must include the identity of the parties, the agreement itself (i.e. the
offer and the acceptance), and the content of the agreement (i.e. the specific terms and the general
conditions). This information must be stored in a manner that allows its accessibility for further
evidence and its admissibility as evidence. In other words, this information must be stored using a
technology which permits long-lasting compatibility and which excludes any serious risk of
manipulation of the stored data”. SCHULTZ Thomas, Online Dispute Resolution: an Overview
and
Selected Issues, op. cit., p. 9.
302
exchange of information entirely analogous to the exchange that
t a k e s p l a c e w h e n e - m a i l s o r f a x e s a r e ex c h a n g e d ” . 517
A n o t h e r i m p o rt a n t i s s u e r e l a t i n g t o t h e o n l i n e a r b i t r a t i o n
a g r e e m e n t i s t h at o f c o n s e n t g i v e n b y t h e p a r t i e s t h a t c o n c l u d e
c o n s e n t f o r r e s o l v i n g t h e i r d i s p u t e t h ro u g h a r b i t r a t i o n b y u s i n g
IC T t o o l s , f o r e x am p l e v i a e - m a i l o r b y a g r e e i n g t o a “ t e r m s a n d
r e l a t e s t o t h e s e c u ri t y a n d t h e c o n c e r n i s t h a t t h e s e m e a n s a r e
n o t s e c u r e e n o u g h t o r e l y o n t h e m f o r t h e ex p r e s s o f c o n s e n t .
H o w e v e r , a s a l r e a d y m a d e e v i d e n t t h es e t e c h n o l o g i c a l c o n c e r n s
o f t h e a d v a n c e m e n t s o f t e c h n o l o g y, c r yp t o g r a p h y a n d i n g e n e r a l
O n e o f t h e b e s t w a ys f o r t h e p a r t i e s t o ex p r e s s t h e i r
517
YÜKSEL, Armağan Ebru Bozkurt, op. cit., pp. 85-87.
303
besides the written form, is the use of signatures. The “New
t o b e s i g n e d b y t h e p a r t i e s . Th i s r e q u i r e m e n t i s f u l f i l l e d b y t h e
u s e o f e l e c t r o n i c s i g n a t u r e s b e c a u s e i t i s c o n s i d e r e d t h at t h e u s e
o f a n e l e c t r o n i c s i g n a t u r e , f o r e x a m p l e i n a n e m ai l , ex p r e s s e s
t h a t p a r t y’ s c o n s e n t a n d i s e q u a t e d t o a t r a d i t i o n a l s i g n a t u r e b y
hand.
a u t h e n t i c a t i o n i s a n e n c r yp t i o n t e c h n o l o g y, w h i c h i s e m p l o ye d i n
e l e c t r o n i c c o m m e rc i a l t r a n s a c t i o n s t o e n s u r e o n l i n e b u s i n e s s
s e c u r i t y. 518 T h e e q u a t i o n o f a n e l e c t ro n i c s i g n a t u r e w i t h a
t h e “ U N C IT R A L M o d e l La w o n E l e c t r o n i c S i g n a t u r e s ” a d o p t e d
r e c o g n i t i o n t o m o s t a u t h e n t i c a t i o n t ec h n o l o g i e s , a n d p r o m o t es
p o l i c i e s o n e - s i g n a t u r e i s s u e s . F u r t h er m o r e , t h e “ In t e r n a t i o n a l
C h a m b e r o f C o m m e r c e ” ( IC C ) w i t h s e v e r a l i n i t i a t i v e s s u c h a s
C o m m e r c e ” ( G U ID E C ) , t h e IC C “ e - T e r m s ” o f 2 0 0 4 a n d t h e IC C
c o m m e r c i a l t r a n s a c t i o n s . In E u r o p e t h e o p i n i o n i s a l s o s u p p o r t e d
518
WANG Fangfei Faye, op. cit., pp. 18 – 23.
304
by the EU “Directive on a Community Framework for Electronic
s i g n a t u r e s ” 519 w h i c h p r o m o t e s t h e u s e an d l e g a l r e c o g n i t i o n o f
s e r v i c e r e q u i r e m e n t s f o r m e m b e r s t a t e s . In t h e U n i t e d S t a t e s t h e
a d o p t i o n o f t h e “ El e c t r o n i c S i g n a t u r e s i n G l o b a l a n d Na t i o n a l
C o m m e r c e A c t ” 520 ( E S IG N A c t ) c o n s o l i d a t e s t h e l e g a l e f f e c t a n d
v a l i d i t y o f e l e c t r o n i c s i g n a t u r e s a n d p r o m o t e s c o n s i s t e n cy a n d
c e r t a i n t y r e g a r d i n g t h e u s e o f e - s i g n a t u r e s i n t h e US .
519
“The purpose of this Directive is to facilitate the use of electronic signatures and to contribute
to their legal recognition. It establishes a legal framework for electronic signatures and certain
certification-services in order to ensure the proper functioning of the internal market. It does not
cover aspects related to the conclusion and validity of contracts or other legal obligations where
there are requirements as regards form prescribed by national or Community law nor does it affect
rules and limits, contained in national or Community law, governing the use of documents”. See
Directive 1999/93/EC of the European Parliament and of the Council of 13 December 1999 on a
Community framework for electronic signatures available at http://eur-
lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:31999L0093:en:HTML
520
“Notwithstanding any statute, regulation, or other rule of law, with respect to any transaction in
or affecting interstate or foreign commerce— (1) a signature, contract, or other record relating to
such transaction may not be denied legal effect, validity, or enforceability solely because it is in
electronic form; and (2) a contract relating to such transaction may not be denied legal effect,
validity, or enforceability solely because an electronic signature or electronic record was used in
its formation”. See the Electronic Signatures in Global and National Commerce Act available at
http://www.gpo.gov/fdsys/pkg/PLAW-106publ229/pdf/PLAW-106publ229.pdf
305
C. Arbitrability and pre-dispute arbitration agreements
a g r e e m e n t s . It i s a n i s s u e o f h i g h i m p o rt a n c e b e c a u s e c o n t r a r y t o
o t h e r O D R m et h o d s , o n l i n e a r b i t r a t i o n i s b i n d i n g a n d t h e r e i s a
c o n c e r n t h a t p a r t i es m a y a g r e e t o r e s o l v e t h e i r d i s p u t e t h r o u g h
legal effects of their consent and that their legal due process
d i s p u t es a n d t h e e n fo r c e a b i l i t y o f a g r e e m e n t s t o a r b i t r a t e .
T h e p r o b l e m c o n c er n s m o r e s p e c i f i c a l l y B 2 C d i s p u t e s . In
g e n e r a l , c o n s u m e r d i s p u t es a r e a r b i t r ab l e a s s u b j e c t m a t t e r b u t
j u s t i c e . In p o s t - d i s p u t e a g r e e m e n t s a n d a f t e r a d i s p u t e h a s
521
KAUFMANN-KOHLER Gabrielle, Online Dispute Resolution and its Significance for
International Commercial Arbitration, op. cit., p. 10.
306
possible resolution options and the choice of arbitration is
v o l u n t a r y a n d f u l l y i n f o r m e d . O n t h e c o n t r a r y, i n p r e - d i s p u t e
from the ordering webpage) and thus that the consumer is not
F u r t h e r m o r e , e v e n i f t h e c o n s u m e r i s a w a r e o f t h e e x i s t en c e o f
a n a r b i t r a t i o n c l a u s e i t i s l i k e l y t o b e u n a w a r e o f i t s s i g n i fi c a n c e
t o g i v e a n y t h o u g h t t o t h e i s s u e o f l a t e r d i s p u t e s . In t h e s e c a s e s
a r b i t r a t i o n a g r e e m e n t a f t e r t h e d i s p u t e h a s a r i s e n . 522
p a r t i e s ” . 523 In O D R t h e r e s t r i c t i o n s o n m a n d a t o r y p r e - d i s p u t e
a r b i t r a t i o n c l a u s e s a p p l y e x c l u s i v el y t o c o n s u m e r a r b i t r a t i o n
s e r v i c e s a n d n o t i n o t h e r c i v i l l a w a r e a s , s u c h a s l a n d l o r d -t e n a n t
522
HÖRNLE Julia, op. cit., p. 171.
523
SCHULTZ Thomas, Online Dispute Resolution: an Overview and Selected Issues, op. cit., p. 9.
307
r e l a t i o n s . 524 T h e f i r s t c o n c e r n i s t h a t t h e c h o i c e i s n o t v o l u n t a r y
f r o m t h e c o n s u m e r ’ s s i d e , s i n c e a r b i t r at i o n c l a u s e s a r e i n c l u d e d
i n s t a n d a r d f o r m c o n t r a c t s a n d a r e o f f er e d o n a “ t a k e i t o r l e a v e
i t ” b a s i s . 525
T h e c o n s e n t o f t h e p a r t i e s i s a n es s e n t i a l p r e r e q u i s i t e f o r
m u s t b e b a s e d o n t h e i r o w n f r e e w i l l . In o n l i n e a r b i t r a t i o n , t h e
c o n t r a c t i n g , a n d d u e t o p o w e r i m b a l a n c e i n s u c h c a s es , t h e
i n t o a n a r b i t r a t i o n ag r e e m e n t ” . 526
T h e s e c o n d c o n c e r n i s t h a t c o n s u m e rs a r e i n a n i n f e r i o r
p o s i t i o n s i n c e t h e y a r e o n e - s h o t p l a ye r s c o n t r a r y t o b u s i n e s s e s
w h i c h a r e r e p e a t p l a ye r s c o n d u c t i n g n u m e r o u s a r b i t r a t i o n s e a c h
ye a r a n d b e i n g f a m i l i a r w i t h t h e a r b i t r a t i o n i n s t i t u t i o n an d t h e
524
CORTES Pablo, op. cit., pp. 107, 108.
525
HÖRNLE Julia, op. cit., pp. 171- 173.
526
BADIEI Farzaneh, op. cit., pp. 88, 89.
308
527
procedure. A l s o t h e b u s i n e s s i s u s u a l l y t h e o n e t h a t c h o o s es
( u n c o n s c i o u s ) s ys t e m i c b i a s s i n c e t h e p r o v i d e r m a y r e g a r d t h e
s u p p l i e r a s a r e p e a t c u s t o m e r f o r r e f e r r a l . 528
B e c a u s e o f t h e a b o v e c o n c e r n s c o n s u m e r a s s o c i at i o n s
c o n s u m e r s a n d s e v er a l l a w s h a v e i m p o s e d c e r t a i n r e s t r i c t i o n . In
e v i d e n c e d b y c a s e s s u c h a s J a g u a r c a s e , 529 “ p r e - d i s p u t e c o n s u m er
C o d e , A r t . 2 0 6 1 an d F r e n c h C o n s u m e r C o d e , A r t . L. 1 3 2 ( 2 ) )
d o e s n o t a p p l y t o i n t e r n a t i o n a l s i t u a t i o n s ” . 530 A l s o i n E n g l a n d
a n d W a l e s t h e 1 9 9 6 “ A r b i t r a t i o n A c t ” a n d t h e 1 9 9 9 “U n f a i r
527
O’ HARA A. Erin, Choice of law for internet transactions: the uneasy case for online consumer
protection, University of Pennsylvania Law Review, vol. 153, 2005, p. 1935.
528
HORNLE Julia, op. cit., pp. 171- 173.
529
“The first instance court stated the clause to be illegal, the Court of Appeal reversed that
decision and the Supreme Court admitted the arbitrability of the dispute in the circumstances at
hand (it was a transaction of high value and the consumer was not in a weaker position)”.
CORTES Pablo, op. cit., pp. 109, 110.
530
KAUFMANN-KOHLER Gabrielle, Online Dispute Resolution and its Significance for
International Commercial Arbitration, op. cit., p. 13.
309
T e r m s i n C o n s u m er C o n t r a c t s R e g u l a t i o n ” a l l o w p r e - d i s p u t e
a r b i t r a t i o n a g r e e m e n t s d i f f e r s . M a n y U S s t a n d a r d t er m s i n
e l e c t r o n i c c o n t r a c t s o f t e n i n c l u d e a r b i t r a t i o n c l a u s e s . T h e re i s a
d i s t i n c t i o n b e t w e e n t w o t yp e s o f a g r e e m e n t s , t h e “ b r o w s e -w r a p ”
a g r e e m e n t s a n d t h e “ c l i c k - w r a p ” a g r e e m e n t s . T h e “ b r o w s e- w r a p ”
a g r e e m e n t s a r e i n c l u d e d i n t h e s t a n d a rd “ t e r m s a n d c o n d i t i o n s ”
c o n s u m e r b y a c c e p t i n g t o u s e t h e p r o d u c t s o r s e r v i c e s o f f e re d b y
t h e b u s i n e s s a l s o a c c e p t s t h o s e t e r m s . O n t h e c o n t r a ry, t h e
N e t s c a p e ’ s m o t i o n t o c o m p el a r b i t r a t i o n u n d e r a b r o ws e - w r a p
s o f t w a r e d i d n o t h a v e r e a s o n a b l e n o t i ce o f t h e l i c e n s e a g r e e m e n t
310
c o n t a i n i n g t h e a g r e e m e n t t o a r b i t r a t e” . 531 A s f a r a s t h e c l i c k -
c o u r t s 532 w h e n t h e r e i s a n e x p l i c i t d i s p l ay o f a g r e e m e n t , t h r o u gh
t o t h e t r a n s a c t i o n . 533 E x a m p l e s o f c a s e s , i n w h i c h t h e v a l i d i t y o f
v . I n t e r n a t i o n a l A u t o m o t i v e C o m p o n e n t s c a s e , t h e B l a u v . A T &T
M o b i l i t y c a s e a n d t h e V e r n o n v . Q w es t C o m m u n i c a t i o n s I n t ’ l ,
I n c . c a s e . T h e “ F e d e r a l A r b i t r a t i o n Ac t ” ( F A A ) c o n s i d e r s p r e -
c o n s u m e r c o n t r a c t s . B u t e v e n w h e n t h e F A A d o e s n o t a p p l y,
u n d e r m o s t s t a t e l a w s , c o n s u m e r a r b i t ra t i o n a g r e e m e n t s a r e a l s o
e n f o r c e a b l e . In t h e U n i t e d S t a t e s c o n s u m e r a r b i t r a t i o n cl a u s e s
a r e l e g a l l y b i n d i n g a s e v i d e n t b y t h e r e l e v a n t c a s e l a w . 534
531
KAHN Sherman and KIFERBAUM David, Browse-wrap Arbitration? Enforcing Arbitration
Provisions in Online Terms of Service, New York Dispute Resolution Lawyer, Vol. 5, No. 2, Fall
2012, p. 35.
532
For example, I.Lan systems, Inc. v. Netscout Service Level Corp) on 2 January 2002 and
Lieschke, Jackson & Simon v. Realnetworks Inc.
533
SCHMITZ J. Amy, op. cit., p. 32.
534
“Several US Supreme Court cases have rejected challenges to pre-dispute arbitration clauses in
consumer contracts. “In Hill v. Gateway 2000 an arbitration clause was contained in the general
terms of contract on paper used by a computer vendor which were included in a computer box.
The seventh circuit held with reference to ProCD v. Seidenberg that the consumer was bound by
the terms because he had the opportunity to read them and reject them by returning the product”.
See MANEVY Isabelle, op. cit., p. 39. “In Buckeye Check Cashing, Inc. v Cardegna the court
ruled that the arbitration clause of an alleged illegal and void contract was enforceable. In Allied-
311
Only when the arbitration agreement does not comply with
f u n d a m e n t a l f a i r n es s o r i s f o u n d t o b e o p p r e s s i v e o r h i g h l y
u n r e a s o n a b l e , i t wi l l b e r e c o g n i z e d a s u n e n f o r c e a b l e b y t h e
n e u t r a l i t y o r a b o u t i m p o s i n g e x c e s s i v e a r b i t r a t i o n f e e s . 535 B u t , i n
g e n e r a l f o r a n a r b i t r a t i o n c l a u s e c o n t a i n e d i n a s t a n d a r d “t e r m s
Bruce Terminix Cos. v Dobson the US Supreme Court included consumers within the scope of the
FAA, stating that ‘[the] Congress, when enacting [the FAA] had the needs of consumers, as well
as others, in mind’. In this case the Supreme Court held that Alabama’s statute prohibiting
mandatory pre-dispute arbitration clauses was pre-empted by the FAA”. See CORTES Pablo, op.
cit., pp. 110- 111.
535
“In Comb and Toher v PayPal the judge found PayPal’s arbitration clause unconscionable for
consumers, holding that Santa Clara County in California was not a neutral forum”. Ibid. “The
New York court of appeals was concerned with a similar clause to the one in Hill v. Gateway
2000. The court found that the high cost of the International Chamber of Commerce (ICC)
arbitration made the designation of ICC unconscionable in a consumer context. Nevertheless, it did
not consider that the arbitration clause was invalid. It held that the dispute settlement should be
conducted by the less expensive American Arbitration Association”. See MANEVY Isabelle, op.
cit., p. 39.
312
arbitral procedure which is proven to be fair, inexpensive and
e a s i l y a c c e s s i b l e f o r c o n s u m e r s w o u l d b e c o n s i d e r e d v a l i d . 536
agreements can be used, which are binding for the stronger part y
(i.e. the business), but allow the weaker party (i.e. the
a r b i t r a t i o n o r g o t o c o u r t . 537 T h i s w a y t h e a g r e e m e n t e n s u r e s t h e
f o r t h e w e a k e r p a r t y. If p r e - d i s p u t e a r b i t r a t i o n c l a u s e s a r e n o t
b i n d i n g f o r t h e s t r o n g e r p a r t y, i t w o u l d d e p r i v e t h e w e a k e r p a r t y
option for most B2C disputes because of the distance, the costs
o n l i n e a r b i t r a t i o n as a f o r m o f r e d r e s s c a n o n l y b e s e c u r e d b y
a r b i t r a t i o n . 538 T h e d i ff e r e n t t r e a t m e n t o f t h e p a r t i e s i s j u s t i f i ed
536
KAUFMANN-KOHLER Gabrielle, Online Dispute Resolution and its Significance for
International Commercial Arbitration, op. cit., p. 13.
537
SCHULTZ Thomas, Online Dispute Resolution: an Overview and Selected Issues, op. cit., p. 9.
538
“If the ‘weaker’ party (such as an individual in state A) has no access to the courts, why would
the ‘stronger’ party (such as a multinational company involved in E-commerce established in state
B) agree to arbitration?” HÖRNLE Julia, Cross-border Internet Dispute Resolution, op. cit., p.
223.
313
i m b a l a n c e . T h i s w ay t h e m o r e p o w e r f u l b u s i n e s s e s a r e b o u n d b y
t h e c o n s u m e r i s f r ee t o c h o o s e l i t i g a t i o n i n s t e a d o f a r b i t ra t i o n ,
a l t h o u g h t h i s s c e n ar i o i s l e s s p o s s i b l e i n B 2 C d i s p u t e s w h e r e
b i n d i n g s u b m i s s i o n t o a r b i t r a t i o n i s t h e IC A N N s ys t e m f o r
d i s p u t es o v e r d o m a i n n a m e r e g i s t r a t i o n s u n d e r t h e Un i f o r m
r e s o l u t i o n p r o g r a m m a n a g e d f o r F o r d b y t h e “ C h a r t e r e d In s t i t u t e
o f A r b i t r a t o r s ” i n Lo n d o n , a c c o r d i n g t o w h i c h t h e “ c l a i m a n t
c h o i c e ” . 539
539
KAUFMANN-KOHLER Gabrielle, Online Dispute Resolution and its Significance for
International Commercial Arbitration, op. cit., pp. 4, 5.
314
S e c t i o n 3 : T h e A rb i t r a t i o n p r o c e d u r e
e n t e r e d i n t o a n o n l i n e a r b i t r a t i o n a g r e e m e n t , t h e n ex t s t e p i s f o r
w e b - b a s e d a r b i t r a t i o n ) a n d t h e u s e o f IC T t o o l s ( f o r e x a m p l e
p r o c e s s t a k e s n o r m a l l y b e t w e e n 4 h o u r s a n d 3 0 d a ys . T h e m a i n
c o m m u n i c a t i o n wo u l d n o t a l l o w f o r t h e i m p l e m e n t a t i o n o f t h e
IC T t o o l s s u c h a s e m a i l , c h a t r o o m s , w o r d - p r o c e s s i n g s o f t w a r e
315
allowing parties to hear and see each other as in the real world
p r o c e d u r e o f o n l i n e a r b i t r a t i o n . T h e fi r s t o n e i s t h e p r i n ci p l e o f
p a r t y a u t o n o m y, w h i c h a l l o w s p a r t i e s t o d e t e r m i n e a n d o rg a n i z e
p r i n c i p l e i s t h e eq u a l t r e a t m e n t o f t h e p a r t i e s a c c o r d i n g t o
w h i c h , “ t h e p a r t i es h a v e t h e r i g h t o f e q u a l a c c e s s t o t h e
a c c e s s t o t h e e l e c t ro n i c m e a n s f o r c o n d u c t i n g t h e p r o c e d u r e ” . 540
i s s u e s t h a t a r i s e f r o m t h e t r a n s p o rt a t i o n o f t h e a r b i t r a t i o n
p r o c e s s t o t h e v i r t u a l w o r l d o f c yb e r s p a c e r e l a t e t o t w o b a s i c
p l a c e o r t h e s e a t o f a r b i t r a t i o n . It s d e t e r m i n a t i o n i s i m p o r t a n t
540
YÜKSEL, Armağan Ebru Bozkurt, op. cit., pp. 87, 88.
316
b e c a u s e t h e s e a t af f e c t s o t h e r a s p e c t s o f t h e a r b i t r a t i o n . F o r
a w a r d , t h e d e t e r m i n a t i o n o f w h i c h i s es s e n t i a l w h e n s e e k i n g t h e
a s s i s t a n c e o f n at i o n a l c o u r t s , t h e s u p e r v i s i o n o f a w a r d s b y t h e
t h e p o w e r o f n at i o n a l c o u r t s t o s e t a s i d e t h e a w a r d , a s w e l l a s
q u e s t i o n o f , h o w c an o n e d e t e r m i n e t h e s e a t o f a r b i t r a t i o n w h e n
i n a v i r t u a l w o rl d w h e r e a p h ys i c a l l o c a t i o n c a n n o t b e d ef i n e d ?
In o n l i n e a r b i t r a t i o n t h e p r o c e d u r e d o e s n o t t a k e p l a c e i n a
w o r l d . T h e a b s e n c e o f a p h ys i c a l s e a t m a y l e a d t o w h a t i s k n o w n
a w a r d ” w i t h p o t e n t i a l l y g r a v e c o n s e q u e n c e s f o r i t s e n f o r c em e n t .
s e a t t h e o r y” , w h i c h i s wi d e l y a c c e p t e d i n l e g a l t h e o r y a n d
p r o c e e d i n g s m a y b e c o n c l u d e d i n a co u n t r y d i f f e r e n t t h a n t h e
317
w h i c h i s t h e o n e a g r e e d b y t h e p a r t i e s . 541 F u r t h e r m o r e , t h i s
o p i n i o n i s s u p p o rt e d b y t h e t h e o r y o f d e l o c a l i z a t i o n , a c c o r d i n g
t o w h i c h t h e a r b i t ra t i o n s h o u l d b e d et a c h e d f r o m t h e p l a c e o f
a r b i t r a t i o n . 542
T o d a y, t h e r e i s a g e n e r a l c o n s e n s u s t h a t o n l i n e a r b i t r a t i o n
d e f i n a b l e i n t r a d i t i o n a l t e r m s a s a s p ec i f i c p h ys i c a l l o c a t i o n . In
o n l i n e a r b i t r at i o n t h e s e a t i s n o t d e f i n e d a s t h e p l a c e o f t h e
p l a c e w h e r e t h e a wa r d w a s m a d e . It i s d e t e r m i n e d b a s e d o n l e g a l
p r o v i d e r . If t h e p a r t i e s h a v e n o t c h o s en t h e s e a t o f a r b i t ra t i o n ,
t h e n t h e a r b i t r a l t r i b u n a l o r t h e a r b i t r a t i o n i n s t i t u t i o n d e t e rm i n e s
t h e s e a t o f a r b i t r at i o n . A c c o r d i n g t o t h e “ U N C IT R A L M o d e l
La w ” i f t h e p a r t i e s h a v e n o t c h o s e n t h e p l a c e o f a r b i t r a t i o n , t h e n
t h e c i r c u m s t a n c e s o f t h e c a s e . 543
541
WANG Fangfei Faye, op. cit., p. 89.
542
HERBOCZKOVÁ Jana, op. cit., p. 7.
543
“Place of arbitration. The parties are free to agree on the place of arbitration. Failing such
agreement, the place of arbitration shall be determined by the arbitral tribunal having regard to the
circumstances of the case, including the convenience of the parties. Notwithstanding the
provisions of paragraph (1) of this article, the arbitral tribunal may, unless otherwise agreed by the
parties, meet at any place it considers appropriate for consultation among its members, for hearing
witnesses, experts or the parties, or for inspection of goods, other property or documents”. See
UNCITRAL Model Law on International Commercial Arbitration (1985) Article 20 available at
http://www.uncitral.org/pdf/english/texts/arbitration/ml-arb/06-54671_Ebook.pdf
318
C o n s e q u e n t l y, t h e s e a t o f a r b i t r a t i o n i s c h o s e n a n d i s
i n d e p e n d e n t f r o m an y p h ys i c a l l o c a t i o n m a k i n g t h e a b s e n c e o f a
t r a d i t i o n a l s i t u s i r re l e v a n t . T h i s i s s u p p o r t e d n o t o n l y b y t h e
“ U N C IT R A L M o d e l La w ” , b u t a l s o b y t h e IC C a r b i t r a t i o n
r u l e s 544 a s w e l l a s b y t h e n a t i o n a l l a w s o f s e v e r a l c o u n t r i e s s u ch
a s U K 545 a n d F r a n c e 546. T h e r e f o r e , i t i s a c ce p t e d t h a t t h e p l a c e o r
s e a t o f a r b i t r a t i o n re f e r s t o t h e p l a c e c h o s e n b y t h e p a r t i e s o r t h e
j u r i s d i c t i o n o f a c o u r t t o s e t a s i d e an a w a r d a n d p o s s i b l y t h e
m a t e r i a l l a w o f t h e p r o c e d u r e , w h i c h i s r e l a t e d t o n ex t i s s u e o f
t h e a p p l i c a b l e l a w , s i n c e g e n e r a l l y, i f t h e p a r t i es h av e n o t
c h o s e n t h e a p p l i ca b l e l a w i t w i l l b e t h a t o f t h e s e a t o f
a r b i t r a t i o n . In s h o r t , t h e a r b i t r a l a w a r d a s w e l l a s t h e a r b i t ra t i o n
544
“Place of the Arbitration: The place of the arbitration shall be fixed by the Court, unless agreed
upon by the parties. The arbitral tribunal may, after consultation with the parties, conduct hearings
and meetings at any location it considers appropriate, unless otherwise agreed by the parties. The
arbitral tribunal may deliberate at any location it considers appropriate”. See The International
Chamber of Commerce Rules of Arbitration article 18 available at
http://www.icc.se/skiljedom/rules_arb_english.pdf
545
“The seat of the arbitration: In this Part ‘the seat of the arbitration’ means the juridical seat of
the arbitration designated by the parties to the arbitration agreement, or by any arbitral or other
institution or person vested by the parties with powers in that regard, or by the arbitral tribunal if
so authorized by the parties, or determined, in the absence of any such designation, having regard
to the parties’ agreement and all the relevant circumstances”. See UK Arbitration Act Section 3
available at http://www.legislation.gov.uk/ukpga/1996/23/section/3
546
“According to the French Cour de cassation the seat of arbitration is not a physical concept but
a purely legal concept. According to the French Cour d’appel de Paris, ‘no particular form is
imposed for the deliberations of the arbitral tribunal; in international it is difficult to hold multiple
meetings of a group of people who live in different countries’. Consequently, no legal difficulty
should arise if the arbitrators conduct proceedings over the Internet, provide that when they write
the arbitration award they take the precaution of indicating the seat of arbitration”. See MANEVY
Isabelle, op. cit., pp. 40- 41.
319
arbitration and once the seat of arbitration is chosen by the
i t s e l f , a s t h e p a r t i e s d e t e r m i n e d , a n d s i g n t h e a w a r d ” . 547
a r b i t r a t i o n p r o c e d u r e r e l a t e s t o t h e q u e s t i o n o f w h i c h l aw w i l l
p r i v a t e i n t e r n a t i o n al l a w a n d c h o o s e b o t h t h e p r o c e d u r a l an d t h e
j u r i s d i c t i o n a n d c h o i c e o f l a w i s s u e s a n d a c h i e v e l e g a l c e r t a i n t y.
The parties may agree on the substantive law and choose either
320
l e x m e r c a t o r i a o r l e x i n f o r m at i c a . 548 T h e p a r t i e s m a y “ g i v e t h e
a r b i t r a t o r t h e p o w e r s o f a n ‘ a m i a b l e co m p o s i t e u r ’ , t o a p p l y a n
i n t e r n a t i o n a l l ex m er c a t o r i a ” . 549
“ Le x m e r c a t o r i a ” i s t h e l a w o f m e r c h a n t s . T h e n o t i o n i s
connected to ADR and was formed during the middle ages, when
p a r a l l e l l a w s , a l s o m o t i v at e d t h e c r e a t i o n o f a d i s t i n c t b o d y o f
t r a n s n a t i o n al l a w s , k n o w n a s “ l e x m e r c a t o r i a ” , o r i g i n a t e d f r o m
f u n d a m e n t a l p r i n ci p l e s o f c o m m e r c e , a l l o w i n g l e g a l c e r t a i n t y,
e a s e o f a p p l i c a t i o n a n d a m i n i m u m s t a n d a r d o f f a i r n e s s . In t h e
o n l i n e w o rl d t h e e q u i v a l e n t o f “ l ex m e r c a t o r i a ” , i s r e f e r r e d t o a s
“ l e x i n f o r m a t i c a ” a n d i s d e f i n e d a s “ t h e b o d y o f t r a n s n a t i o n al
r u l e s o f l a w a n d t r a d e u s a g e s a p p l i c a b l e t o c r o s s - b o rd e r e -
d i s p u t es o n t h e b a s i s o f t h e i n t e n t i o n o f t h e p a r t i e s a n d t a k i n g
i n t o a c c o u n t t h e ra p i d e v o l u t i o n i n t h e s t a t e o f t h e a r t o f e -
b u s i n e s s ” . 550 T h e s e t ra n s n a t i o n a l ru l e s a re b a s e d o n f u n d a m en t al
548
HERBOCZKOVÁ Jana, op. cit., p. 3.
549
WANG Fangfei Faye, op. cit., p. 50.
550
PATRIKIOS Antonis, Resolution of Cross-border E-business Disputes by Arbitration Tribunals
on the Basis of Transnational Substantive Rules of Law and E-business Usages: The Emergence of
the Lex Informatica, 21st BILETA Conference, 2006, pp. 15, 16.
321
principles, internationally accepted laws, online customs and
u s a g e s , s t a n d a r d “ t e r m s a n d c o n d i t i o n s ” , c o n t r a c t s o r c l au s e s a s
c h o i c e s . 551
a p p l i c a t i o n o f t r a n s n a t i o n a l r u l e s s e em s m o r e r e a s o n a b l e t h a n
p o t e n t i al o f l ex i n fo r m a t i c a i s i n c r e a s e d b y t h e f a c t t h a t i t i s i n
great extent shaped by the same people it governs, who are more
w i l l i n g t o a c c e p t i t . 552 Le x i n f o r m a t i c a h a s e m e r g e d , i s w i d e l y
a p p l i c a t i o n o f t r a n s n a t i o n a l l e g a l s t an d a r d s n o t o n l y t o t h e
t h e r e f o r e a l s o l ex i n f o r m a t i c a , i s i n ac c o r d a n c e w i t h t h e “ N e w
a w a r d s , b a s e d o n t r a n s n a t i o n a l r u l e s , i s a c c e p t e d b y l e g a l t h e o r y,
“ In t e r n a t i o n a l La w A s s o c i a t i o n ” , a c c o r d i n g t o w h i c h , “a w a r d s
551
REIDENBERG Joel, Lex Informatica: The Formulation of Information Policy Rules through
Technology, Texas Law Review, vol. 76, 1998, p. 555.
552
MEFFORD Aron, Lex Informatica: Foundations of Law on the Internet, Indiana Journal of
Global Studies, vol. 5, 1997, p. 236.
553
PATRIKIOS Antonis, op. cit., pp. 37- 39.
322
based on transnational rules are enforceable if they have been
a p p l i e d b y t h e a r b i t r a t o r s p u r s u a n t t o ag r e e m e n t o f t h e p a r t i e s o r
l a w ” . 554
In c a s e t h e p a r t i e s h a v e n o t c h o s e n t h e a p p l i c a b l e l a w , t h e
a r b i t r a t o r m a y d e t e r m i n e t h e p r o c e d u r a l a n d s u b s t a n t i v e l aw a n d
m a y a p p l y t h e r u l e s o f l a w , w h i c h c o n s i d e r s a p p r o p r i a t e. T h i s
In t e r n a t i o n a l C o m m e r c i a l A r b i t r a t i o n ” a c c o r d i n g t o w h i c h , i n
c a s e t h e p a r t i e s h a v e n o t c h o s e n a l a w , t h e a p p l i c a b l e l aw s h a l l
b e d e t e r m i n e d b y t h e a r b i t r a l t r i b u n a l . 555 F u r t h e r m o r e , t h i s
In t e r n a t i o n a l C o m m e r c i a l A r b i t r at i o n ” w h i c h c a l l s f o r t h e l a w
554
HERBOCZKOVÁ Jana, op. cit., p. 10.
555
“Failing such agreement, the arbitral tribunal may, subject to the provisions of this Law,
conduct the arbitration in such manner as it considers appropriate”. “Failing any designation by the
parties, the arbitral tribunal shall apply the law determined by the conflict of laws rules which it
considers applicable”. See UNCITRAL Model Law on International Commercial Arbitration,
Articles19 and 28 available at http://www.uncitral.org/pdf/english/texts/arbitration/ml-arb/06-
54671_Ebook.pdf
556
“Failing any indication by the parties as to the applicable law, the arbitrators shall apply the
proper law under the rule of conflict that the arbitrators deem applicable”. See European
Convention on International Commercial Arbitration, Article VII available at
https://treaties.un.org/doc/Treaties/1964/01/19640107%2002-01%20AM/Ch_XXII_02p.pdf
323
Chapter 3
In t r a d i t i o n a l A D R , o n e o f t h e m o s t i m p o r t a n t e l e m e n t s
w h i c h i s k n o w n a s t h e a w a r d o f t h e a r b i t r a t i o n a n d i s e f fe c t i v e
d e c i s i o n i s s u e d b y a n a t i o n a l c o u r t . Ho w e v e r , a s s t a t e d , o n l i n e
o f t h e p r o c e d u r e , o n l i n e a r b i t r a t i o n c an b e b i n d i n g , n o n - b i n d i n g
o r u n i l at e r a l l y b i n d i n g . B i n d i n g o n l i n e a r b i t r a t i o n i s c l a s s i f i e d
a s “ t r u e a r b i t r a t i o n ” s i n c e i t h a s t h e f u n d a m e n t a l e l e m en t s o f
“ t r u e a r b i t r a t i o n ” i f t h e a w a r d i s g i v e n “ a b i n d i n g e f f e c t a ft e r i t s
p r o c e d u r a l s t a n d a r d s a p p l i c a b l e t o a r b i t r a t i o n h a v e b e e n m e t ”. 557
A n e x a m p l e o f u n i l a t e r a l l y b i n d i n g a r b i t r a t i o n i s “ F o r d J o u r n e y” ,
b y t h e “ C h a r t e r e d In s t i t u t e o f A r b i t r a t o r s i n Lo n d o n ” , i n w h i c h
557
BADIEI Farzaneh, op. cit., p. 5.
324
“the parties are bound by the Arbitrator’s decision subject to
e i t h e r p a r t y’ s r i g h t o f a p p e a l u n d e r t h e A r b i t r a t i o n A ct , 1 9 9 6 ,
a n d a l s o t h e c l ai m an t ’ s r i g h t t o r e j e c t t h e a w a r d b y p u r s u i n g t h e
c l a i m a f r e s h i n t h e c o u r t s ” . 558
In t h e c a s e o f n o n - b i n d i n g a r b i t r a t i o n t h e IC A N N s ys t e m
D i s p u t e R e s o l u t i o n P o l i c y” ( U D R P ) , o f f e r e d b y s e v e r a l O D R
p r o v i d e r s , i s t h e p r i m e ex a m p l e . U n d e r t h e “ U n i f o r m Di s p u t e
R e s o l u t i o n P o l i c y” , n o n e o f t h e p a r t i e s a r e b o u n d b y t h e o u t c o m e
d o m a i n n am e s s e e m s t o b e a p r e f e r r e d m e t h o d w h e n u s i n g o n l i n e
e n f o r c e a b i l i t y o f t h e a w a r d . 559 H o w e v e r , b i n d i n g a r b i t r a t i o n i s
S u p p l em e n t a r y R u l e s f o r O n l i n e A r b i t r at i o n s ” . 560
558
KAUFMANN-KOHLER Gabrielle, op. cit., pp. 4, 5.
559
CORTES Pablo, op. cit., pp. 106, 107.
560
KAUFMANN-KOHLER Gabrielle, op. cit., pp. 4, 5.
325
S e c t i o n 1 : No n - b i n d i n g o n l i n e a r b i t r a t i o n
b i n d i n g a n d n o n - b i n d i n g . A t t h i s p o i n t t h i s t h e s i s e x a m i n es n o n -
a n o x ym o r o n , s i n c e o n e o f t h e m a i n c h a r a c t e r i s t i c s o f a r b i t r a t i o n
c a n n o t b e e n f o r c e d . 561 T h e m o s t r e p r e s e n t a t i v e e x am p l e o f n o n -
P r o c e d u r e ” ( U D R P ) , w h i c h h a s p r o v en v e r y s u c c e s s f u l i n t h e
e f f i c i e n t a n d c o s t - e f f e c t i v e . T h i s ex am p l e o f s u c c e s s f u l n o n -
b i n d i n g a r b i t r a t i o n w i l l b e ex a m i n e d i n t h e n ex t s e c t i o n .
a r b i t r a t i o n i s t h a t t h i s f o r m o f a r b i t ra t i o n a v o i d s m a n y o f t h e
l e g a l o b s t a c l e s t h at b i n d i n g o n l i n e a r b i t r a t i o n f a c e s , r e l a t i n g t o
constrained under some national laws and the form of the award.
561
SCHMITZ J. Amy, op. cit., p. 194.
326
Nevertheless, non-binding arbitration avoids problems regarding
o f e n f o r c e m e n t o f i t s d e c i s i o n s b y s t a t e a u t h o r i t i e s ” . 562 A n o t h er
t h e i d e a t h at O D R a i m s n o t o n l y t o r e s o l v e d i s p u t e s b u t a l s o t o
f a c i l i t a t e o n l i n e c o m m e r c e . A c c o r d i n g t o t h i s m e n t al i t y O D R
s ys t e m s m u s t p r i m ar i l y b e t i m e a n d c o s t e f f i c i e n t , s o t h at f a i l e d
possible.
O D R m e t h o d s , i n t h e s e n s e t h a t t h e i n v o l v e m e n t o f t h e t h i rd
a n d t h e o t h e r p a r t y’ s v i e w s a n d a r g u m e n t s a n d f o r m a n i d e a
“ h e l p i n g a l l e v i a t e a n g u i s h a n d a g g r e s s i o n t h r o u g h e x p re s s i o n
a n d r e v e l a t i o n ” . 563
562
SCHULTZ Thomas, 'Online Arbitration: Binding or Non-Binding? op. cit., p. 7.
563
BENNETT C. Steven, Non-binding Arbitration: An Introduction, Dispute Resolution Journal,
vol. 61, no. 2, 2006, p. 2.
327
acceptance of the outcome or through what was described in the
t e c h n o l o g i c a l s ys t e m s a r e u s e d a s s e l f - e n f o r c e m e n t m e c h a n i s m s
a n d “ a m a r k e t p l a ce w i t h n o n - b i n d i n g a r b i t r a t i o n e n f o r ce s t h e
decisions, not through courts but simply in the legal order of the
m a r k e t p l a c e . 564
e n f o r c e m e n t o f t h e a w a r d a l o n e w o u l d r e q u i r e m o r e m o n e y,
t e c h n o l o g i c a l t o o l s w o u l d e n s u r e c o m p l i a n c e t o a v e ry h i g h
s u c h a s t h e ex c l u s i o n f r o m t h e m a r k e t p l a c e w o u l d b e c o n s i d e r e d
p r o b l e m r e m a i n s an d a n O D R s ys t e m t h a t w o u l d r e l y o n n o n -
564
SCHULTZ Thomas, 'Online Arbitration: Binding or Non-Binding? op. cit., p. 8.
328
binding arbitration alone would not be able to produce the
S e c t i o n 2 : T h e U DR P e x a mp l e
T h i s s e c t i o n d e m o n s t r a t e s a s u c c e s s fu l e x am p l e o f n o n -
circumstances.
D u r i n g t h e l a s t d e c a d e o f t h e m i l l e n n i u m t h e In t e r n e t
b e c a m e c o m m e r c i a l a n d e x p e r i e n c e d an i m p r e s s i v e g r o w t h . T h i s
p r o d u c e d a v a s t a m o u n t o f n e w d i s p u t e s , s u c h a s d i s p u t es o v e r
d o m a i n n a m e s . In i t i a l l y m o s t p e o p l e h ad n e v e r e v e n h e a r d a b o u t
c o r r e s p o n d i n g d i s p u t e s . In t h e o f f l i n e w o r l d b u s i n e s s e s c a n
operate under the same name, provided that their operation does
n o t c r o s s p a t h s . F o r i n s t a n c e , w h e n t h e b u s i n e s s e s o p er a t e i n
d i f f e r e n t s e c t o r s . Ho w e v e r , t h i s i s n o t t r u e f o r t h e o n l i n e w o r l d ,
329
where businesses operate in the same area, in a common-to-all
c yb e r w o r l d a n d t h e o n l y w a y t o f i n d t h e m i s t h r o u g h t h e i r
d o m a i n n a m e s , w h i c h t h e r e f o r e c a n n o t b e s h a r e d . C o n s e q u e n t l y,
d o m a i n n a m e s b e c am e i n v a l u a b l e f o r b u s i n e s s e s a n d s o o n e n o u g h
d i s p u t es w e r e u s u a l l y c r o s s - b o r d e r , r a i s e d c o m p l ex l e g a l i s s u e s
a n d r e q u i r e d a v a s t a m o u n t o f t i m e a n d m o n e y. A s a r e s u l t ,
d e v e l o p i n g a l t e r n a t i v e w a ys t o r e s o l v e d o m a i n n a m e d i s p u t e s
C o r p o r a t i o n f o r As s i g n e d N a m e s a n d N u m b e r s ” a d o p t e d t h e
“ U n i f o r m D o m a i n N a m e D i s p u t e R e s o l u t i o n P o l i c y” , w h i c h i s
o p e r a t i o n a l s i n c e t h e ye a r 2 0 0 0 .
A c c o r d i n g t o t h e U D R P s ys t e m , i n o r d e r t o r e s o l v e a
a c c r e d i t e d b y t h e IC A N N a n d f i l e a c o m p l a i n t . T h e t yp e s o f
T r a n s f e r S o l i c i t at i o n , a c c r e d i t a t i o n , a n U n a u t h o r i z e d T r a n s f e r o f
Y o u r D o m a i n N a m e , a T r a d e m a r k In f r i n g e m e n t , a U n i f o r m
D o m a i n N a m e Di s p u t e R e s o l u t i o n ( U DR P ) D e c i s i o n , a R eg i s t r a r
565
WANG Fangfei Faye, op. cit., pp. 72, 73.
330
S e r v i c e , In a c c u r a t e W h o i s D a t a , S p am o r V i r u s e s C o n t en t o n a
W e b s i t e ” . 566 T h e U DR P p r o c e d u r e f o r r e s o l v i n g d o m ai n n a m e
d i s p u t es i n cl u d e s t w e l v e s t e p s , f r o m t h e f i l i n g o f t h e c o m p l a i n t
t o t h e p o t e n t i al t r an s f e r o f t h e d o m a i n n a m e , a n d i s c o n c l u d e d
w i t h i n s i x t y d a ys . 567
T e n d a ys a f t e r t h e d e c i s i o n i s r e n d e re d a n d t h e d i s p u t e
566
DUCA D. Louis, RULE Colin, LOEBL Zbynek, op. cit., p. 4.
567
“At the first step the complainant files both paper and electronic copies of the complaint with
the dispute resolution forum and the respondent; the paper copies can be delivered via posted mail
or other courier service; the electronic copies can be transmitted via electronic mail or facsimile.
Parties are not required to appear at the provider’s forum physical location. No inter-person
interaction is required or permitted except in unique circumstances. At the second step the
arbitrator acknowledges receipt via email and hard copy responses. At the third step the dispute
resolution forum contacts the Internet domain name registrar(s) to provide details regarding the
domain name in dispute. At the forth step, after receiving the requested information from the
Internet domain name registrar(s), the provider conducts a complete review of the complaint. If the
complaint is found to be deficient, both the complainant and respondent are notified. The
complainant has then five days to resubmit the complaint. If the complaint is not corrected and
resubmitted within the permitted time frame, the complaint is deemed withdrawn without
prejudice. At the fifth step, after the compliance is completed, the complainant is required to
submit payment for the forum’s fees by check, bank transfer or credit card. Formal proceedings
start upon payment. At the sixth step the respondent is required to submit a response to the
complaint within twenty calendar days of the commencement of the proceedings; if the respondent
fails to submit a response within the allocated time period, he or she is considered in default, and
the process continues. At the seventh step the forum then acknowledges receipt of the response or
sends notice of default by respondent to both complainant and respondent. The eighth step is the
panel constitution. If neither the complainant nor the respondent, have elected a three-member
panel, the provider shall appoint a single panelist from its list of experts. The panelist’s fees are to
be paid by complainant. If either the complainant or the respondent elect a three-member panel,
the provider will appoint a three-member panel-endeavoring to appoint one from a list of three
names selected by complainant, one from a list of three names selected by respondent and the
presiding panelist from a list of five names after submission to the parties and reasonably
balancing the preferences of both parties. The fees of the panelists are paid by the complainant if it
alone or with the respondent, elect three panelists and by all parties equally if the respondent alone
has elected three. At the ninth step the panel submits its decision to the forum within fourteen days
of its appointment. At the tenth step, within three days after receipt of the decision, the forum
notifies the parties, ICANN, and the respective Internet domain name registrar(s). At the eleventh
step, if the respondent prevails, no further action is taken and the process ends; if the complainant
prevails, the registrar(s) is required to transfer the domain name with ten days from the respondent
to the complainant. At the twelfth step the registrar (s) implements the final decision”. MANEVY
Isabelle, op. cit., p. 20.
331
transfers the domain name. Between the registrar and ICANN
w h i c h t h e r e g i s t r a rs h a v e t o e n f o r c e t h e d e c i s i o n s r e n d e r e d b y
e n f o r c e m e n t , o r m o r e a c c u r a t e l y, t h e s e l f - e n f o r c e m e n t i s b a s e d
o n t h e t e c h n i c a l co n t r o l o v e r t h e d o m a i n n a m e r e g i s t r y . “ T h e
U D R P i s e m p o w e r ed b y t e r m s i n t h e c o n t r a c t a g r e e d t o w h e n a
m a k i n g n e c e s s a r y c h a n g e s i n t h e d o m a i n n a m e r e g i s t r y” . 569
e n f o r c i n g a b i l i t y. H o w e v e r , t h e U D R P i s a p a r t i c u l a r ca s e i n
w h i c h t h e IC A N N c a n e x e r c i s e u n i q u e t e c h n i c a l c o n t r o l o v e r t h e
d i s p u t es , s u c h a s B 2 C d i s p u t e s , s u c h ef f e c t i v e s e l f - e n f o r c e m e n t
m e c h a n i s m s m i g h t n o t ex i s t , w h i c h m i g h t m a k e t h e e n f o rc e m e n t
o f o u t c o m e s , p r o d u c e d b y n o n - b i n d i n g a r b i t r a t i o n , p r o b l em a t i c .
T h e U D R P p r o c e d u r e c o n s t i t u t e s a n e f f i c i e n t O D R s ys t e m w i t h
m e t h o d u s e d b y t h e U D R P i s n o n -b i n d i n g a r b i t r a t i o n ( f o r
568
Internet Corporation for Assigned Names and Numbers, available at
https://www.icann.org/resources/pages/udrp-2012-02-25-en?routing_type=path
569
KATCH Ethan, Online Dispute Resolution: Some Implications for the Emergence of Law in
Cyberspace, op. cit., p. 6.
332
instead of arbitrators), which does not impede the parties from
g o i n g t o c o u r t . 570 A l t h o u g h , “ i t i s u n l i k el y t h a t t h e l o s i n g p a r t y
e s p e c i a l l y i f t h e d i s p u t e i s o f l o w e c o n o m i c v a l u e ” , 571 t e c h n i c a l l y
finality since parties can still recourse to court and render the
A r b i t r a t i o n i s t h e o n l y m e t h o d t h a t ca n p r o d u c e a b i n d i n g a n d
f i n a l a w a r d ; t h e aw a r d i s d i r e c t l y e n f o r c e a b l e , m u c h l i k e t h e
570
CORTES Pablo, op. cit., pp. 68, 69.
571
SCHULTZ Thomas, 'Online Arbitration: Binding or Non-Binding? op. cit., p. 10.
333
judgment of a national court and even easier in cross-border
d i s p u t es , s i n c e t h e N e w Y o r k C o n v e n t i o n e n s u r e s t h a t a r b i t r a t i o n
a w a r d s a r e e n f o r c e a b l e a c r o s s m o s t b o r d e r s , a n d t h e a wa r d i s
a n d e n f o r c e a b l e a v e n u e f o r r e d r e s s ” . 572
n e g o t i a t i o n a n d m ed i a t i o n , d o n o t p r o d u c e d e c i s i o n s t h at c a n b e
e n f o r c e d , b u t i n s t ea d , t h e y e i t h e r p r o d u c e o u t c o m e s t h a n a r e
p r o d u c e n o o u t c o m e s w h e n t h e p r o c e s s i s u n s u c c e s s f u l . 573 Bu t
s t a r t e n f o r c e m e n t o f j u d g m e n t p r o c e e d i n g s . It i s o b v i o u s t h a t i t
a n a r b i t r a t i o n a w ar d c a n b e g r a n t e d i n s u m m a r y p r o c e e d i n g s
572
HÖRNLE Julia, op. cit., p. 59.
573
KAUFMANN-KOHLER Gabrielle, op. cit., pp. 4, 5.
334
w i t h o u t a r e v i e w o f t h e m e r i t s o f t h e a w a r d . 574 T h e r e f o r e , t h e
e n f o r c e m e n t o f a n a w a r d i s m u c h ea s i e r a n d “ e s p e c i a l l y f o r
s m a l l a n d m e d i u m e n t e r p r i s e s , p a r t i cu l a r l y w h e n t h e y a r e f a r
m a y p r e s e n t m a j o r a d v a n t a g e s ” . 575 F u r t h e r m o r e , a s s e e n e a r l i e r,
of which can become enforceable but in the end the parties can
a l w a ys r e c o u r s e t o t h e c o u r t .
In o n l i n e b i n d i n g a r b i t r a t i o n t h e a r b i t r a l p r o c e e d i n g s a r e
a r b i t r a l a w a r d . T h i s i s w h a t s e p a r a t es a r b i t r a t i o n f r o m o t h e r
r e l yi n g o n t h e v o l u n t a r y c o m p l i a n c e o f t h e l o s i n g p a r t y, i n
c a n b e e a s i e r t h a n e n f o r c i n g f o r e i g n c o u r t d e c i s i o n s . C o n t ra r y t o
f r o m v i r t u al c h a r a c t e r o f t h e p r o c e s s r e l a t i n g t o t h e a w a r d .
574
WANG Fangfei Faye, op. cit., p. 87.
575
KAUFMANN-KOHLER Gabrielle, op. cit., pp. 19, 20.
335
Although in online arbitration parties often voluntarily
comply with the award since they usually want to preserve the
g o o d s t a t u s o f t h e i r r e l a t i o n s h i p w i t h t h e o t h e r p a r t y, h o w e v e r ,
t h e t h e s i s ex a m i n e s t h e e n f o r c e a b i l i t y o f t h e a w a r d i n a b s e n c e o f
s u c h a v o l u n t a r y c o m p l i a n c e . In t r a d i t i o n a l a r b i t r a t i o n , t h e
C o n v e n t i o n ” i n t e r n a t i o n a l l y. T h e m a i n c o n c e r n s r e l a t e t o t h e
courts.
T h e f i r s t i s s u e c o n c e r n s t h e f o r m o f t h e o n l i n e a r b i t r al
U N C IT R A L “Model La w on In t e r n a t i o n a l Commercial
A r b i t r a t i o n ” 576 a n d s e v e r a l n a t i o n a l l a w s , 577 i t i s r e q u i r e d fo r
576
“Form and contents of award: the award shall be made in writing and shall be signed by the
arbitrator or arbitrators. In arbitrator proceedings with more than one arbitrator, the signatures of
the majority of all members of the arbitral tribunal shall suffice, provided that the reason for any
omitted signature is stated”. See UNCITRAL Model Law on International Commercial Arbitration
(1985) Article 31 available at http://www.uncitral.org/pdf/english/texts/arbitration/ml-arb/06-
54671_Ebook.pdf
577
According to the Section 52 (1) UK Arbitration Act of 1996, “the parties are free to agree on
the form of the award”. But, if there is no such agreement, the award shall be in writing signed by
all the arbitrators or all those assenting to the award. Regarding US law, federal law refers
explicitly to the New York Convention (Chapter 2 §202 of the Federal Arbitration Act of 1925).
Regarding US state law, Section 8 of the Uniform Arbitration Act of 1955 (UAA) requires that the
“award shall be in writing and signed by arbitrators joining in the award”. See MOREK Rafal, op.
cit., p.43.
336
t h e p a r t i e s , a r e q u i r e m e n t w h i c h m a y c a u s e d i f f i c u l t i es i n c a s e
o f a n o n l i n e a w a r d i n a n e l e c t r o n i c f o rm a n d s i g n e d w i t h “ d i g i t a l
p r o b l e m s w o u l d b e t o a d d i t i o n al l y c r e a t e a h a r d c o p y o f t h e
a r b i t r a t o r s a n d t h er e f o r e s a t i s f y t h e f o r m r e q u i r e m e n t s o f t h e
c o m m u n i t y, “ b y e x t e n s i v e i n t e r p r e t a t i o n o f t h e C o n v e n t i o n u n d e r
t h e p r i n c i p l e o f fu n c t i o n a l e q u i v a l en c y, a d m i t s t h a t d i g i t a l
o n l i n e a r b i t r a l a w a r d s m e e t t h e w r i t t e n f o r m a n d o ri g i n a l
r e c o g n i z e s t h e v a l i d i t y o f d i g i t a l s i g n a t u r e s ” . 578 H o w e v e r , t h e
a m e n d m e n t o f t h e “ N e w Y o r k C o n v e n t i o n ” a s t o ex p l i c i t l y
T h e s e c o n d i s s u e co n c e r n s t h e n a t i o n a l i t y o f t h e a w a r d .
n a t i o n a l c o u rt a n d p u r s u e t h e e n f o r c e m e n t o f t h e a r b i t r a l a w a r d
a n d t h e c o u r t wi l l e x a m i n e t h e a w a rd . In t h i s p o i n t t h e f i r s t
q u e s t i o n c o n s i d e r ed w i l l b e t h a t o f t h e n a t i o n a l i t y o f t h e
a w a r d . 579 S i n c e t h e In t e r n e t d o e s n o t h av e a n y b o u n d a r i e s , a n d
t h e a r b i t r a t i o n p r o ce d u r e c a n b e p e r f o r m e d e n t i r e l y o n l i n e , w h a t
337
a w a r d m a d e ? H o w ev e r , a s s e e n o n t h e r e l e v a n t p r e v i o u s s e c t i o n
a b o u t t h e s e a t o f ar b i t r a t i o n , i n o n l i n e a r b i t r a t i o n , t h e s e a t o f
p l a c e c h o s e n i s d e fi n e d b y t h e a w a r d a s t h e p l a c e o f a r b i t r a t i o n
d e t e r m i n i n g i t s n a t i o n a l i t y.
c e r t i f i e d c o p y” . A c c o r d i n g t o t h e “ N e w Y o r k C o n v e n t i o n ” f o r
c o p y” ; 580 t h e i s s u e t h a t r i s e s a g a i n i s w h e t h e r t h e o n l i n e a w a rd
s o l u t i o n h a v e b e e n e m p l o ye d t o r e s o l v e t h o s e i s s u e s . A g a i n ,
s i g n a t u r e s b y a t r u s t e d t h i r d p a r t y, o r p r o d u c i n g b e s i d e s t h e
online award also a hard copy of the award i.e. a printed version
w h i c h w i l l b e s e n t t o a r b i t r a t o r s t o s i g n b y h a n d . In t h e l a t t e r
580
“To obtain the recognition and enforcement mentioned in the preceding article, the party
applying for recognition and enforcement shall, at the time of the application, supply: (a) The duly
authenticated original award or a duly certified copy thereof; (b) The original agreement referred
to in article II or a duly certified copy thereof”. See The New York Convention of June 10 1958
Article IV available at http://www.newyorkconvention.org/texts
338
c a s e t h e p r o c e d u r e w i l l p r o d u c e a t r a d i t i o n al a w a r d t h a t w i l l b e
regularly enforceable.
In c o n c l u s i o n , b i n d i n g o n l i n e a r b i t r a t i o n c a n p r o d u c e a
final and binding award which will have the same effect of
f o r t h e s a m e l i m i t ed p r o c e d u r a l g r o u n d s a s t r a d i t i o n al a r b i t r a l
a w a r d s ” . 581 H o w e v e r , i n o r d e r f o r o n l i n e a r b i t r a t i o n t o d ev e l o p
C o n v e n t i o n ” i s n e ce s s a r y s o t h a t i t i s u p t o d a t e wi t h t h e o n l i n e
n a t u r e o f a w a r d s a n d f a c i l i t a t e s t h e i r en f o r c e m e n t . 582
581
YÜKSEL, Armağan Ebru Bozkurt, op. cit., pp. 92, 93.
582
CORTES Pablo, op. cit., pp. 68, 69.
339
Title 2
T h e s e c o n d h a l f o f t h e s e c o n d p a r t en v i s i o n s O DR a s a
f u l l y d e v e l o p e d s ys t e m a n d i l l u s t r a t e s a l l t h e k e y f a c t o r s f o r i t s
s t r u c t u r e a n d t h e e l e m e n t s o f i t s a r c h i t e c t u r e . It e n v i s i o n s a n
i n t e r n a t i o n a l O DR n e t w o r k t h at w i l l b e c o m p r i s e d o f p r i v a t e
g l o b a l o r g a n i z a t i o n s u c h a s U N C IT R A L o r t h e IC C . T h e n e t w o r k
w i l l b e c o m p ri s e d b y c l e a r i n g h o u s e s t h a t w i l l c o o p e r a t e wi t h t h e
r e l e v a n t g o v e r n m e n t a u t h o r i t y i n e a c h c o u n t r y. T h e i n t e r n a t i o n a l
i d e n t i f yi n g t h e c o r e p r i n c i p l e s t h a t m u s t b e s a f e g u a r d e d t o
e n s u r e t h a t t h e O DR s ys t e m w i l l b e b o t h f a i r a n d e f f e c t i v e . T h e
i n t e r n a t i o n a l b o d y w i l l r e g u l a t e t h e OD R m a r k e t a n d s t r en g t h e n
O D R u s e , cl a r i f y c o r e p r i n c i p l e s o f OD R , s e r v i c e s t a n d a rd s a n d
r e c o m m e n d a m o d el f o r c o d e s o f c o n d u c t o r p r a c t i c e f o r O D R
s e r v i c e p r o v i d e r s . 583 T h e i n t e r n a t i o n a l o r g a n i z a t i o n w i l l a l s o
a c c r e d i t O D R p r o v i d e r s t h r o u g h t h e c l e a r i n g h o u s e s an d b y
583
WANG Fangfei Faye, op. cit., p. 80
340
admitted to the ODR n e t w o r k . 584 T h i s part identifies the
f u n d a m e n t a l p r i n c i p l e s t h a t m u s t b e s a f e g u a r d e d . F i n a l l y, i t
t a k e s a c l o s e r l o o k a t t h e O D R p ro v i d e r , i t s t e c h n o l o g i c a l
a n d o n t h e ex p e r i en c e o f t h e d i s p u t e r e s o l u t i o n m o v e m e n t . In
l a yo u t o f a n O D R s ys t e m f r o m i t s f u n d i n g a n d i t s t e c h n o l o g i c a l
creating awareness and trust necessary for ODR to fulfil its full
p o t e n t i al . M o r e s p ec i f i c a l l y, t h e f i r s t c h a p t e r d e m o n s t r a t e s O D R
p r i n c i p l e s t h a t m u s t b e s a f e g u a r d e d . T h e t h i r d c h a p t e r e x am i n e s
O D R f r o m a m i c ro e c o n o m i c v i e w a t t h e l e v e l o f t h e O D R
provider.
584
RULE Colin, op. cit., pp. 281, 282
341
Chapter 1
s e t u p , a s a s ys t e m t h a t i s i n t e r n a t i o n a l a n d g l o b a l w i t h
i n t e r n a t i o n a l b o d y, w h i c h w i l l h a v e c l e a r i n g h o u s e s c o o p e r a t i n g
w i t h t h e r e l e v a n t au t h o r i t i e s i n e a c h s t a t e , a n d t h r o u g h w h i c h
O D R p r o v i d e r s w i l l b e a c c r e d i t e d a n d p a r t i e s w i l l b e r e f er r e d t o
S e c t i o n 1 : An I n t e r n a t i o n a l O D R s y s t em
ye a r s . W h e r e a s i n o l d e r d a ys d i s p u t e s m i g h t h a v e o n l y i n v o l v e d
o f a v i l l a g e , a c i t y, o r a c o u n t r y; a s t i m e p a s s e d a n d p e o p l e
faster and easier, disputes became much more often than before
342
put in resolving the dispute. But since the digital era, the
i n t e r n e t a l l o w s p eo p l e a r o u n d t h e w o r l d t o i n s t a n t a n e o u s l y
i n t e r a c t w i t h e a c h o t h e r , m a k i n g p h ys i c a l f r o n t i e r s m e a n i n g l e s s
In t e r n e t a n d t h e g l o b a l i z at i o n o f t h e w o r l d e c o n o m y d e m a n d t h a t
e l e c t r o n i c c o m m e r c e s h o u l d b e a d d r e s s e d o n a n i n t e r n a t i o n al
l e v e l . 585
A c c o r d i n g t o n a t i o n a l s o v e r e i g n t y, e a c h s t a t e h a s t h e
a c t i v i t i e s o f t h e In t e r n e t . In s h o r t , a c o u n t r y m a y g a i n c o n t r o l
l e v e r a g e a g a i n s t t h e w h o l e s ys t e m o r c a n p r o h i b i t i n f o rm a t i o n
f l o w o n t h e i n t e r n e t . T h e r e f o r e , i n d i v i d u a l In t e r n e t r e g u l a t i o n
c o n t r a d i c t o r y a p p r o a c h e s . C o n s e q u e n t l y, i t i s e v i d e n t t h a t n o t
o n l y i s i n t e r n a t i o n al c o o p e r a t i o n u s e f u l , b u t i t i s r e q u i s i t e . O n l y
585
”President Clinton issued a report entitled ‘A Framework for Global Electronic Commerce’,
more commonly called the ‘Magaziner Report’, according to which governments should recognize
the unique qualities of the Internet and electronic commerce over the Internet should be facilitated
on a global basis”. See ZHAO Yun, Dispute Resolution in Electronic Commerce, (Martinus
Nijhoff Publishers: Leiden/ Boston), 2005, p. 50.
343
through international cooperation can the heavy demands of the
d i g i t a l s o c i et y b e s a t i s f i e d . 586
t h e i r r e s o l u t i o n an i n t e r n a t i o n a l a n d g l o b a l p r o b l e m w h i c h
r e q u i r e s a n i n t e r n at i o n a l s o l u t i o n . As t h e i n t e r n e t i s g l o b a l ,
In t e r n a t i o n a l c o o p e r a t i o n m u s t b e a c h i e v e d o n t w o l e v e l s . It
b e t w e e n g o v e r n m e n t s a n d o n a s u p r a n a t i o n a l l e v el t h r o u g h
i n t e r n a t i o n a l o r g a n i z a t i o n s . In t e r n a t i o n a l c o o p e r a t i o n b e t w e e n
d i f f e r e n t n a t i o n a l p r o v i s i o n s . T h e e ff o r t s o f U N IC T R A L a r e
586
“For instance, in the case of New York v. Vacco Golden Chips Casino, a subsidiary of a New
York corporation is an Antiguan corporation licensed to operate gambling facilities in Antigua.
Golden Chips operated web sites from Antigua, which were accessible to Internet users in New
York. The New York Supreme Court ruled that Golden Chips violated New York’s anti-gambling
laws. This ruling was able to be enforced successfully as Golden Chips’ directors and employees
were in the US”. Ibid., p. 67.
344
o r g a n i z a t i o n wi t h gl o b a l l e g i t i m a c y. In t h e q u e s t f o r a p p r o p r i a t e
c o m m u n i t y a s a w h o l e . T h i s i s e v i d e n t i n t h e c o n t ex t o f B 2 C
d i s p u t es , b y e x a m p l e s o f s u c h n e t w o rk s t h a t a r e p r o v i d e d b y
( F E D M A ) . 587 F u r t h e r m o r e , i t b e c a m e e v i d e n t b y t h e s u c c e s s o f
IC A N N a n d t h e U D D P s ys t e m i n f a c i l i t a t i n g a r b i t r a t i o n o f
international organizations.
a n d t o e n s u r e u n i v e r s a l a c c e p t a n c e o f c o m m o n p r i n c i p l es a n d
p o l i c i e s t o u n d e r p i n n a t i o n a l a n d i n t e r n a t i o n a l a c t i o n s . 588 It w i l l
act also as a global information center for future parties and will
p a t c h w o r k l i m i t s t h e p a r t i e s ’ a b i l i t y t o a c c e s s t h e r el e v a n t
345
w i t h g r e a t e r i n t e rn a t i o n a l l e g i t i m a c y t h a t t h e A B A ” . 589 T h e
p e r f o r m a s i m i l a r f u n c t i o n t o t h e IC C i n t h e f u t u r e , a n d w i l l h e l p
t o b o o s t u s e r s ’ e - c o n f i d e n c e a n d t r u s t . 590
T h e n e c e s s i t y o f a n i n t e r n a t i o n a l n e t wo r k i s a d v o c a t e d b y
t h e “ O r g a n i z a t i o n fo r E c o n o m i c C o - o p e r a t i o n a n d D e v e l o p m e n t ”
( O E C D ) g u i d e l i n e s f o r t h e p r o t e c t i o n o f c o n s u m e r s i n e l e ct r o n i c
d e v e l o p f a i r , e f f e c t i v e O D R ” . 591 T h e i n t er n a t i o n a l a c c e p t a n c e o f
In f o r m a t i o n s o c i e t y” o n t h e 2 2 n d J u l y 2 0 0 0 a n d t h e “ B u i l d i n g
t h e O E C D , t h e “ H a g u e C o n f e r e n c e o n P r i v a t e i n t e r n a t i o n al l a w ”
a n d t h e IC C . 592 T h e A B A a l s o s t a t e s t h a t i n o r d e r t o p r o v i d e
589
BENYEKHLEF Karim and GELINAS Fabien, op. cit., p. 81.
590
WANG Fangfei Faye, op. cit., pp. 55, 56.
591
OECD guidelines for consumer protection in the context of electronic commerce, available at
http://www.oecd.org/fr/sti/consommateurs/oecdguidelinesforconsumerprotectioninthecontextofele
ctroniccommerce1999.htm For more information see infra at Guidelines.
592
FORTUN Alberto, IGLESIA Alfonso, CARBALLO Alejandro, Basis for the Harmonization of
Online Arbitration: E-arbitration-T Proposal, (2002), p. 10 available at
http://brownwelsh.com/Archive/e-arbitration-t_harmonization_proposal.pdf
346
support to ODR and electronic commerce a global approach is
r e q u i r e d . 593
Section 2: Clearinghouses
T h e O D R n e t w o r k w i l l h a v e o n l i n e c l ea r i n g h o u s e s t h a t w i l l
points for potential users and through the referral process form
a n a c c r e d i t a t i o n s ys t e m f o r O DR p r o v i d e r s . C l e a r i n g h o u s e s w i l l
p r o v i d e a l l t h e n e c e s s a r y i n f o r m a t i o n a b o u t O D R a s w e l l as O D R
user’s confidence.
M o r e t h a n t h a t , cl e a r i n g h o u s e s w i l l c o n t r o l t h e a c c e s s t o
O D R p r o v i d e r s b y o p e r a t i n g a s p o r t a l s t o t h e p r o v i d er s , a s
g a t e w a y e n t r y p o i n t s w i t h ex p e r t s w h o w i l l p r o v i d e i n f o rm a t i o n
and assist the parties to choose the best possible provider from a
m e n u o f p o s s i b l e O D R o p t i o n s , b a s ed o n t h e n a t u r e o f t h e
d i f f e r e n t d i s p u t e - re s o l u t i o n s e r v i c e p r o v i d e r s , b u t wi l l a l s o
593
Ibid., p. 11.
594
CORTES Pablo, op. cit., pp. 193, 195.
347
provide the access point for individuals seeking redress.
l i n k i n g t o a l l d i s p u t e - r e s o l u t i o n s e rv i c e p r o v i d e r s c o m p l i a n t
h yp e r l i n k e d f r o m r e l e v a n t w e b s i t e s a n d In t e r n e t f o r u m s .
s ys t e m s w i l l e v a l u at e t h e o p e r a t i o n o f O D R p r o v i d e r s a n d e n s u r e
b e p e r f o r m e d t h r o u g h f e e d b a c k a n d r e p u t a t i o n s ys t e m s f o r
r e f e r d i s p u t e s t o t h e a c c r e d i t e d p r o v i d e r s . O n t h e c o n t r a r y, i f a
c l e a r i n g h o u s e w i l l r e m o v e t h e T r u s t m a r k a n d s t o p t h e r ef e r r a l s
t o t h a t p r o v i d e r . 595 In s h o r t , t h e r e f e r r a l s ys t e m w i l l o p e r a t e as
a n a c c r e d i t a t i o n s ys t e m t h a t w i l l b e m o n i t o r e d , u p d a t ed a n d
a n d ex c l u d e s a l l p r o v i d e r s w h o d o n o t ab i d e b y a m i n i m u m s e t o f
r e g u l a t o r y s t a n d a r d s . F i n a l l y, t h e c l e a r i n g h o u s e w i l l a s s i s t t h e
595
RULE Colin, op. cit., p. 281.
348
c h o i c e o f t h e p r o v i d e r , a n d t h e p a ym e n t , t h e r e b y p r o v i d i n g t h e
p a r t i e s w i t h a “ l i g h t f o r m o f l e g a l c o u n s e l ” . 596. A n e x a m p l e o f
s u c h a s ys t e m f r o m A D R i s t h e E C C - N e t ( E u r o p e a n C o n s u m e r
s ys t e m f o r A D R i n a l l E u r o p e a n U n i o n , p r o v i d es a “ o n e - s t o p
e s t a b l i s h e d i n a n o t h e r M e m b e r S t a t e , t h e n a t i o n a l c e n t er w i l l
r e s o l u t i o n s ys t e m i n t h a t f o r e i g n M e m b e r S t a t e . 597
“ i t w i l l d i s s em i n a t e i n f o r m a t i o n c o n c e r n i n g b e s t p r a c t i c e s f o r m s ,
a m u l t i l i n g u a l b a s i s v i a t h e W o r l d W i d e W e b ” . 598 A c c o r d i n g t o
ABA, the i-ADR center is the timeliest and most useful entity as
i t wi l l d i s s e m i n at e i n f o r m a t i o n a b o u t g u i d e l i n e s a n d a v a i l a b l e
596
SCHULTZ Thomas, Does Online Dispute Resolution Need Governmental Intervention? op.
cit., pp. 97- 99.
597
HÖRNLE Julia, op. cit., pp. 247- 249
598
WANG Fangfei Faye, op. cit., pp. 55, 56
349
p r o v i d e r s , i t wi l l d e v e l o p c o d e s s t a n d ar d s a n d g u i d e l i n e s , i t w i l l
p r o v i d e m u l t i l i n g u al s e r v i c e s a n d i t co u l d b e c o m e a T r u s t m a r k
or c e r t i f yi n g a u t h o r i t y. 599 O t h e r p r o j ec t s of c l e a r i n g h o u s es
a l r e a d y e x i s t , b u t n o t g o v e r n m e n t a l a n d n o rm a l l y c o n s u m e r s
p r o v i d e d b y g o v e r n m e n t ” , 600 o r a t l e a s t i n c o o p e r a t i o n w i t h o n e .
S e c t i o n 3 : An a c c re d i t a t i o n s y s t e m
In t h e g l o b a l O D R n e t w o r k d e s c r i b e d , t h e i n t e r n a t i o n al
O D R p r o v i d e r s . F o r i n s t a n c e i n B 2 C d i s p u t es , t h e e x i s t en c e o f
i s p r o p o s e d a s a s o l u t i o n t o a v o i d a b u s e s f r o m t h e b u s i n e s s e s . 601
O D R p r o v i d e r s , w h o w i l l h a v e t o a n s we r t o a n a u t h o r i t y t h a t c a n
599
ABA Task Force, Proposed guidelines for recommended best practices by online dispute
resolution providers available at
http://www.americanbar.org/content/dam/aba/migrated/dispute/documents/FinalReport102802.aut
hcheckdam.pdf
600
SCHULTZ Thomas, Does Online Dispute Resolution Need Governmental Intervention? op.
cit., pp. 97- 99.
601
CORTES Pablo, op. cit., pp. 195, 196.
350
m a n d a t e d e s i r a b l e c o n d u c t a n d s a n c t i o n c o n d u c t t h a t b re a c h e s
i d e n t i f i e d o b l i g a t i o n s . 602
T h e a c c r e d i t a t i o n o f O D R p r o v i d e r s wi l l b e d o n e i n t w o
w a ys ; f i r s t , c l e a r i n g h o u s e s t h a t w i l l o p e r a t e a s g a t e w a ys t o O D R
p r o v i d e r s w i l l r e f e r c a s e s o n l y t o t h e a c c r e d i t e d a n d t r u s t ed O D R
a n d ex c l u d e s a l l p r o v i d e r s w h o d o n o t ab i d e b y a s e t o f m i n i m u m
r e g u l a t o r y s t a n d a r d s . 603
a n a c c r e d i t a t i o n s ys t e m i n v o l v i n g a s e a l , f o r i n s t a n c e a g l o b a l
o r g a n i z a t i o n t o t h e a c c r e d i t e d O D R p r o v i d e r s . T h e p r o v i d e r s t h at
a b i d e b y m i n i m u m r e g u l a t o r y s t a n d a r d s w i l l b e a l l o we d t o
s e a l w i l l b e b a c k ed u p b y t h e r e l e v a n t g o v e r n m e n t a u t h o r i t y,
602
“Accountability can be internal and external, or both. Internal accountability typically promotes
self-evaluation and organizational development and enhances management practices and strategic
planning through internal measures and review, while external accountability usually involves
evaluation of performance and outcomes by a credible external entity (private or public) in the
context of predetermined boundaries”. See WANG Fangfei Faye, op. cit., p. 80.
603
HÖRNLE Julia, op. cit., pp. 247- 249.
351
t h e s e a l w a s r e m o v e d . 604 F u r t h e r m o r e , b e s i d e s t h e a c c r e d i t a t i o n
a c c r e d i t a t i o n i n OD R i n c l u d e m a i n l y p r a c t i t i o n e r k n o wl e d g e ,
m a i n t a i n i n g c o m m u n i c a t i o n a n d c o n t r o l l i n g i n f o r m a t i o n f l o w . 605
p e r m i t s r e g u l a t i o n ” . 606 A p r e r e q u i s i t e fo r t h e e f f e c t i v e n e s s o f
s u c h a n a c c r e d i t a t i o n s ys t e m i s t h e a b i l i t y o f p o t e n t i a l u s e r s t o
trust the accreditation body and since users are generally more
604
RULE Colin, op. cit., p. 281.
605
WANG Fangfei Faye, op. cit., pp. 84, 85.
606
SCHULTZ Thomas, Does Online Dispute Resolution Need Governmental Intervention? op.
cit., p. 95.
352
trusting of such bodies when they are connected with the
353
Chapter 2
In t h e i n t e r n a t i o n a l O D R s ys t e m t h e r e g u l a t i o n o f O D R
s h o u l d b e c o - r e g u l a t i o n , b a s e d o n p ri v at e i n i t i a t i v e s t h a t wi l l b e
i n t e r n a t i o n a l o r g a n i z a t i o n , w h i c h wi l l e n s u r e t h e e x i s t e n c e o f
m i n i m u m r e g u l a t o ry s t a n d a r d s , b y i s s u i n g g u i d e l i n e s i n t h e f o r m
a n d t h e s a f e g u a r d i n g o f f u n d a m e n t a l p ri n c i p l e s .
S e c t i o n 1 : R e g u l a ti o n o f O D R
w h e t h e r O D R s h o u l d b e r e g u l a t e d a n d i f s o , h o w? In a b r o a d
t h e f o r m u l a t i o n o f s t a n d a r d s o r r u l e s t o b e i m p l e m e n t ed , t h e
In a s t r i c t e r s e n s e , r e g u l a t i o n i s u n d e r s t o o d a s t h e f o r m u l a t i o n o f
354
the standards and rules. The lack of a uniform regulatory
e f f e c t i v e l y g o v e r n t h e i n c o n s t a n t a n d i n f i n i t e c yb e r s p a c e a n d
h a v e s h o w n t h a t t h e r e i s n o t ye t a n a p p r o p r i a t e f r a m e w o r k f o r
r e g u l a t i n g In t e r n e t a c t i v i t i e s .
T h e r e a r e t w o p r e v a i l i n g w a ys t o r e g u l a t e O D R . O n e w a y
t o r e g u l a t e O D R i s t h r o u g h a p u b l i c b o d y, w h i c h m a y b e a
i n i t i a t i v e s i n d e p e n d e n t f r o m a p u b l i c l a w f r a m e w o r k . F i n a l l y, a
c o m b i n a t i o n o f t h e s e a l t e r n a t i v e s p r o d u c e d a t h i r d h yb r i d w a y t o
607
For instance, the proposal for a Regulation of the European Parliament and of the Council on
online dispute resolution for consumer disputes in 2011.
355
o n i n d u s t r y t o r e g u l a t e i t s e l f . H o w e v er , b o t h i n E u r o p e a n d t h e
U n i t e d S t a t e s t h e r e g u l a t o r y a p p r o a c h t o t h e d e p l o ym e n t o f O D R
h a s b e e n m o s t l y h a n d s - o f f a n d p r o g r a m s p r o m o t i n g t h i s t yp e o f
s e l f - r e g u l a t i o n ( s u c h a s c o d e s o f c o n d u c t , t r u s t m a r k s , r e l i ab i l i t y
programs, and so on) have grown slowly but steadily over the
p a s t f e w ye a r s . 608 T h e p o p u l a r i t y o f p r i v a t i z at i o n , e s p e c i a l l y o n
s p e c i f i c a l l y. In t h e U S t h e “ M a g a z i n e r R e p o r t ” , o f J u l y 1 , 1 9 9 7
e x p l i c i t l y c a l l s f o r s e l f - r e g u l a t i o n i n t h e In t e r n e t . H o w e v e r ,
l a t e l y a l s o i n t h e EU In t e r n e t r e g u l a t i o n p o l i c y h a s c h a n g e d t o
f l e x i b l e r e g u l a t o r y r e g i m e s i n t h e f a c e o f t h e n o v e l s i t u a t i o n . 609
A. Governmental regulation
A s s t a t e d O DR c a n b e r e g u l a t e d t h r o u g h a p u b l i c b o d y a n d
m o s t o f t h e t i m e s t h i s b o d y w i l l b e a s t a t e . A l t h o u g h s t a t es h a v e
608
RULE Colin, op. cit., pp. 272, 273.
609
“In September 1997, the European Internet Services Providers Association (EuroISPA) was
established, thus marking transformation in EU policy. The EU provided funding to this
Association and encouraged industry self-regulation of the Internet. The EU Internal Market
Commissioner, Mario Monti, stated in April 1997, “We definitely want to avoid, like in other
sectors, having too much legislation too early”. See ZHAO Yun, op. cit., pp. 49- 54.
356
r e g u l a t e d t h e In t e r n e t , t h e p r o b l e m w i t h t h i s k i n d o f r e g u l a t i o n
e l e m e n t s o f t h e p h ys i c a l w o r l d ” , 610 w h e r e a s t h e v i r t u a l w o r l d i s
i n a p p l i c a b l e a n d c o n f u s i n g . In t h e o n l i n e e n v i r o n m e n t b o r d e r s
b e c o m e b l u r r y w h e n f o r e x a m p l e u s e rs c a n a c c e s s s e r v i c e s a n d
e n t e r t o t r a n s a c t i o n s f r o m a n yw h e r e i n t h e w o r l d . S u c h a
m a y l a c k l e g i t i m a c y o r a b i l i t y. 611
T h e b o r d e r l e s s n a t u r e o f t h e c yb e r s p a c e h a s p r e s e n t e d a
s e v e r e c h a l l e n g e t o In t e r n e t r e g u l a t i o n . E a c h s t a t e c a n r eg u l a t e
the internet and more specifically ODR, and state regulation has
h a s a s t r o n g i n c e n t i v e t o r e s o l v e d i s p u t es t o k e e p s o c i e t y
o f t h e m a t t e r s i t i s i n c h a r g e o f d e c i d i n g ” . 612 H o w e v e r , a s s e e n i n
t o r e g u l a t e t h e In t e r n e t w i t h o u t c a u s i n g a r i p p l i n g e f f e c t i n o t h e r
610
EU study on the Legal analysis of a Single Market for the Information Society, op. cit., p. 6.
611
LIYANAGE Chinthaka Kananke, The Regulation of Online Dispute Resolution: Effectiveness
of Consumer Protection Guidelines, Deakin Law Review, vol. 17, No. 2, 2012, p. 31.
612
SCHULTZ Thomas, Does Online Dispute Resolution Need Governmental Intervention? op.
cit., pp. 90- 92.
357
c o n f l i c t s a c r o s s b o rd e r s . 613 F u r t h e r m o r e , t h e g l o b a l n a t u r e o f t h e
o n a n i n t e r n a t i o n al l e v e l , a s n o s i n g l e g o v e r n m e n t c a n h a v e
O n t h e c o n t r a r y, a n i d e a l s o l u t i o n f o r t h e r e g u l a t i o n o f t h e
a i m t o b e e c o n o m i ca l l y p r o f i t a b l e a n d h a v e n o v e s t e d i n t er e s t i n
the outcome.
u n i f o r m l y, w h i c h w i l l b e a n a d v a n t ag e i n c r o s s - b o r d e r d i s p u t e
s e t t l e m e n t s . 614 F o r i n s t a n c e , i n s t i t u t i o n s s u c h a s t h e A A A , t h e
“ In t e r n a t i o n a l C e n t e r f o r t h e S e t t l e m e n t o f In v e s t m e n t D i s p u t e s ”
( IC S ID ) , C IA r b , t h e “ C h i n a In t e r n a t i o n a l E c o n o m i c a n d T r a d e
A r b i t r a t i o n C o m m i s s i o n ” ( C IE T A C ) , t h e “ In t e r n a t i o n a l C h a m b e r
613
“For example, one of the EU regulations, the European Data Protection Directive, prohibits
transfer of personal information from the EU to countries lacking adequate privacy protection.
This directive could be enforced against non-European companies with a presence in the EU.
However, this shall constitute impermissible extraterritorial regulation to those with less restrictive
privacy laws since it threatens to cut off their computers from European data”. ZHAO Yun, op.
cit., pp. 57, 58.
614
WANG Fangfei Faye, op. cit., pp. 33, 34.
358
of Commerce” ( IC C ) , the “Deutsches In s t i t u t fur
In t e r n a t i o n a l A r b i t r a t i o n ” ( LC IA ) , h a v e i s s u e d r u l e s f o r O D R
p r o c e d u r e s u n d e r t h e a u s p i c e s o f t h ei r r e s p e c t i v e i n s t i t u t i o n s ,
w h i c h a r e i n c l u d e d i n t h e O D R a g r e e m e n t s a n d c o n t r ac t u a l l y
b i n d t h e p a r t i e s a n d t h e i n s t i t u t i o n . 615
In t e r n a t i o n a l o r g a n i z a t i o n s a s w e l l a s g o v e r n m e n t s h a v e
w h a t i s k n o w n a s “ s ym b o l i c c a p i t a l ” , “ w h i c h i s t h e r e c o g n i t i o n ,
i n s t i t u t i o n a l i z e d o r n o t , t h at d i f f e r e n t a g e n t s r e c e i v e f ro m a
o f p r e s t i g e , o f s p e c i f i c q u a l i t i e s , a b i l i t i e s , o r a s s e t s ” . 616 T h e
s a m e i s t r u e i n d i s p u t e r e s o l u t i o n . T ra d i t i o n al l y i n t h e f i e l d o f
g o v e r n m e n t a n d i n j u d g e s . S i m i l a r l y, i n t e r n a t i o n a l o r g a n i z a t i o n s
a s r e g u l a t o r s o f O D R h a v e a g r e a t e r s ym b o l i c c a p i t a l a n d m o s t
615
HÖRNLE Julia, op. cit., pp. 93- 95.
616
“Brands, for instance, make use of symbolic capital”. See SCHULTZ Thomas, Does Online
Dispute Resolution Need Governmental Intervention? op. cit., pp. 90- 92.
359
B. Self-regulation
t h e r e g u l a t i o n o f t h e i n t e r n e t m a d e e v i d e n t t h a t c yb e r s p a c e
s h o u l d b e t r e a t e d a s a d i s t i n c t a n d i n d e p e n d e n t p l ac e f o r
r e g u l a t o r y p u r p o s e s a n d t h a t t h e r e w as a n e e d f o r a l t e rn a t i v e
c o n c e p t s . In o r d e r t o a v o i d c o m p l ex i s s u e s o f c o n f l i c t o f l a w s
r e g u l a t i o n d e v e l o p ed i n d e p e n d e n t l y o f a n y p u b l i c b o d y a n d s t a t e .
S e l f - r e g u l a t i o n c a n b e t h e r e s u l t o f an i n d u s t r y, o r a g r o u p o f
c o m p a n i e s a c t i n g c o l l e c t i v el y i n t h e f o r m o f a t r a d e a s s o c i a t i o n
o r o t h e r o r g a n i z a t i o n s r e p r e s e n t i n g t h e i n t e r e s t o f t h e i n d u s t r y;
o p e r a t i o n s ; a n d i t ca n b e t h e r e s u l t s o c i a l b o d i e s t h e a c t i o n s o f
w h i c h c a n h a v e v i t a l e f f e c t s o n t h e f u t u r e i n d u s t r y. T h e I n t e r n e t
d i f f e r e n t a s p e c t o f e l e c t r o n i c c o m m e r ce a n d s t r i v e t o p r o v i d e a
t h e y r e p r e s e n t . 617
617
“Internet Watch Foundation, Internet Local Advertising and Commerce Association, Internet
Services Association, Better Business Bureau, Consumer Bankers Association, Direct Marketing
Association, the Internet Privacy Working Group (IPWG), TRUSTe’s, etc.” See ZHAO Yun, op.
cit., pp. 43, 44.
360
The most common way for self-regulation, is through
t h e r u l e s c o n t a i n e d i n i t ” . 618 S e l f - r e g u l a t i o n i s a l s o i n ex t r i ca b l y
p r o p e r l y; a c o d e o f c o n d u c t m u s t b e a c c o m p a n i e d b y a s e l f -
e n f o r c e m e n t s c h e m e , f o r i n s t a n c e t ru s t m a r k s . Ho w e v e r , t h i s
a g a i n c l o s e l y c o n n e c t e d t o A DR a n d i t s ri s e d u ri n g t h e m i d d l e
a g e s . It c a n b e d a t e d b a c k t o m e d i e v a l t i m e s w h e n g u i l d s
m a i n t a i n e d s t a n d a rd s a m o n g t h o s e i n t h e t r a d e o f a p a rt i c u l a r
c o m p e t i t o r s . 619 T h e g r o w t h o f i n t e r n a t i o n a l t r a d e a t t h a t t i m e
commerce and the use of the internet have created its own
customs and usages which are the basis for a new kind of “lex
m e r c a t o r i a ” t h i s t i m e c a l l e d “ l ex i n fo r m a t i c a ” . A c c o r d i n g t o
w i t h o u t t h e a s s i s t a n c e o f g o v e r n m e n t s a n d p a r l i a m e n t s . T h i s t yp e
618
“The drafting of codes of conduct is recommended by several Directives, including the e-
commerce Directive and the Data Protection Directive”. See EU study on the Legal analysis of a
Single Market for the Information Society, op. cit., pp. 27- 29.
619
ZHAO Yun, op. cit., pp. 43, 44.
361
of market regulation promotes efficiency through competition,
g l o b a l i z a t i o n a n d d e v e l o p m e n t o f O DR .
i. Self-regulation in action
M a s s a c h u s e t t s “ O n l i n e O m b u d s O f f i c e ” , a n d e B a y’ s “ E s c r o w a n d
In s u r a n c e A r r a n g e m e n t ” . 620 T h e e f f e c t i v e n e s s o f s e l f - r e g u l a t i o n
c a n b e p r i m a r i l y p o r t r a ye d i n t h e c a s e s o f U D R P a n d E B a y. T h e
P o l i c y” ( U D R P ) s ys t e m c r e a t e d b y t h e “ In t e r n e t C o r p o r a t i o n f o r
A s s i g n e d N a m e s a n d N u m b e r s ” ( IC A N N ) f o r t h e r e s o l u t i o n o f
r e g u l a t i o n , w h i c h re g u l a t e s t h e c o n d u ct o f t h e p r o c e d u r e an d t h e
w a y i n w h i c h c a s e s a r e a s s e s s e d . It a p p l i e s i t s o w n p r o c e d u r a l
a n d s u b s t a n t i v e l aw d e v e l o p i n g a l e g a l b o d y o n d o m a i n n a m e s
362
transfer of domain names separate from the law of any country
o r a n y i n t e r n a t i o n a l t r e a t y. 621 B y r e f e r r i n g t o p r e v i o u s d e c i s i o n s
same manner that common law was created from the rulings of
t o d o s o . 622
A s u c c e s s f u l s ys t e m o f s e l f - r e g u l a t i o n i s a l s o e n a c t e d b y
e B a y, w h i c h i m p l em e n t s i t s o w n r u l e s t h r o u g h i t s o wn c o n s u m e r
s a t i s f a c t i o n s e r v i c es o r e x t e r n a l d i s p u t e r e s o l u t i o n m e c h a n i s m s
a n d e n f o r c e s t h e m t h r o u g h a n e f f e c t i v e r e p u t a t i o n i n c e n t i v e.
p r o h i b i t i v e c o s t s o f l i t i g a t i o n , w h i c h ar e d i s p r o p o rt i o n e d t o t h e
d i s p u t e t o r e a c h t h e c o u r t s , i n t h e r an g e o f l e s s t h a n o n e p e r
t r a d i t i o n a l j u d i c i a l r o u t e m a d e e v i d en t t h a t n a t i o n a l l aw s h a d
l i t t l e b e a r i n g o n t h e s e c a s e s . In s t e a d w h a t h a s m o r e r e l e v a n c e i s
363
a p p l i c a b l e u s e r p o l i c i e s . “ R e g u l a r l y u p d a t e d a n d c o m p l et e d o n
a n d f o r m a l i z e d s et o f r u l e s o f c o n d u c t ” . 623 E B a y l a w h a s b e e n
b r o u g h t t o b e a r o n s u b s e q u e n t c a s e s . 624 F i n a l l y, e B a y e n s u r es
u s e r s w e r e s a n c t i o n e d i f t h e y r e f u s e d t o p a r t i ci p a t e i n t h e
p o i n t s ” t h a t at t a c h t o e a c h u s e r ’ s p r o f i l e , w h i c h i s a n i m p o r t a n t
l e v e r i n s u c h a n e n v i r o n m e n t . C o n s e q u e n t l y, t h e c o m p l i a n c e r a t e
e B a y h a d d e v e l o p e d “ a n o r m a t i v e s ys t e m t h a t i s a u t o n o m o u s , h a s
i t s o wn n o r m s , a p p l i e s t h e m p ri v a t e l y a n d i n d i r e c t l y e n f o r c e s
t h e m t h r o u g h t h e r e p u t a t i o n a l i n c e n t i v e” . 625
623
SCHULTZ Thomas , Carving up the Internet : Jurisdiction, Legal Orders and the Private/Public
International Law Interface, The European Journal of International Law, vol. 19, 2008, p. 836.
624
CORTES Pablo, op. cit., pp. 184- 193.
625
SCHULTZ Thomas, The Roles of Dispute Settlement and ODR, op. cit., p. 5.
364
ii. Advantages of self-regulation
r e l a t i n g m o s t l y t o e x p e r t i z e , t i m e - e f f i c i e n c y a n d f l e x i b i l i t y.
b e c a u s e o f t h e g r e a t e r e x p e r t i z e o f t h e i n d u s t r y p l a ye r s i n v o l v e d ,
a s i n c o m p l ex c r o s s - b o r d e r o r t e c h n i c a l i s s u e s . 627 F u r t h e r m o r e,
f r o m a l a w a n d e c o n o m i c s p o i n t o f v i e w, t h e c o s t o f r e g u l a t i o n i s
s h i f t e d t o t h e i n d u s t r y a n d t h e w i l l i n gn e s s t o f o l l o w r u l es m a d e
b y t h e e x p e r t s r a t h e r t h a n t h o s e p a s s ed b y a d m i n i s t r a t o r s c o u l d
l e s s e n f o r c e m e n t i s r e q u i r e d . 628 S e l f - r e g u l a t i o n i s u s u a l l y f a s t er
626
RULE Colin, op. cit., pp. 272, 273.
627
CORTES Pablo, op. cit., pp. 184-193.
628
ZHAO Yun, op. cit., pp. 45, 46.
365
i n e s t a b l i s h i n g r u l es c o m p a r e d t o g o v e r n m e n t a l r e g u l a t i o n , e v e n
a r e d e v e l o p i n g r a p i d l y. G o v e r n m e n t a l r e g u l a t i o n f o r O DR c a n
e a s i l y b e c o m e o u t d a t e d w i t h t h e s e d e v e l o p m e n t s a n d “b y t h e
t i m e a n y l a w c a m e i n t o e f f e c t , t h e e - co m m e r c e e n v i r o n m e n t a n d
w o r s t ” . 629 S e l f - r e g u l a t i o n i s f l ex i b l e , ea s i e r t o c h a n g e a n d i n
n a t u r e o f a d i s p u t e r e s o l u t i o n m e t h o d o r p r o c e s s . 630
W h e n a s el f - r e g u l a t i o n s c h e m e i s ac c o m p a n i e d b y a n
a p p l i c a t i o n t o e n f o r c e m e n t . F o r a l l t h e a b o v e r e a s o n s , i t h as
629
United Nations Conference on Trade and Development, E-commerce and Development Report,
2003, p. 190, available at http://unctad.org/en/Docs/ecdr2003ch7_en.pdf
630
EU study on the Legal analysis of a Single Market for the Information Society, op. cit., pp. 32-
37.
366
happening on the In t e r n e t than t e r r i t o r i a l l y- b a s e d
g o v e r n m e n t s ” . 631
m e m b e r s t o c o m p l i a n t b e h a v i o r b a s e d o n r e p u t a t i o n i n c en t i v e s ,
a l w a ys t h e d i f f i c u l t y o f c o n v i n c i n g a l l t h e r e l e v a n t p l a ye r s t o
support the self-regulatory initiative and the fact that the real
n e e d e d r e g u l a t o r y a c t i v i t i e s ” . 633 A n o t h e r p r o b l e m w i t h s e l f-
a n d v a r i e t y o f t h e m m a y c r e a t e c o n f u s i o n , e s p e c i al l y w h e n
631
MANEVY Isabelle, op. cit., pp. 51, 52.
632
EU study on the Legal analysis of a Single Market for the Information Society, op. cit., pp. 32-
37.
633
ZHAO Yun, op. cit., p. 46.
367
p o t e n t i al u s e r s a r e n o t w i l l i n g o r a b l e t o d o t h e n e ce s s a r y
r e s e a r c h . 634
these users have not been involved in the drafting process and
m a y n o t a l w a ys s u f f i c i e n t l y p r o t e c t t h e r i g h t s o f n e i t h er u s e r s
n o r t h e p u b l i c i n t e r e s t ” . 635 E s p e c i a l l y w h e n t h e r e i s i n e q u a l i t y o f
they often pay the bills for ODR services, use them repeatedly
s i g n i f i c a n t p o t e n t i al f o r a b u s e o f O D R p r o c e s s e s b y b u s i n e s s a n d
m i n i m u m s t a n d a r d s f o r O D R . 636
634
LIYANAGE Chinthaka Kananke, op. cit., p. 31.
635
EU study on the Legal analysis of a Single Market for the Information Society, op. cit., p. 36.
636
RULE Colin, op. cit., pp. 272, 273.
368
C. Co-regulation
t h e s t a n d a r d s a n d p r o t e c t i o n t h r o u g h c o m p e t i t i o n a n d p ri v a t e l y
i n f o r m a t i o n a n d l i m i t e d c l i e n t c h o i c e ” . 637 F u r t h e r m o r e , O D R a s a
o r g a n i z a t i o n s t h a t m a y e x h i b i t s el f - i n t e r e s t a n d d i s r e g a r d f o r
p u b l i c i n t e r e s t . In s t e a d , t h e r e i s a n e e d f o r p u b l i c c o n t r o l t o
v e r i f y t h e s o u n d n e s s o f s el f - r e g u l a t o r y r u l e s a n d c o n t r o l m a r k e t
r e g u l a t o r y f r a m e w o r k , 638 h o w e v e r , i t h a s b e c o m e c l e a r t h a t t h e
o f r e g u l a t i o n o r i n f a v o r o f s e l f - r e g u l a t i o n w h e n n e c e s s a r y.
637
MOREK Rafal, op. cit., p. 67.
638
LIYANAGE Chinthaka Kananke, op. cit., p. 31.
369
r e g u l a t i o n o r f u l l - b l o w n o p p r e s s i v e r e g u l a t i o n ” . 639 A s e v i d e n c e d ,
t h e r e a r e d i f f e r e n t w a ys t o r e g u l a t e O D R b u t t h e b e s t w ay i s c o -
c o n s o l i d at e s c o n f i d e n c e w i t h o u t o b s t ru c t i n g t h e d e v e l o p m e n t o f
ODR.
r e c o g n i z e d p a r t i e s i n t h e f i e l d ( s u ch a s e c o n o m i c o p e r a t o r s ,
s o c i a l p a r t n e r s , n o n - g o v e r n m e n t a l o r g a n i z a t i o n s o r a s s o c i at i o n s ) ,
d r a w i n g o n t h e i r p ra c t i c a l ex p e r t i s e , b a c k e d w i t h p u b l i c co n t r o l
c o n s u m e r p r o t e c t i o n . 640 S e l f - r e g u l a t o r y i n i t i a t i v e s a r e c o m b i n ed
r u l e s , c h e c k s c o m p l i a n c e a n d m a k e s s u r e t h a t v i o l at i o n s d o n o t
i m p a r t i a l i t y. T h e f l e x i b i l i t y a n d i n n o v a t i o n o f s el f - r e g u l a t i o n i s
b o t h f r e e d o m a n d ac c o u n t a b i l i t y. 641
639
According to Lawrence Lessig “We should resist simpleton distinctions; the choice has never
been between anarchy and totalitarianism, or between freedom and total control”. See SCHULTZ
Thomas, Does Online Dispute Resolution Need Governmental Intervention? op. cit., p. 106.
640
CORTES Pablo, op. cit., pp. 184- 193.
641
ZHAO Yun, op. cit., pp. 47, 48.
370
The optimum regulatory framework consists of multi-
s t a k e h o l d e r , m u l t i - l e v e l a n d m u l t i - i n s t ru m e n t p ri v a t e r e g u l a t o r y
i n i t i a t i v e s b a s e d o n l ex i n f o r m a t i c a , c o m b i n e d wi t h c o n t r o l b y
a n i n t e r n a t i o n a l p u b l i c b o d y, c o o p e r a t i n g w i t h s t a t e a u t h o r i t i e s ,
e n s u r i n g t h a t s e l f - r e g u l a t i o n o r g a n i z a t i o n s a r e w i l l i n g t o ad h e r e
i m p a r t i a l i t y, t r a n s p a r e n c y, a c c e s s i b i l i t y, effectiveness and
i n t e r n a t i o n a l s ys t e m a n d c o n s e q u e n t l y a l l r e g u l a t o r y e f f o r t s m u s t
international organizations.
Section 2: Guidelines
T h e i n t e r n a t i o n a l b o d y w i l l e n s u r e t h at t h e s e l f - r e g u l a t o r y
371
b y i s s u i n g g u i d e l i n e s f o r O D R i n t h e f o r m o f c o d e s o f co n d u c t .
r e s o l u t i o n . 642 T h e c o d e s o f c o n d u c t s h o u l d i n c l u d e a l l a s p e c t s o f
O D R f r o m g e n e r a l p r o v i s i o n s t o m o r e s p e c i f i c o n e s c o n ce r n i n g
t h e r u l e s , t h e p r o c e d u r e t h e a c c r e d i t a t i o n o f p r o v i d e rs a n d
e n f o r c e m e n t . F i n a l l y, i t s h o u l d c o v e r t h e s a f e g u a r d i n g o f O D R
c o n f i d e n t i a l i t y, a c c e s s i b i l i t y a n d s e c u r i t y. 643 S i n c e 1 9 9 9 w i t h t h e
s e n s e o f h o w O DR p r o v i d e r s s h o u l d o p e r a t e . 644 O D R p r o g r a m s
s t a n d a r d s , s o a s t o e n s u r e t h a t t h e y d o n o t l a t e r e n co u n t e r
642
RULE Colin, op. cit., p. 265.
643
WANG Fangfei Faye, op. cit., p. 92.
644
“Some of the organizations that have compiled standards for ODR service providers include:
the Organization for Economic Cooperation and Development; the G-8; the European Union;
agencies in the United States government, as well as those of Australia, Canada, Japan, and New
Zealand; the International Chamber of Commerce; the Better Business Bureau; the Global
Business Dialogue on e-Commerce; and the Trans-Atlantic Consumer Dialogue (TACD)”. See
RULE Colin, op. cit., pp. 269, 270.
372
resistance or opposition from standard setting bodies that
q u e s t i o n t h e i r p ro c e s s e s . 645
g o o d r e g u l a t i o n . 646 T h e s a f e g u a r d i n g o f t h o s e p r i n c i p l e s ca n b e
i n t o a c c o u n t b y O D R p r o v i d e r s . O n l y O D R p r o v i d e r s t h a t co m p l y
i t i s wo r t h m e n t i o n i n g t h e O E C D “ G u i d e l i n e s f o r C o n s u m e r
P r o t e c t i o n i n t h e C o n t ex t o f E l e c t r o n i c C o m m e r c e ” , 647 a s w e l l as
t h e i n t e r n a t i o n a l co - o p e r a t i o n m e e t i n g a n d t h e “ B u i l d i n g T r u s t
645
Ibid., p. 282.
646
EU study on the Legal analysis of a Single Market for the Information Society, op. cit., p. 22.
647
“Businesses, consumer representatives and governments should work together to continue to
use and develop fair, effective and transparent self-regulatory and other policies and procedures,
including alternative dispute resolution mechanisms, to address consumer complaints and to
resolve consumer disputes arising from business-to-consumer electronic commerce, with special
attention to cross-border transactions. Businesses and consumer representatives should continue to
establish fair, effective and transparent internal mechanisms to address and respond to consumer
complaints and difficulties in a fair and timely manner and without undue cost or burden to the
consumer. Consumers should be encouraged to take advantage of such mechanisms. Businesses,
consumer representatives and governments should work together to continue to provide consumers
with the option of alternative dispute resolution mechanisms that provide effective resolution of
the dispute in a fair and timely manner and without undue cost or burden to the consumer”. See
OECD guidelines for consumer protection in the context of electronic commerce available at
http://www.oecd.org/fr/sti/consommateurs/oecdguidelinesforconsumerprotectioninthecontextofele
ctroniccommerce1999.htm
373
C o n f e r e n c e o n P r i v a t e In t e r n a t i o n a l La w ” , t h e “ In t e r n a t i o n al
C h a m b e r o f C o m m er c e ” a n d t h e O E C D , p r o m o t i n g i n A DR f o r
a c c e s s i b i l i t y, t r a n s p a r e n c y, r a p i d i t y a n d s e r v i c e s f r e e o f c h a r g e
o r l o w c o s t f o r c o n s u m e r s ” . 648
In t h e E u r o p e a n U n i o n , s e v e r a l r e g u l a t i v e i n i t i a t i v e s o n
A D R h a v e b e e n t a k e n o v e r t h e ye a r s . S e v e r a l d i r e c t i v es d e a l
w i t h a s p e c t s o f o n l i n e t r a d e , m o s t n o t a b l y t h e 2 0 0 0 / 3 1 / EC
“ D i r e c t i v e o n d i s t an c e c o n t r a c t s ” . 650 T h e s e d i r e c t i v e s al t h o u gh
“ i n f o r m a t i o n s o ci e t y s e r v i c e s , w h i c h a r e d e f i n e d a s s e r v i c e s
p r o c e s s i s c o n d u c t ed o n l i n e , a n d a t a d i s t a n c e . 651
648
BENYEKHLEF Karim and GELINAS Fabien, op. cit., p. 77.
649
2000/31/EC Directive of the European Parliament and of the Council of 8 June 2000 on certain
legal aspects of information society services, in particular electronic commerce, in the Internal
Market ('Directive on electronic commerce') available at http://eur-
lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:32000L0031:en:HTML
650
97/7/EC Directive of the European Parliament and of the Council of 20 May 1997 on the
protection of consumers in respect of distance contracts - Statement by the Council and the
Parliament re Article 6 (1) Statement by the Commission re Article 3 (1), available at http://eur-
lex.europa.eu/legal-content/EN/TXT/HTML/?uri=CELEX:31997L0007&from=en
651
LODDER R. Arno and ZELEZNIKOW John, op. cit., p. 33.
374
T h e d i r e c t i v e 2 0 0 0 / 3 1 / EC w h i c h i s u s u a l l y c a l l e d t h e e -
c o m m e r c e d i r e c t i v e, o r t h e d i r e c t i v e o n e - c o m m e r c e r e g u l a t e s
a r t i c l e s e v e n , i t at t e m p t s t o “ l a y d o w n a c l e a r a n d ge n e r a l
i n t h e i n t e r n a l m a rk e t , i n o r d e r t o e n s u r e l e g a l c e r t a i n t y a n d
c o n s u m e r c o n f i d e n ce ” . 652 D i r e c t i v e 9 7 / 7 / E C o n d i s t a n c e s e l l i n g
a p p l i e s t o c o n s u m e r s b u yi n g p r o d u c t s a n d o r d e r i n g s e r v i c e s a t a
d i s t a n c e a n d i n cl u d e s n o t o n l y e - c o m m e r c e s e l l e r s b u t a l s o
d i s t a n c e s e r v i c e p ro v i d e r s t h e r e f o r e a l s o O D R p r o v i d e r s . T h e
a c c o r d i n g t o a r t i c l e o n e “ t h e o b j e c t o f t h e Di r e c t i v e i s t o
a p p r o x i m a t e t h e l aw s , r e g u l a t i o n s a n d a d m i n i s t r a t i v e p r o v i s i o n s
c o n c e r n i n g d i s t a n c e c o n t r a c t s ” . 653
o u t o f c o u rt b o d i es i n v o l v e d o n t h e c o n s e n s u a l r e s o l u t i o n o f
c o n s u m e r d i s p u t e s ” 654 ( 2 0 0 1 / 3 1 0 / EC ) o f A p r i l 4 2 0 0 1 e x p l i c i t l y
r e f e r s t o O D R a n d r e q u i r e s e a s y a c c e s s t o p r a c t i c a l , e ff e c t i v e
a n d i n ex p e n s i v e m e a n s o f r e d r e s s , i n c l u d i n g a c c e s s b y e l e c t r o n i c
m e a n s . F u r t h e r m o r e, r e c i t a l s i x s t a t e s t h a t “ n e w t e c h n o l o g y c a n
652
2000/31/EC Directive, article 7.
653
97/7/EC Directive, article 1.
654
2001/310/EC , Commission Recommendation of 4 April 2001 on the principles for out-of-court
bodies involved in the consensual resolution of consumer disputes available at http://eur-
lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:32001H0310:EN:HTML
375
contribute to the development of electronic dispute settlement
s ys t e m s , p r o v i d i n g a m e c h a n i s m t o ef f e c t i v e l y s e t t l e d i s p u t e s
a c r o s s d i f f e r e n t j u r i s d i c t i o n s ” . 655 T h e r e c o m m e n d a t i o n a p p l i es t o
“ a n y o t h e r t h i r d p a r t y p r o c e d u r e s , n o m a t t e r w h a t t h ey a r e
b r i n g i n g t h e p a r t i e s t o g e t h e r a n d a s s i s t i n g t h e m , f o r ex a m p l e b y
m a k i n g i n f o r m a l s u g g e s t i o n s o n s e t t l em e n t o p t i o n s , i n r e a c h i n g a
s o l u t i o n b y c o m m o n c o n s e n t ” . 656 F i n a l l y, i t r e c o m m e n d s t h e f o u r
fairness.
2 0 0 8 / 5 2 / E C 657 d a t e s f r o m 2 1 M a y 2 0 0 8 a n d a i m s t o i n t r o d u c e
c i v i l p r o c e d u r e , i n o r d e r t o p r o m o t e f u r t h e r t h e u s e o f m ed i a t i o n
a n d e n s u r e t h a t p a r t i e s h a v i n g r e c o u r s e t o m e d i a t i o n c a n re l y o n
a p r e d i c t a b l e l e g a l f r a m e w o r k ” . 658 T h e D i r e c t i v e a d d r e s s e s ODR
a s e v i d e n t b y r e c i t a l n i n e w h i c h s t at e s “ t h e D i r e c t i v e s h o u l d n o t
655
2001/310/EC, recital 6.
656
2001/310/EC, recital 9.
657
2008/52/EC, DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL
of 21 May 2008 on certain aspects of mediation in civil and commercial matters, available at
http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2008:136:0003:0008:En:PDF
658
2008/52/EC, recital 7.
376
t e c h n o l o g i e s i n t h e m e d i a t i o n p r o c e s s ” . 659 A r t i c l e o n e d e s c r i b es
d i s p u t es b y e n c o u r a g i n g t h e u s e o f m e d i a t i o n ” . 660 A r t i c l e t h r e e
r e f e r r e d t o , w h e r e b y t w o o r m o r e p a r t i e s t o a d i s p u t e a t t em p t b y
s e t t l e m e n t o f t h e i r d i s p u t e wi t h t h e a s s i s t a n c e o f a m e d i at o r ”. 661
A r t i c l e f o u r e n c o u ra g e s t h e d e v e l o p m e n t o f , a n d a d h e r e n c e t o ,
s e r v i c e s . A r t i c l e s i x f a c i l i t a t e s t h e e n fo r c e a b i l i t y o f a g r e e m e n t s
r e s u l t i n g f r o m m e d i a t i o n b et w e e n M e m b e r S t a t e s . A rt i c l e s e v e n
e n s u r e s t h e c o n f i d en t i a l i t y o f m e d i a t i o n . A r t i c l e n i n e r e c o g n i z e s
t h e In t e r n e t , o f i n f o r m a t i o n o n h o w t o c o n t a c t m e d i at o r s a n d
o r g a n i z a t i o n s p r o v i d i n g m e d i a t i o n s e r v i c e s . 662
In t h e c a s e o f a r b i t r a t i o n , a s a n a d j u d i ca t i v e p r o c e s s , t h e r e
l e g a l s t a n d a r d s f o r c o n s u m e r d i s p u t e s . In a r b i t r a t i o n , t h e 1 9 9 8
659
2008/52/EC, recital 9.
660
2008/52/EC, article 1.
661
2008/52/EC, article 3.
662
2008/52/EC, articles 4, 6, 7 and 9.
377
c o m m i s s i o n “ R e c o m m e n d a t i o n o n t h e P r i n ci p l e s a p p l i c ab l e t o
t h e b o d i e s r e s p o n s i b l e f o r o u t o f c o u rt s e t t l em e n t o f c o n s u m e r
d i s p u t e r e s o l u t i o n p r o c e s s e s w h e r e t h e n e u t r a l p a r t y p l a ys a n
a c t i v e r o l e i n m a k i n g a d e c i s i o n o r a r e c o m m e n d a t i o n . Th e a i m
E u r o p e a n l e v e l t o f a c i l i t a t e t h e i m p l em e n t a t i o n o f o u t - o f- c o u r t
c o n f i d e n c e b e t w e e n e x i s t i n g o u t - o f - c o u r t b o d i es i n t h e d i ff e r e n t
a c t i v e i n t e r v e n t i o n o f a t h i r d p a r t y, w h o p r o p o s e s o r i m p o s e s a
c o n v i n c e t h e m t o fi n d a s o l u t i o n b y c o m m o n c o n s e n t . Al t h o u g h
a c c o u n t w h e n s e t t i n g u p a n y f o r m o f O D R ” . 664 T h e 1 9 9 8 EC
663
98/257/EC: Commission Recommendation of 30 March 1998 on the principles applicable to the
bodies responsible for out-of-court settlement of consumer disputes available at http://eur-
lex.europa.eu/legal-content/EN/TXT/HTML/?uri=CELEX:31998H0257&from=EN
664
KATCH Ethan & RIFKIN Janet, op. cit., p. 26.
378
Recommendation provides for seven general principles that
d i v e r g e n t i n t e r p r e t a t i o n . 665 T h e a d d i t i o n al p r i n c i p l e s i n c l u d e t h e
a d v e r s a r i a l p r i n c i p l e , a c c o r d i n g t o wh i c h a l l p a r t i e s m u s t b e
a l l o w e d t o p r e s e n t t h e i r v i e w p o i n t an d h e a r t h a t o f t h e o t h e r
p a r t y. T h e p r i n c i p l e o f l e g a l r e p r e s e n t a t i o n , a c c o r d i n g t o w h i c h
t h e p r o c e d u r e m u s t a l l o w t h e p a r t i es t o b e l e g a l l y r e p r e s e n t e d o r
a s s i s t e d a t al l s t a g e s a n d t h e p r i n c i p l e o f l i b e r t y, a c c o r d i n g t o
c l a u s e s m u s t b e c l ea r b e f o r e t h e c o n t r a c t i s s i g n e d . 666
In t h e U n i t e d S t a t e s t h e m o s t i n f l u e n t i al g u i d e l i n e s a r e t h e
f r o m 2 0 0 2 , d r a f t e d b y t h e “ A m e r i c a n B a r A s s o c i a t i o n (A B A )
r e c o m m e n d a t i o n s p r o p o s e “ p r o t o c o l s , w o r k a b l e g u i d e l i n es a n d
665
HÖRNLE Julia, op. cit., pp. 93- 95.
666
CORTES Pablo, op. cit., pp. 200- 204.
667
ABA Task Force, Proposed guidelines for recommended best practices by online dispute
resolution providers available at
.http://www.americanbar.org/content/dam/aba/migrated/dispute/documents/FinalReport102802.aut
hcheckdam.pdf
379
t r a n s a c t i o n s a n d b y o n l i n e d i s p u t e r e s o l u t i o n p r o v i d e r s ” . 668 T h e
c o m m e r c e g e n e r a l l y , a n d t o e n c o u r a g e c o n s u m e r s t o u s e OD R a s
a m e a n s o f o b t a i n i n g r e s o l u t i o n o f t h e i r c o m p l a i n t s ” . 669 T h e
s t a t e m e n t s ; o r b e r ef l e c t e d i n t h e o p e r at i o n o f t h e i r w e b s i t e s a n d
i n m a t e r i a l p o s t e d o n t h e i r w e b s i t e s ; o r b o t h ” . 670 T h e p r i n ci p l es
i m p a r t i a l i t y, c o n f i d e n t i a l i t y, p r i v a c y a n d i n f o r m a t i o n s e cu r i t y,
o n l i n e d i s p u t e r e s o l u t i o n b y i n t e r n a t i o n a l b o d i e s , p a r t i cu l a r l y
a d d r e s s i n g t h e q u e s t i o n o f b e s t p r a c t i ce i n O D R a n d p r o p o s i n g
g u i d e l i n e s , s u c h as t h e “ US f e d e r a l t r a d e c o m m i s s i o n a n d
668
Ibid., p. 1.
669
Ibid., p. 25.
670
Ibid., p. 25.
380
alliance for global Business”; the “global Business dialogue on
E l e c t r o n i c c o m m e rc e ” ; t h e “ t r a n s a t l a n t i c c o n s u m e r d i al o g u e ” ;
C o m m e r c e ” ( IC C ) . 671
S e c t i o n 3 : Pr i n c i p l e s o f O D R
It i s r e c o m m e n d e d t h a t t h e c o n d u c t o f O D R s h o u l d i n cl u d e
i m p a r t i a l i t y, t r a n s p a r e n c y, a c c e s s i b i l i t y, effectiveness and
i n i t i a t i v e s f o r O D R a b o v e , i t b e c a m e cl e a r t h a t t h e s e p r i n c i p l e s
a r e k e y c o n c e p t s a n d a n y O D R p r o v i d e r t a k i n g i t s e l f s er i o u s l y
671
LODDER R. Arno and ZELEZNIKOW John, op. cit., p. 36.
381
A . I n d e p e n d e n c e a n d Im p a r t i a l i t y
In d e p e n d e n c e a n d i m p a r t i a l i t y a r e e s s e n t i a l g u a r a n t e e s t o
e n s u r e a f a i r d i s p u t e r e s o l u t i o n a n d b o o s t t h e p a r t i e s ’ c o n fi d e n c e
i n t h e f a i r n e s s o f t h e O D R p r o c e d u r e . 672 In d e p e n d e n c e a n d
i m p a r t i a l i t y a r e e s s e n t i a l t o a v o i d a n y a p p e a r a n c e o f b i a s . 673 T h e
p r i n c i p l e o f i n d e p en d e n c e d e m a n d s t h a t O D R p r o v i d e r s c r e a t e a
f a i r e n v i r o n m e n t , u n b i a s e d t o w a r d s a n y i n d i v i d u a l p a r t y o r t yp e
r e l a t i o n s h i p b e t w e en t h e O D R p r o v i d e r, t h e p r a c t i t i o n e r an d t h e
c l o s e r t h e r e l at i o n i n a n y o f t h e s e s p h er e s , t h e l e s s i n d e p en d e n c e
t h e r e i s . 674 In c a s e s w h e r e t h e r e i s a s u b s t a n t i a l p o w e r i m b al a n c e
a d d r e s s i s s u e s o f s ys t e m i c b i a s t h a t a r i s e b e t w e e n p a r t i e s w h o
t h e p a r t i c u l a r d i s p u t e . If a n O D R p r o v i d e r b e g i n s t o e n t e r t o o
672
EU study on the Legal analysis of a Single Market for the Information Society, op. cit., p. 22.
673
“Impartiality has been given the meaning ‘absence of actual bias’ (subjective), whereas
independence has been taken to mean ‘absence of appearance of bias’ (objective), or in more
modern terminology, ‘absence of a relevant conflict of interest’ under the English common law.
Partiality or actual bias relates to the adjudicator’s internal prejudices, prejudgment or
predisposition towards one of the parties or the subject matter of the dispute. Independence is a
factual concept, in that it means absence of an objectively ascertainable conflict of interest.
Independence goes some way towards effectuating an absence of actual bias”. See HÖRNLE
Julia, op. cit., pp. 113, 114.
674
BADIEI Farzaneh, op. cit., pp. 90, 91.
382
i t s i n d e p e n d e n c e w i l l b e q u e s t i o n ed a n d t h e f e a r t h a t t h e
T h e p r i n c i p l e o f i m p a r t i a l i t y o r n e u t r a l i t y, 675 d e m a n d s t h at
w i t h t h e p a r t i e s , n o c o n f l i ct o f i n t e r es t w i t h ei t h e r o f t h e m . 676
e f f e c t i v e t h i r d p a r t y i n a d i s p u t e a n d OD R p r o v i d e r s s h o u l d w o r k
to ensure that the panelists they assign to work with the parties
t h a t t h e r e i s ) a co n f l i c t o f i n t e r e s t a n d t h e r e s h o u l d b e a n
675
“Impartiality and neutrality are often used interchangeably, but they have very specific
meanings in the context of dispute resolution. Neutrality is regarded by many in the ADR field as
unattainable. No person is truly neutral. The word ‘neutral’ is not an implication that the person
playing the role of the third party is to be a Zen master free from any opinion or thought on the
matters at hand. On the contrary Impartiality is a more attainable goal”. See RULE Colin, op. cit.,
pp. 277, 279.
676
“[The practitioner’s] professional or business background may mean that he or she belongs to a
particular interest or stakeholder group that influences his or her view of a dispute, which favors
one or the other party. In order to illustrate this argument, one could imagine an arbitrator, who is
a leading member of a consumer association, adjudicating a consumer-law dispute between a
business and a consumer as sole arbitrator. Similar constellations can be made out (e.g. IP rights
holder / user of IP, doctor/patient dispute or accident insurance company / claimants’ association
in personal injury cases) where the arbitrator belongs to one of the interest groups (e.g. to the
association of IP rights holders, the medical profession or an association of personal injury
claimants)”. See HÖRNLE Julia, op. cit., pp. 126, 127.
383
S o f t w a r e a l g o r i t h m s m u s t s i m i l a r l y b e d e s i g n e d t o o ff e r n o
s ys t e m i c b e n e f i t t o o n e p a r t y o v e r a n o t h e r . 677
p a r t i e s . H o w e v e r , t h i s i s s u e i s e a s i l y r e s o l v e d i n a s ys t e m w i t h
h o w e v e r , t h i s i s s u e w i l l b e a d d r e s s e d i n t h e r e l e v a n t s e c t i o n . 678
In s h o r t , i f a d i s p u t e r e s o l u t i o n s e r v i c e i s f u n d e d b y a n
T h e t h i r d r e q u i r em e n t r e l a t e s t o t h e i n d e p e n d e n c e a n d
i m p a r t i a l i t y o f t h e p r a c t i t i o n e r s . In a r b i t r a t i o n , t h e i n d e p en d e n c e
C o m m o n w e a l t h C o at i n g s C o r p . v . C o n t i n e n t a l C a s u a l t y C o . ( 3 9 3
U.S. 145, 1968), Judge Black expressed the need for arbitrators’
677
CORTES Pablo, op. cit., pp. 200- 204.
678
See infra at funding.
679
BADIEI Farzaneh, op. cit., p. 91.
384
completely free rein to decide the law as well as the facts and
a r e n o t s u b j e c t t o ap p e l l a t e r e v i e w , t h e i r e t h i c a l b e h a v i o r h a d t o
b e i m p e c c a b l e ” . 680 T o r e s o l v e t h i s i s s u e , O D R p r o v i d e r s m u s t
ensure that neither party should have more control over the
o f a p o o l o f p r a c t i t i o n e r s t h a t f u l fi l t h e c r i t e r i a o f e a c h c a s e . F o r
p e r t i n e n t t o t h ei r i n d e p e n d e n c e a n d i m p a r t i a l i t y. 681
B. Transparency
c l e a r a n d a v a i l a b l e t o t h e u s e r s . 682 T h e i n f o r m a t i o n m u s t b e a b l e
385
s t r u c t u r e , f u n d i n g m o d e l s , f e e s , o f f i ci a l s , s h a r e h o l d e r s , u s e r s
a n d o u t c o m e s ” . 683 O DR p r o v i d e r s m u s t m a k e s u r e t o p r o v i d e a l l
O n l y b y p r o v i d i n g t h i s i n f o r m at i o n c a n O D R p r o v i d e r s i n c r e a s e
f u n c t i o n i n g s m o o t h l y a n d e t h i c a l l y, w h e r e a s i f t h e p r o c e s s i s
o f O D R p r o v i d e r s w i l l d e c r e a s e o v e r t i m e . 684 T h e n e c e s s i t y o f
i n f o r m a t i o n a n d d i s c l o s u r e a s a b a s i s t o a c h i e v e s u s t a i n a b i l i t y,
which will help to instill confidence and trust in the new ODR
i n d u s t r y. 685 F u r t h e r m o r e , “ a n e m p h a s i s o n g r e a t e r a n d m o re
u n i f o r m d i s c l o s u r e m e c h a n i s m s wi l l h el p t o e d u c a t e a n d i n f o r m
a l l s t a k e h o l d e r s ” . 686
683
CORTES Pablo, op. cit., p. 203.
684
Some of the questions that must be answered include: What types of disputes are being handled
by the ODR service? What mechanisms are being used to handle them? Who is acting as a neutral
in these cases? What resolutions are being reached (either in mediations, during which the parties
craft the outcomes, or in arbitrations, in which the neutrals decide the outcomes)? See RULE
Colin, op. cit., pp. 273, 275.
685
WANG Fangfei Faye, op. cit., p. 55.
686
“The recommended course of action includes: publishing statistical reports; employing
identifiable and accessible data formats; presenting printable and downloadable information;
publishing decisions with whatever safeguards to prevent party identification; describing the types
386
Transparency must be achieved regarding several aspects
d e m a n d s d i s cl o s u r e o f O D R p r o v i d e r s , i n c l u d i n g o w n e r s h i p a n d
the origin of the funds, which would hinder the creation of bias
i n f a v o r o f a n y o f t h e p a r t i e s i n v o l v ed . R e g a r d i n g t h e p ro c e s s ,
t r a n s p a r e n c y d e m a n d s d i s cl o s u r e o f O D R p r o c e s s , i n c l u d i n g
f u l l y u n d e r s t a n d w h a t t h e y’ r e g e t t i n g i n t o a n d t h a t t h e y w i l l n o t
t h e m l o s i n g t h e i r co n f i d e n c e i n t h e s ys t e m . 687 T h e t r a n s p a r e n c y
i n f o r m a t i o n o n e v e n t u a l t e r r i t o ri a l o r m o n e t a r y r e s t r i c t i o n s . A l s o
t h e p r o c e d u r a l r u l es s h o u l d b e d i s c l o s e d , a n d t h e c o s t s o f t h e
n o r m s a p p l y, a n d h o w t h e p r o c e s s i s co n d u c t e d a n d o n t h e b a s i s
387
ODR p r o v i d e r . 688 T r a n s p a r e n c y at the levels of the p a n el
c o m p o s i t i o n e n s u r es “ s t r i c t p r o c e d u r e s f o r s e l e c t i n g n e u t r a l
a r b i t r a t o r s a n d m e d i a t o r s a n d t h a t t h e p a n e l i s t s w i l l b e s el e c t e d
a r i s e i n s u c h a p r o c e d u r e ” . 689
R e g a r d i n g t h e o u t co m e o f O DR p r o c ed u r e s , t r a n s p a r e n c y
O D R . It w o u l d b e i m p o s s i b l e t o t r u s t a n O D R p r o c e d u r e w i t h o u t
p r o d u c e . 690 If i t i s n o t p o s s i b l e t o s e e w h a t r e s o l u t i o n s w e r e
made (and how they were achieved), then there is potential for
a b u s e . 691 T r a n s p a r e n c y i s e s s e n t i a l i n c a s e s w h e r e t h e r e i s a
p o w e r i m b a l a n c e b e t w e e n t h e p a r t i es ( e . g . c o n s u m e r c a s e s ) .
E s p e c i a l l y f o r o n l i n e a r b i t r a t i o n wh e n o n e p a r t y u s e s a r b i t r a t i o n
r e p e a t e d l y, w h e r e a s t h e o t h e r p a r t y o n l y u s e s a r b i t r a t i o n o n c e ,
t h e “ o n e - s h o t ” p l aye r w i l l s u f f e r c o n s i d e r a b l e d i s a d v a n t a g e. 692
688
LODDER R. Arno and ZELEZNIKOW John, op. cit., p. 25.
689
BENYEKHLEF Karim and GELINAS Fabien, op. cit., p. 83.
690
WANG Fangfei Faye, op. cit., p. 81.
691
RULE Colin, op. cit., pp. 273, 275.
692
Two US circuit courts, in Cole v. Burns International, and more recently in Ting v. AT&T, have
explicitly acknowledged that confidentiality provisions for arbitration in adhesion contracts favor
companies over individuals if companies continually arbitrate the same claims. By way of
example, one tentative step in this direction has been made by the Californian Code of Civil
Procedure. It requires the publication of statistics about consumer awards, including the name of
the business party, type of dispute, the amount of the claim and the amount of the award made. See
HÖRNLE Julia, op. cit., p. 146.
388
Transparency in online arbitration allows for quality assurance
o f t h e d e c i s i o n , t o e n s u r e d e c i s i o n s a r e r a t i o n a l s i n ce t h e
i s e v i d e n t i n t h e T AC D g u i d e l i n e s , a c c o r d i n g t o w h i c h a s o l u t i o n
f o r a c h i e v i n g t r a n s p a r e n c y i s f o r O D R p r o v i d e r s “ t o r e p o rt t h e i r
c a s e s t o a p u b l i c l y a c c e s s i b l e c e n t r a l cl e a r i n g h o u s e ” . 694
d i f f i c u l t i e s w h i c h m a k e i t c o n t r o v e r s i a l . F i r s t , t h e p u b l i ca t i o n o f
a b l e t o i d e n t i f y t h e p r o v i d e r s t h a t h av e a t e n d e n c y t o r u l e i n
f a v o r o f t h e p a r t y t h a t c h o o s e s t h e p ro v i d e r a n d c o n s e q u e n t l y
and therefore the parties do not select the provider. The second
i n a c c u r a t e c o n c l u s i o n a b o u t t h e f a i r n e s s o f t h e p r o v i d e r . 695
693
“Transparency is an essential safeguard against bias and incompetence – to quote Bentham:
[Publicity] is the keenest spur to exertion, and the surest of all guards against improbity. It keeps
the judge himself, while trying, under trial.’” Ibid., p. 147.
694
RULE Colin, op. cit., p. 275.
695
“The National Arbitration Forum was the focus of a story in the Washington Post in 1999 that
revealed that the forum’s decisions went more than 70 percent of the time in favor of the business
interest. Many critics took that statistic to mean that the process was biased in favor of the
businesses. However, many of the cases taken on by NAF dealt with unpaid credit card bills.
389
The biggest concern about the publication of outcomes and
p r i n c i p l e o f c o n f i d e n t i a l i t y, w h i c h i s o n e o f t h e m o s t i m p o r t a n t
b r i n g f o r t h d i s p u t es t h a t t h e y m a y n o t h a v e b e e n w i l l i n g t o
p u b l i c i t y a n d m a y l e a d t o c o p yc a t c l a i m s ” . 696
O n t h e o t h e r h a n d , i f d e c i s i o n s a r e n o t re l e a s e d b i a s c a n g o
reduce the general public’s trust in the process and deter future
a b o u t t h e p o t e n t i a l c l o s e d O D R p r o g r a m s h a v e t o s ys t e m a t i c a l l y
c r e a t e d i s a d v a n t a g e s f o r i n d i v i d u a l c o n s u m e r s . 697 F u r t h e r m o r e , i n
o n l i n e a r b i t r a t i o n t h e p u b l i c a t i o n o f o n l i n e a r b i t r a l a w a rd s n o t
These cases are not ‘pure’ disputes, meaning a genuine misunderstanding between two well-
intentioned parties. Many of these cases were essentially collections matters”. See RULE Colin,
op. cit., p. 275.
696
SCHULTZ Thomas, Online Dispute Resolution: an Overview and Selected Issues, op. cit., p.
14.
697
RULE Colin, op. cit., pp. 268, 269.
390
b e p u b l i s h e d t o a l l o w f o r t h e d e v e l o p m e n t o f a r b i t r a l c a s e l a w. 698
i n f o r m a t i c a b y o n l i n e t r i b u n al s , w h er e a s , t h e p u b l i c a t i o n o f
f a c i l i t a t e t h e d e v e l o p m e n t o f l ex i n f o rm a t i c a , i t s a c c e p t a n c e b y
a r b i t r a t o r s ” . 699
b e t w e e n t h e t w o p r i n c i p l e s . To t h a t e n d , a n O D R s ys t e m c a n
c o n c e a l i n g t h e i r i d e n t i t i e s . 700 T h e c o m p e t e n t b o d y s h o u l d p u b l i s h
“an annual report setting out the decisions taken, enabling the
r e f e r r e d t o i t t o b e i d e n t i f i e d ” . 701 T h e A B A T a s k F o r c e h as
698
YÜKSEL, Armağan Ebru Bozkurt, op. cit., pp. 91, 92.
699
PATRIKIOS Antonis, op. cit., p. 27.
700
RULE Colin, op. cit., pp. 268, 269.
701
LODDER R. Arno and ZELEZNIKOW John, op. cit., p. 25.
391
i n f o r m a t i o n d e l e t e d ” . 702 T h e p o s s i b i l i t y o f s u c h a s o l u t i o n h as
c o l l e c t i n g a v a s t a m o u n t o f i n f o rm a t i o n o n t h e s e r v i ce s i t
p r o v i d e s , m u c h o f w h i c h i s g a t h e r e d i n r e a l t i m e , s i m u l t an e o u s l y
c o m p l e t e l y f o r e g o i n g c o n f i d e n t i a l i t y e x t e r n a l l y. 703
p o t e n t i al u s e r s m u s t b e a b l e t o e a s i l y f i n d a n d a c c e s s O DR . O D R
702
RODRIGUEZ Miguel Roberto, op. cit., p. 13.
703
WANG Fangfei Faye, op. cit., p. 74.
392
t h e s e r v i c e . 704 T a k i n g i n t o a c c o u n t t h e g l o b a l n a t u r e o f ODR ,
wherever it emerges through sets of rules that suit both same and
the norms and customs of people from other cultures as they will
ethnocentric but instead open minded and aware of the fact that
t h e y a r e w o r k i n g i n t h e i n t e r n a t i o n a l s c e n e . 706
A c c o r d i n g t o t h e p r i n c i p l e o f e f f e c t i v e n e s s , a n O DR
process must be both time and cost effective. The process should
case to the third party and a decision being made. The process
s p e c i f i c d i s p u t e . In B 2 C d i s p u t e s i t i s a r g u e d t h a t O D R s e r v i c e s
393
what is at stake. However, the cost effectiveness of ODR raises
t h e q u e s t i o n o f f u n d i n g a n d w h o w i l l p a y f o r t h e p r o c e s s ? Th i s
q u e s t i o n i s a n s w e r e d l a t e r o n . 708
e n s u r e a f a i r p r o c e d u r e . In d e p e n d e n t o f t h e t yp e o f d i s p u t e
r e s o l u t i o n p r o c e s s , f a i r n e s s i s t h e b a s i c a s s u m p t i o n u n d e r l yi n g
a l l p r o c e s s e s a n d w h i l e t h e d e g r e e o f f a i r n e s s v a r i es f r o m
i l l u s t r a t e t h e i m p o rt a n c e o f f a i r n e s s i n t h e p r o c e s s u s e s a s a n
s t r a t e g y a n d i f p a r t i e s p u r s u e a n o p t i m a l s t r a t e g y, e a c h g a m e
o f t h e p l a ye r s w o u l d h a v e t o p i c k a s p o t r a n d o m l y o r c o u l d h a v e
t w o c o n s e c u t i v e m o v e s , o n e o f t h e p l a ye r s w o u l d w i n b u t t h e
r e s u l t w o u l d b e u n fa i r . 709
In B 2 C d i s p u t e s “ f a i r n e s s p r i m a r i l y a i m s t o p r o t e c t t h e
c o n s u m e r a s t h e w e a k e r p a r t y” . 710 In o n l i n e a r b i t r a t i o n , d u e
p r o c e s s i s n e c e s s ar i l y a v i t a l c o m p o n e n t w i t h o u t w h i c h t h e
p r o c e s s d o e s n o t c o n s t i t u t e a r b i t r a t i o n . A t f i r s t t h e d u e p ro c e s s
708
See infra at funding.
709
LODDER R. Arno and ZELEZNIKOW John, op. cit., pp. 20, 21.
710
EU study on the Legal analysis of a Single Market for the Information Society, op. cit., p. 22.
394
the time efficiency of the online arbitration process. However,
r i s i n g ” . 711 A n i n t e r e s t i n g e x a m p l e f r o m p r a c t i c e c o n c e r n i n g
f a i r n e s s a n d t h e c o n c e p t o f r e a s o n a b l e t i m e c o m e s f r o m P a yP a l .
A c c o r d i n g t o C o l i n R u l e u s e r s o f P a yP a l d i s p u t e r e s o l u t i o n
consider the time the process takes as more important than the
o u t c o m e a n d t h e y w o u l d r a t h e r l o s e a f t e r a f e w d a ys , t h a n w i n
u n f a i r , i f f o r e x a m p l e P a yP a l d e c i d e d t o t h r o w a d i c e f o r e a c h
d i s p u t e a n d o u t c o m e s w o u l d t h e n b e t o o a r b i t r a r y. T h e r e f o r e , t h e
a n d f a i r n e s s . 712
In a r b i t r a t i o n t h e p r i n c i p l e o f f a i r n e s s d e m a n d s a f a i r
h e a r i n g a c c o r d i n g t o w h i c h b o t h p a rt i e s m u s t b e a l l o we d t o
p r e s e n t t h e i r c a s e s . 713 A c c o r d i n g t o a r t i c l e 3 4 o f t h e U N C IT R A L
711
BADIEI Farzaneh, op. cit., p. 92.
712
LODDER R. Arno and ZELEZNIKOW John, op. cit., pp. 20, 21.
713
“A good example of how the principle of fair hearing has been applied in international
arbitration is the US case of Iran Aircraft Industries v. Avco. In this case, the US Court of Appeals
for the 2nd Circuit refused to enforce an award by the Iran–US Claims Tribunal on the basis that
the US company had been denied an opportunity to present its case. The tribunal had agreed at a
pre-hearing conference that the US company would be allowed to present a summary of ‘kilos and
kilos of invoices’ produced by an independent audit. Later, the tribunal dismissed the US
company’s claim for the reason that the evidence was insufficient. The US courts refused to
enforce the award on the basis that the claimant had been denied an opportunity to present its
395
M o d e l La w , a n a c t i o n f o r s e t t i n g a s i d e t h e a w a r d m a y b e b r o u g h t
where “the aggrieved party was not given proper notice of the
o r w a s o t h e r w i s e u n a b l e t o p r e s e n t i t s c a s e ” . 714 T h e p r i n c i p l e o f
f a i r h e a r i n g i s c l o s e l y c o n n e c t e d t o t h e p r i n c i p l e o f e q u al a n d
a r b i t r a t i o n p r o c e d u re m u s t t r e a t t h e p a rt i e s e q u a l l y a n d m u s t u s e
a r a t i o n a l m e t h o d f o r f a c t - f i n d i n g a n d a p p l yi n g t h e l a w , 715 as
w e l l a s t h e d u t y t o g i v e r e a s o n s e x p l ai n i n g t h e g r o u n d s f o r t h e
a w a r d . 716
claim, as the tribunal had unwittingly misled the claimant as to the evidence to be presented”. See
HÖRNLE Julia, op. cit., p. 143.
714
UNCITRAL Model Law on International Commercial Arbitration, 1985, article 34.
715
“The equal treatment principle means that any hearing dates should be fixed at a date and place
that are roughly equally convenient for each party. Likewise, deadlines or word-limits that are too
tight for one party only, or the use of technology that is inaccessible for one party may be a breach
of the principle of equal and fair treatment. The principle of equal treatment also means that both
parties must have equal access to all documents and other evidence. Consequently, some
opportunity should be given to each party to acquaint itself with, and comment on, the
observations as to law and fact made by any other party”. Ibid., p.144.
716
For instance, the English Arbitration Act 1996 provides that if the parties have agreed to an
award without reasons, they are deemed to have excluded the right to appeal to the court on a point
of law.
396
Chapter 3
T h i s c h a p t e r r e l at e s t o t h e a r c h i t e c t u r e o f O D R a t t h e l e v e l
o f t h e p r o v i d e r an d p a r t i c u l a r l y i t i l l u s t r a t e s t h e w a y O D R
i n d e p e n d e n c e a n d i m p a r t i a l i t y; a s w e l l a s d e m o n s t r a t es t h e
a n d e f f e c t i v e s ys t e m . F i n a l l y, t h i s c h a p t e r s h o w s t h e ex t r a s t e p s
that ODR providers and the ODR network in general must take to
increase awareness and trust in ODR so that ODR can fulfill its
true potential.
S e c t i o n 1 : T h e O DR Fu n d i n g
the costs are minimized. However, there are still costs and an
O D R p r o v i d e r i n o rd e r t o e f f e c t i v e l y o p e r a t e n e e d s t o c o v e r “ t h e
397
costs related to case administration, and the fees and expenses of
m e d i a t o r s a n d a r b i t r a t o r s ” . 717 In o r d e r t o c o v e r t h e s e c o s t s t h e
ODR provider can search for funding from either both the parties
A n O D R s ys t e m t h a t i s f u n d e d b y e i t h e r b i l a t e r a l o r
provider. Most providers are for profit since user fees have been
also were for ADR providers. This has taken many forms,
i n c l u d i n g a f i l i n g f e e , a n h o u r l y r a t e f o r n e u t r a l t h i r d p a rt i e s , a
t o s e c u r i n g t h e n e c e s s a r y f u n d s f o r t h e o p e r a t i o n o f t h e p ro v i d e r
without charging fees that are too high, which can be the case
w a y t h a t m a y c o m p r o m i s e t h e i n d e p en d e n c e o f t h e p r o v i d e r ,
w h i c h c a n b e t h e c a s e f o r u n i l at e r a l f e e s . E s p e c i a l l y i n B 2 C
d i s p u t es , i t c a n p r o v e v e r y d i f f i c u l t f o r O D R p r o v i d e r s t o s e c u r e
the funds necessary for their operation and at the same time
717
BENYEKHLEF Karim and GELINAS Fabien, op. cit., p. 82.
398
A. Bilateral user fees
A l t h o u g h s o m e O DR s e r v i c e s a r e p r o v i d e d f o r f r e e , t h e
l e a s t s o m e o f t h e co s t s f o r t h e s e r v i c e. In t h e c a s e o f b i l a t e r a l
fees, the costs are shared by the parties. The way the costs are
b e t w e e n t h e p a r t i es . B a s e d o n t h e e x p e r i e n c e o f t h e A D R
t h e O D R p ro c e d u r e . B i l a t e r a l u s e r f e es a r e e a s y t o i m p l e m e n t
b i l a t e r a l u s e r f e e s p r e s e n t p r o b l e m s wh e n u s e d i n B 2 C a n d C 2 C
c a s e s . In t h e s e c a s e s t h e f e e s m i g h t b e e i t h e r i n s u f f i c i en t t o
cover the costs of the service and the funding model might not
c o m p a r e d t o t h e d i s p u t e d a m o u n t , w h i ch m i g h t i m p e d e c o n s u m e r
l o w e c o n o m i c v a l u e ( b e t w e e n $ 5 0 a n d 1 0 0 $ ) a n d i f t h e m ed i a t o r
charges $50 for the first hour of service no party will ever elect
t o u t i l i z e O DR . 718 T h e r e f o r e , s e r v i c e p r o v i d e r s c a n n o t i g n o r e t h e
718
RULE Colin, op. cit., pp. 294- 296.
399
B. Unilateral user fees
In o r d e r t o e n s u r e c o n s u m e r a c c e s s t o p r o c e e d i n g s , i n B 2 C
produce sufficient income and at the same time keep user fees
p r o p o r t i o n al l y l o w a s t o a l l o w f o r c o n s u m e r a c c e s s . In t h e c a s e
o f u n i l at e r a l f e e s , t h e c o s t s f o r t h e O DR s e r v i c e a r e c o v e r e d b y
o n e o f t h e p a r t i e s i . e . a w e b t r a d e r o r a n i n s u r a n c e c o m p a n y, b y
p a yi n g a n n u a l o r p r o c e s s i n g f e e s ; o r b o t h p a r t i e s p a y t h e c o s t s
c o n v i n c e c o n s u m e r s t o p a r t i c i p a t e i n OD R . T h e f u n d i n g a n d t h e
a v a i l a b l e t o t h e m s h o u l d a n yt h i n g g o w r o n g . 719 H o w e v e r , t h e f a ct
t h a t t h e f u n d s c o m e f r o m t h e b u s i n e s s ra i s e s i m p l i c a t i o n s o f b i a s
i n d e p e n d e n c e a n d i m p a r t i a l i t y. If a l l t h e c o s t s a r e b o r n e b y o n e
719
“SquareTrade and eBay are a good example of this. Users of eBay need to pay a small filing fee
when a mediator is brought into their case, but eBay pays SquareTrade for its services as well.
There is an acknowledgement that eBay is getting value from the presence of SquareTrade in their
trading environment, and eBay is helping to cover the cost of SquareTrade’s services by pitching
in on paying the cost of the neutral”. Ibid., p. 296.
400
take care of the business interest because that is where the funds
C. Safeguards
p r i n c i p l e s o f i n d e p e n d e n c e a n d i m p a r t i al i t y. A w a y t o e n s u r e t h e
f u n d i n g o f O D R p r o v i d e r s b y p u b l i c b o d i e s . In e a c h c o u n t r y t h e
i n d e p e n d e n c e a n d i m p a r t i a l i t y a n d a c c r e d i t t h o s e p r o v i d er s t h a t
a n d i m p a r t i al i t y. A s s t a t e d e a r l i e r , a n e s s e n t i a l r e q u i r e m e n t t o
T r a n s p a r e n c y o f t h e O D R p r o v i d e r a b o u t t h e o ri g i n o f i t s
c a n e n s u r e t h e i n d ep e n d e n c e a n d i m p a rt i a l i t y o f t h e p r o v i d e r .
401
D. Funding by External sources
t yp i c a l l y r e s e a r c h g r a n t s , b u t u n f o r t u n a t e l y t h e s e f u n d s a r e l e s s
f r o m v e s t e d i n t e r e s t ” . 720 O D R m o d e l s m a y b e p r o m o t e d a s m a t t er
c o m m e r c e . 721 S u c h a s o l u t i o n i s p o s s i b l e “ b e c a u s e g o v e r n m en t
i n t e r v e n t i o n d o e s n o t a i m t o b e e c o n o m i c a l l y p r o f i t a b l e an d t h e
g o v e r n m e n t c a n i n t e r v e n e i n d i s p u t e re s o l u t i o n a n d t h e r e b y l o s e
720
SCHULTZ Thomas, Online Dispute Resolution: an Overview and Selected Issues, op. cit., p.
15.
721
“The Better Business Bureau (BBB) has suggested that the expense of effective systems will
require a partnership amongst governments, not-for-profit foundations, academic institutions and
the private sector, in order to ensure that, at the least, the technological infrastructure is created.
The American Bar Association (ABA) Task Force has also supported the idea of government
subsidies”. See CORTES Pablo, op. cit., p. 76.
402
m o n e y, w h i c h i s e x a c t l y w h a t g o v e r n m e n t d o e s w i t h t r a d i t i o n a l
n o r i s t h e r e g u l a t i o n o f l a w ye r s a n d l e g a l p r a c t i c e ” . 722
S u c h a s o l u t i o n e l i m i n a t e s i m p l i c a t i o n s o f b i a s a n d s o l v es
t h e p r o b l em o f c o n s u m e r d i s p u t e s w h i c h a r e t h e m a i n o b s t a c l e
f o r p r o v i d e r s “ w h e n d e s i g n i n g b u s i n e s s m o d e l s wi t h a m i n i m u m
o f s u s t ai n a b i l i t y” . 723 In f a c t , t o d a t e m o s t B 2 C O D R p r o j e c t s
f r i v o l o u s c l ai m s . Th e f r e e o f c h a r g e s e r v i c e s t o c o n s u m e r h a s
b e e n a d v o c a t e d b y C o n s u m e r s In t e r n a t i o n a l a s a w a y t o e n s u r e
a c c e s s t o c o n s u m e rs w h o w o u l d n o t u s e O D R i f f e e s ar e t o o
f r o m p u b l i c f u n d i n g i s t h e Au s t r i a n In t e r n e t O m b u d s m a n . 724
722
SCHULTZ Thomas, Does Online Dispute Resolution Need Governmental Intervention? op.
cit., p. 93.
723
BENYEKHLEF Karim and GELINAS Fabien, op. cit., p. 83.
724
HÖRNLE Julia, op. cit., pp. 253, 254.
403
E. Solutions
f i n a n c i n g O D R s c h e m e , t h e i s s u e s ex am i n e d a b o v e m a k e s u c h a
s o l u t i o n d i f f i c u l t t o b e s u s t a i n e d . F o r t h i s r e a s o n i t h as o f t e n
b e e n p r o p o s e d p u b l i c f i n a n c i n g t o b u i l d a n O D R n e t w o rk , b u t
e x p e c t i n g t o b e s e l f- f i n a n c e d o n c e i t s t a r t s o p e r a t i n g . T h i s i s n o t
a n e a s y t a s k . In f a c t t h e r e h a v e a l r e a d y b e e n a n u m b e r o f f a i l e d
a t t e m p t s . 725 T h e b e s t s o l u t i o n i s a c o m b i n a t i o n o f f o r - p r o f i t O DR
t h e b e g i n n i n g . T h i s s o l u t i o n c o r r e s p o n d s w i t h t h e ex p e r i en c e o f
t h e A D R m o v e m e n t . 726
T h i s i s e s s e n t i al f o r O D R p r o v i d e r s r e s o l v i n g d i s p u t e s i n
725
“For instance, Electronic Consumer Dispute Resolution (ECODIR) was initially funded by the
European Commission, but it did not succeed in becoming a self-financed ODR provider. This
may be due to a number of reasons, the major of which was that it failed to get the co-operation of
large ecommerce vendors. This was indeed the key strategy of successful ODR providers, such as
CyberSettle partnerships with public and private institutions or the Internet Corporation for
Assigned Names and Numbers (ICANN) approved Uniform Domain Names Dispute Resolution
Policy (UDRP) providers”. See CORTES Pablo, op. cit., p. 76.
726
“For instance, the Dutch Foundation of ADR Committees for Consumer Affairs, an
independent organization offering ADR services, in addition to the users’ fees, has received
financial support from the Ministry of Justice. Also, the Danish Consumer Complaints Board is
funded by public funds and fees paid by businesses and consumers. The fee is refunded when
parties either settle or win the claim. Similarly, the UK Chartered Institute of Arbitration charges
claimants a low registration fee that will be refunded if they succeed with their claim”. Ibid., pp.
77.
404
s e r v i c e s w h i c h m ay r a i s e d u e p r o c e s s c o n c e r n s . F a i r n e s s , d u e
p r o c e s s , a c c e s s t o j u s t i c e a n d , u l t i m at e l y, t h e r u l e o f l aw a r e
i m p o r t a n t v a l u e s t h a t s h o u l d b e s u p p o r t e d b y p u b l i c f u n d i n g. 727
s u c h a s i n d i v i d u al s o r b u s i n e s s e s , t h ey h a v e t o s h a r e t h e c o s t s
e q u a l l y. 728 If t h e d i s p u t e i s b e t w e e n p a r t i e s w i t h u n e q u a l p o w e r,
such as B2C disputes, the weaker party should pay nothing at all
o r o n l y a m i n i m u m a m o u n t t o d e t e r f ri v o l o u s c l a i m s . T h i s w a y
overcome.
O D R u s e s IC T t o o l s a n d t h e In t e r n e t t o r e s o l v e t h e d i s p u t e
i n t h e v i rt u a l w o r l d . B u t , h o w d o e s t h e u s e r a c c e s s t h i s v i r t u a l
w o r l d ? P r a c t i c a l l y, O D R i s a s e r v i c e o f f e r e d o n t h e w e b a n d t h e
o f e q u a l i m p o r t a n ce t o i t s e f f e c t i v e n e s s a n d t h e q u e s t i o n t h a t
727
HÖRNLE Julia, op. cit., pp. 253, 254.
728
“In some cases, the complainant may also be required to pay a fee to register the case. This is
logical since when the proceedings are initiated, the respondent is not aware of the complaint and,
even when so informed, can choose not to respond”. See BENYEKHLEF Karim and GELINAS
Fabien, op. cit., p.82.
405
a r i s e s i s t h a t o f , h o w s h o u l d a n O D R s ys t e m b e s t r u c t u r e d , f r o m
c o n s i d e r a t i o n s e x t en d t o t h e s o ft w a r e u s e d i n t h e p r o c e d u r e a n d
i n t h e w h o l e l a yo u t o f t h e s e r v i c e . O f c o u r s e , t h e t e c h n o l o g i c a l
s t r u c t u r e o f O DR p ro v i d e r s m a y d i f f e r d e p e n d i n g o n t h e m e t h o d s
H o w e v e r , t h e r e a r e c o r e r e q u i r e m e n t s t h a t a r e n e c e s s a ry a n d
p e o p l e a s p o s s i b l e . It m u s t t a k e a d v a n t a g e a l l p o s s i b l e IC T t o o l s
c o m m u n i c a t i o n c a p a b i l i t i e s w h e n r e q u i r e d . O D R s ys t e m s m u s t b e
p e c u l i a r i t i e s o f e a c h c a s e . 730 T h e y m u s t p r o p e r l y s e c u r e s e n s i b l e
d a t a a n d c o m m u n i ca t i o n . O D R s ys t e m s m u s t b e a b l e t o a d a p t t o
the fast paced technological changes and provide the best tools
729
“Before, the neutral could do little more than arrange the room and table as everyone liked and
ask questions to help the parties make progress. Online, however, the neutral could completely
redesign and reshape the environment the parties found themselves in. The burdens of this
responsibility were both exciting and overwhelming, as few neutrals had any idea how to build an
online environment that would help their parties come to agreement”. See RULE Colin, op. cit., p.
46.
730
“For instance, typing and technical skills of the parties; time-zones; emotional stress;
socioeconomic and cultural differences; or the scale of investments by the parties that is
reasonable and feasible. In some cases, real time communication sessions, be it by email or web-
based communication tools, are best because they force the parties to more spontaneous and
because it may operate faster. In other cases it creates power imbalances, for instance when parties
have different typing skills. Sometimes, holding conversation in a turn-based and delayed manner,
for instance one day between each communication, is best, because the parties live in very
different time-zone or because it reduces the risk of the parties overreacting to statements of the
other party. Sometimes videoconference is needed because it reveals details of cultural and ethnic
background, age and gender.”. See SCHULTZ Thomas, Online Dispute Resolution: an Overview
and Selected Issues, op. cit., pp. 15 -18.
406
available as e v e ry day more sophisticated and powerful
m i s a p p l i e d a n d p o o r l y d e s i g n e d , i t c a n b e a m a j o r o b s t ac l e t o
r e a c h i n g a g r e e m e n t ” . 731
A. Accessibility
T o b e e f f e c t i v e t h e O D R s ys t e m n e e d s t o b e a c c e s s i b l e a n d
s i m p l e a s p o s s i b l e a n d p r o v i d e b a s i c t o o l s o f a s yn c h r o n o u s
c o m m u n i c a t i o n , s u ch a s t h e e - m a i l f o r l o w - t e c h u s e r s , b u t a t t h e
731
RULE Colin, op. cit., p. 60
407
e n v i r o n m e n t s , t o a c c o m m o d a t e t h e e x p e r i e n c e d u s e r s . 732 A n O DR
s i m p l y t h e q u a l i t y o f t h e i r a c c e s s t o t e c h n o l o g y. A n e x a m p l e o f
the later is the divide users may experience relating to the speed
s l o w a n d f a s t c o n n ec t i o n s .
i n t e r o p e r a b i l i t y. In t e r o p e r a b i l i t y i s a p r o p e r t y r e f e r r i n g t o t h e
a b i l i t y o f d i v e r s e s ys t e m s a n d o r g a n i z a t i o n s t o w o r k t o ge t h e r .
W i t h r e s p e c t t o s o f t w a r e a n d O D R s ys t e m s , i n t e r o p e r a b i l i t y i s
t h e c a p a b i l i t y o f d i f f e r e n t p r o g r a m s t o ex c h a n g e d a t a v i a a
c o m m o n s e t o f ex c h a n g e f o r m a t s , t o r e a d a n d w r i t e t h e s a m e f i l e
f o r m a t s , a n d t o u s e t h e s a m e p r o t o c o l s . La c k o f i n t e r o p e r a b i l i t y
w o u l d m e a n t h a t t h e p a r t i e s t o a d i s p u t e w o u l d n o t b e ab l e t o
732
For instance, “the UDRP does not envisage the use of innovative communications for online
hearings. The imaginative use of technology for real-time interaction, such as Web- and video-
conferencing and chat, should be explored to improve communication and the decision process”.
See HÖRNLE Julia, op. cit., pp. 209, 210
408
f a i l u r e ” . 733. T h e r e f o r e , O D R s ys t e m s m u s t b e d e s i g n e d w i t h
i n t e r o p e r a b i l i t y.
B. Ease of application
B e s i d e s b e i n g a c c e s s i b l e , a n e f f e c t i v e O D R s ys t e m n e e d s
t h e u n e x p e r i e n c e d t o f i g u r e o u t h o w t h e s ys t e m w o r k s a n d h o w
t o n a v i g a t e i t . 734 T h e e a s e o f a p p l i c at i o n c a n b e i n c r ea s ed
t h r o u g h s e v e r a l IC T t o o l s b e s i d e s t h e b a s i c t o o l s u s e d f o r
( “ d yn a m i c f o r m s ” ) w h i c h a l l o w p a r t i e s t o f i l e t h e s t at e m en t o f
case and defense online in a much easier way through forms that
a d a p t t o t h e s p e c i f i c s o f t h e c a s e a n d u t i l i z e t h e ex p e r i e n c e
733
POBLET Marta, op. cit., p. 15.
734
“For instance, access to multiple files in the system; user-friendly structured navigation;
personal space reserved for each user so that documents can be viewed and organized before they
are filed; easy access to the library of procedures; multi-format upload filing of digitized
documents; chronological table of events; protected and hierarchized message system; online user
guides, checklists, advice and assistance concerning both the procedure and use of the platform
itself; process management that is integrated yet can be broken into modules; incorporation of
access control lists and the lightweight directory access protocol (LDAP); incorporation of
daybook functions (calendar, reminders, to do lists); audio and video teleconferencing; online
payment”. See BENYEKHLEF Karim and GELINAS Fabien, op. cit., pp. 128, 129.
409
a c c u m u l a t e d b y s i m i l a r f o r m e r c a s e s o n p a r t i c u l a r t yp e s o f
d i s p u t es . 735
w o r k s p a c e s , e l e c t r o n i c f i l e m a n a g e m e n t a n d o n l i n e p l a t fo r m s ;
p r o v i d i n g a f a c i l i t y t o s h a r e v i s u a l i n f o r m a t i o n b y d i s p l a yi n g
t o ex p l a i n t h e i r ca s e a n d a r g u m e n t s a n d m a k e t h e p ro c e s s
a p p l i c a t i o n s t o m a k e i t e a s i e r t o p r o d u ce a n o u t c o m e b y t h e O D R
p r o c e d u r e , s u c h as s o l u t i o n s e t d a t a b a s e s a n d m u l t i v a r i a b l e
r e s o l u t i o n o p t i m i z at i o n p r o g r a m s . S o l u t i o n s e t d a t a b a s e s , w h i c h
r e s o l u t i o n s , b a s e d o n t h e d i s p u t e t yp e , t h a t a r e p r o p o s e d t o t h e
735
“Such online forms are ordinarily easier to complete than offline forms as they change
depending on the information entered. For example, if the claimant classifies the type of dispute as
‘non-delivery of goods’, the questions the form asks are tailored to this particular type of dispute”.
See HORNLE Julia, op. cit., p. 79.
736
“In this context, it is interesting to look at the results of a user survey conducted by the
American Arbitration Association (AAA) in 2004. They asked the users of their online filing
platform, WebFile, for what purposes did they use the WebFile; the result was that only 16.2 per
cent of users completed the entire arbitration process online. This may indicate that users do not
entirely trust or are not entirely familiar with online platforms as yet. However, 61 per cent of
users said that if the other party suggested using the online platform, they would in principle agree
to use it for some part of the procedure.” Ibid., p. 82.
410
p a r t i e s , c a n m a k e i t e a s i e r a n d f a s t er t o r e s o l v e t h e d i s p u t e ;
p r e f e r e n c e s p r o v i d e d b y t h e p a r t i e s . 737
C. Security
f o r O D R p r o v i d e r s . 738 A l t h o u g h i t i s t r u e t h a t “ a b s o l u t e s e c u r i t y
p e r f e c t e i t h e r ” . 739 A n O D R s ys t e m m u s t b e d e s i g n e d i n a w a y t o
737
”SquareTrade has reported that a simple solution set system they have deployed, resolves
almost 80 percent of their incoming disputes without requiring human intervention”. See RULE
Colin, op. cit., p. 56.
738
“In face-to-face processes, confidentiality concerns reside almost totally with the actions of the
dispute resolution service provider. But in online processes confidentiality goes hand-in-hand with
data security. Whatever technological platforms are provided for the parties to use in working out
their disagreement need to be well protected against those who might try to compromise the data
they contain”. Ibid., pp. 252, 253.
739
SCHULTZ Thomas, Online Dispute Resolution: an Overview and Selected Issues, op. cit., p.
15.
411
i n d u c e c o n f i d e n c e i n t h e d i s p u t e r e s o l u t i o n m e c h a n i s m . It m u s t
e m p l o y a c o m b i n a t i o n o f m e c h a n i s m s t o m ax i m i z e t h e s ec u r i t y
f i r e w a l l s . It m u s t c r e a t e a s e c u r e e n v i r o n m e n t b y p r o t e c t i n g t h e
a c c e s s o f t h e p a rt i e s a n d t h e t r a n s m i s s i o n a n d s t o r a g e o f
i n f o r m a t i o n w i t h e n c r yp t i o n . It m u s t e m p l o y a u t h e n t i c a t i o n
M u l t i p u r p o s e In t e r n e t M a i l Ex c h a n g e P r o t o c o l ” ( S / M IM E ) o r t h e
“ P r e t t y G o o d P r i v a c y” p r o g r a m . W e b - b a s e d c o m m u n i c a t i o n m u s t
b e s e c u r e d b y u s i n g t h e “ S e c u r e S o c k e t s La ye r ” ( S S L) , w h i c h
s e c u r e s t h e “ H yp e r t e x t T r a n s f e r P r o t o c o l ” , o r e v e n b e t t e r b y
u s i n g “ T r a n s p o r t La ye r S e c u r i t y” ( T L S ) , t h e s u c c e s s o r t o t h e
“ S e c u r e S o c k e t s La ye r ” ( S S L) p r o t o c o l . T h e s e c r yp t o g r a p h i c
a n d a l l o w m o s t t yp e s o f a p p l i c a t i o n ( s u c h a s w e b b r o w s i n g , e -
p r e v e n t t a m p e r i n g o r f o r g e r y. 740 S i m i l a rl y, s t o r e d d a t a m u s t b e
s e c u r e d w i t h f i r e w al l s .
740
WANG Fangfei Faye, op. cit., pp. 85, 86.
412
Section 3: Creating awareness and trust
f a i l e d i n t h e p a s t ye a r s . 741 O f c o u r s e t h e re a r e m a n y r e a s o n s t h at
b e s u c c e s s f u l m u s t r a i s e a w a r e n e s s a b o u t t h e i r ex i s t e n c e , s o t h a t
c u s t o m e r s a r e a w a re o f t h e i r a v a i l a b i l i t y a n d w h e r e t o f i n d t h e m ,
a n d e s t a b l i s h t r u s t , b e c a u s e o n l y t h e n w i l l p o t e n t i a l u s er s u s e
O D R t o r e s o l v e t h e i r d i s p u t e s . A w a r e n e s s a n d t r u s t a r e e s s e n t i al
f u l l y- f l e d g e d a l t e r n a t i v e t o A DR a n d l i t i g a t i o n ” . 742
741
CORTES Pablo, op. cit., pp. 183, 184.
742
KATCH Ethan & RIFKIN Janet, op. cit., p. 20.
413
A. Awareness
In a n a t t e m p t t o u n d e r s t a n d t h e l a c k o f a w a r e n e s s a b o u t
O D R t h e r e i s a s i m p l e ex p e r i m e n t t h a n a n yb o d y c a n e a s i l y
p e r f o r m b y a s k i n g a b o u t O D R a m o n g s t f r i e n d s a n d f a m i l y. T h e
author of this thesis decided to raise the issue using one of the
i l l u s t r a t e d t h a t a n ex c e p t i o n a l l y h i g h p e r c e n t a g e ( 9 o u t o f 1 0 ) o f
t h e a u t h o r s ’ F a c e b o o k f r i e n d s ( i n c l u d i n g s e v e r a l l a w ye r s a n d
O n e o f t h e b i g g e s t p r o b l e m s a n O D R s ys t e m f a c e s d u r i n g
i t s o p e r a t i o n i s t h e l a c k o f a w a r e n e s s a b o u t i t s ex i s t e n c e .
A w a r e n e s s i s l i m i t ed a m o n g t h e l e g a l p r o f e s s i o n a n d e v en m o r e
h a p p e n e d w i t h t h e V i r t u a l m a g i s t r a t e p r o j e c t a n d t h e E C O D IR ,
w h i c h w e r e n o t d e em e d s u c c e s s f u l d e s p i t e t h ei r v i a b i l i t y, t h e i r
i n i t i a l p i l o t p h a s e . 743 T h e s a m e p r o b l e m w a s e v i d e n t a l s o i n
t r a d i t i o n a l A D R a n d t o a c e r t a i n ex t e n d i s s t i l l t o d a y, s i n c e
l a w ye r s a n d e v e n m o r e s o t h e g e n e r a l p u b l i c a r e n o t f u l l y a w a r e
743
CORTES Pablo, op. cit., pp. 77- 79.
414
o f i t s ex i s t e n c e . H o w e v e r , a s s t a t e d i n t h e f i r s t p a r t o f t h e t h e s i s ,
t h e p a s t t w o d e c ad e s A D R i s b e i n g m o r e h e a v i l y p r o m o t e d
e s p e c i a l l y a s a w a y t o a l l e v i a t e t h e p r e s s u r e o n t h e j u d i c i al
s ys t e m a n d a w a r e n e s s h a s s i g n i f i c a n t l y i n c r e a s e d . B u t , s t i l l
a w a r e n e s s f o r O D R . 744 G r e a t e r a w a r e n e s s a n d u n d e r s t a n d i n g o f
A D R c o n c e p t s a n d p r o c e s s e s a r e n e e d e d f o r O D R t o f l o u r i s h . 745
f a c t t h a t O D R o p e ra t e s i n t h e v i r t u a l w o r l d w h e r e i n f o r m a t i o n i s
f a s t e r a n d m o r e e a s i l y a c c e s s i b l e , a n d d e s p i t e t h e f a c t t h at O D R
s ys t e m s h a v e b e e n p r o v e n a s t h e “ w o r l d ’ s m o s t s u c c e s s f u l
d i s p u t e r e s o l u t i o n s ys t e m s , c a s e l o a d - w i s e ” . 746 O n e r e a s o n f o r t h e
l a c k o f a w a r e n e s s a b o u t O DR i s i t s m i s r e p r e s e n t a t i o n . T h e
b l u r r e d l i n e s b e t w ee n O D R a n d O D P 747 a n d t h e f a c t t h a t i n B 2 C
d i s p u t es O D R s e r v i c e s w e r e d e v e l o p e d e s s e n t i a l l y a s s u b s t i t u t e
why ODR has remained so much under the radar, although “many
744
KATCH Ethan & RIFKIN Janet, op. cit., p. 21.
745
CORTES Pablo, op. cit., pp. 75- 77.
746
“To anyone asking whether online dispute resolution (ODR) works, whether it is important, a
simple answer may be offered: eBay today resolves through ODR about sixty million disputes per
year”. See SCHULTZ Thomas, The Roles of Dispute Settlement and ODR, op. cit., p. 2.
747
See supra at Online Dispute Prevention.
415
online shoppers have used an ODR system, but without actually
i d e n t i f yi n g i t a s s u c h ” . 748
that they offer ODR because their customers might think that
d i s p u t es w e r e a f r e q u e n t o c c u r r e n c e , wh e n i n f a c t t h e o p p o s i t e i s
b o u n d t o at t r a c t m o r e c u s t o m e r s ; f u r t h e r m o r e , b u s i n e s s e s h a v e
d i s p u t e r e s o l u t i o n s e r v i c e w i t h o u t d e t ra c t i n g f r o m t h e m a r k e t i n g
m e s s a g e s t h e b u s i n e s s i s at t e m p t i n g t o c o m m u n i c a t e . 749 A n o t h er
a d e q u a t e l y i n f o r m e d a n d c o n s e q u e n t l y r e l u c t a n t t o “t a k e p a r t i n
s t o r i e s ” w h i c h w o u l d c o n v i n c e p o t e n t i al u s e r s t o u t i l i z e OD R .
748
SCHULTZ Thomas, The Roles of Dispute Settlement and ODR, op. cit., p. 2.
749
“For instance, on eBay, the availability of dispute resolution services is only made clear at one
point in the initial transaction process, and is only advertised on a page, two or three levels down
in the website under customer service”. See RULE Colin, op. cit., pp. 291, 292.
750
KATCH Ethan & RIFKIN Janet, op. cit., p 22.
416
B. Trust
T h e r e i s a n i n ex t ri c a b l e c o n n e c t i o n b e t w e e n O D R a n d
t r u s t . O DR i t s e l f i s a t r u s t b u i l d i n g m e c h a n i s m . B e s i d e s s et t l i n g
d i s p u t es , O D R h a s t h e r o l e o f f a c i l i t a t i n g t r u s t i n t h e o n l i n e
e n v i r o n m e n t a n d e -c o m m e r c e t r a n s a c t i o n s . F u t u r e d e v e l o p m e n t
o f t h e In t e r n e t , e - c o m m e r c e a n d O DR a r e c o - d e p e n d e n t . R i s k ,
f e a r , a n d u n c e r t a i n t y l i m i t a c t i v i t y, w h i l e “ t r u s t h el p s p e o p l e
o v e r c o m e b a r r i e r s a n d m a k e s i t e a s i e r t o t r a d e a n d i n t e ra c t ”. 751
o t h e r p a r t y w i l l p e r f o r m a c c o r d i n g t o e x p e c t a t i o n s . 752
e n v i r o n m e n t wh i c h i s w o e f u l l y l a c k i n g i n t r u s t . 753 E s p e c i a l l y i n
t h e o n l i n e e n v i r o n m e n t w h e r e t h e p a r t i es t o a t r a n s a c t i o n s ca n n o t
751
RULE Colin and FRIEDBERG Larry, The appropriate role of dispute resolution in building
trust online, Artificial Intelligence and Law, vol.13, n.2, 2005, p. 197.
752
“Trust in the context of dispute resolution is an expectation that one’s cooperation will be
reciprocated, in a situation where one stands to lose if the other chooses not to cooperate. Risk:
The existence of risk is a precondition for trust. Only when one is at risk, dependent or vulnerable,
can his/her behavior or expectations demonstrate trust. Uncertainty: Trust can manifest only when
there is a degree of uncertainty regarding another’s future behavior; if the other’s behavior is pre-
ordained or controlled, trust is unnecessary and moot. Expectations: One expects that his/her
cooperation, or other trust-indicating action, will be reciprocated by the other”. See EBNER
Noam, ODR and Interpersonal Trust, In M.S. Abdel Wahab, E. Katsh & D. Rainey (Eds.) ODR:
Theory and Practice, (The Hague: Eleven International Publishing), 2012, pp. 3, 4.
753
“The recent Chinese survey ‘Lack of Trust Stifles Online Trade’ by the China Electronic
Commerce Association (CECA) alarmingly discovered that more than a third of Chinese
companies with experience in online trading do not trust e-commerce, while an earlier report
showed that 71.1 per cent of Chinese internet users who bought and sold online were wary of
fraud”. WANG Fangfei Faye, op. cit., pp. 15, 16.
417
be sure about who is on the other end of the computer screen
t r u s t i s m u c h h a r d e r t o e s t a b l i s h . 754 T h e s e n s e o f d i s t r u s t i s o n l y
e n h a n c e d b y c a s e s o f f r a u d a n d e x p l o i t a t i o n . 755 P e o p l e a r e o f t en
a f r a i d t o s h a r e p ri v a t e i n f o r m a t i o n o v e r t h e i n t e r n e t , s u c h a s
u s i n g t h e i r c r e d i t ca r d s f o r o n l i n e p u rc h a s e s , b e c a u s e t h e y a r e
r e s o l v i n g p o t e n t i a l d i s p u t es . 756
P r o v i d i n g f a i r a n d e f f e c t i v e O D R f o r s ys t e m s s u c h a s e -
s ys t e m . 757 E s p e c i a l l y s i n c e t h e p a r t i e s t h a t u t i l i z e a d i s p u t e
d i s p u t e r e s o l u t i o n c a n r e v e r s e t h e n e g a t i v e t r u s t i m p ac t t h e
i s s u e s i n c a s e a t r a n s a c t i o n g o e s a w r y a n d b e c o m e m o r e l o ya l t o
the marketplace than they would have been if there had been no
754
”There is an overarching sense of distrust people have whenever they approach the Internet. Its
positive characteristics and opportunities notwithstanding, the Internet has become something
similar to a bad neighborhood after dark. We watch where we are going, try and stay close to
familiar sites, and complain about the lack of competent policing. We constantly warn our children
regarding this global neighborhood, telling them not to stray from the main road and above all –
not to speak to strangers, let alone take candy from them. This environment is fraught with
distrust”. See EBNER Noam, op. cit., p. 8.
755
“Patricia Wallace, one of the early writers on the psychology of the Internet, noted how the fact
that all of these interactions have been used exploitatively in the past, cause users to approach the
Internet bearing a pre-emptive filter of distrust”. Ibid., p. 9.
756
WANG Fangfei Faye, op. cit., pp. 15, 16.
757
EBNER Noam, op. cit., pp. 1, 2.
418
p r o b l e m a t a l l . 758 T h e b e s t w a y t o e s t a b l i s h t r u s t i n t h e o n l i n e
t r u s t w o r t h i n e s s o f o n l i n e m e r c h a n t o r s e r v i c e s . Di s p l a yi n g t h e
t h e r e i s l i m i t e d i n f o r m a t i o n a b o u t t h e i r c r e d i b i l i t y. 759
p r o v i d e r s t h e m s e l v es r e l y o n t r u s t f o r t h e i r s u c c e s s f u l o p e r a t i o n .
A l t h o u g h a l l f o rm s o f A D R h a v e e n c o u n t e r e d d i s t r u s t , O D R i s
d i s t a n c e - c r e a t i n g a n d m a k e i t e v e n m o re c h a l l e n g i n g t o e s t a b l i s h
t r u s t . 760 T h i s d i s t r u s t i s o n l y i n c r e a s e d b y t h e n u m b e r o f d i s p u t es
a r i s i n g o u t o f e - c o m m e r c e . 761 O D R i n o rd e r t o b e e f f e c t i v e m u s t
t h a t m ax i m i z e s t h e c h a n c e o f a f a s t e r a n d s m o o t h e r r e s o l u t i o n . 762
In o r d e r f o r a n O D R p r o v i d e r t o b e s u c c e s s f u l i t n e e d s t o b e
758
“If the complainant’s anxiety grows to the point where they are coming to suspect that they
have been victimized, and then through direct communication the problem is resolved and their
anxiety is removed, then the negative presumptions they might have made about the
trustworthiness of the marketplace are cut off at the knees”. See RULE Colin and FRIEDBERG
Larry, op. cit., p. 202.
759
Ibid., p. 200.
760
EBNER Noam, op. cit., pp. 1, 2.
761
CORTES Pablo, op. cit., pp. 77- 79.
762
RULE Colin and FRIEDBERG Larry, op. cit., p. 203
419
uncertainty involved. Therefore, the ODR provider must
c o n f i d e n t i a l i t y a n d i m p a r t i a l i t y. 763 B e t w e e n t h e p a r t i e s , t r u s t i s
h i n d e r e d b y b o t h t h e i n h e r e n t d i s t ru s t c r e a t e d b y t h e a p p e a r a n c e
o f c o m m u n i c a t i o n . T h e O D R p r o v i d er m u s t e s t a b l i s h t ru s t i n
t h r e a t e n e d a n d d e fe n s i v e . 764 T h e O D R p r o v i d e r m u s t e s t a b l i s h
t r u s t t o a l l o w u s e r s t o f r e e l y s h a r e i n f o r m a t i o n wi t h o u t t h e f e a r
t h a t i t m i g h t b e u s ed a g a i n s t t h e m .
C yb e r s p a c e h a s a n o t o r i o u s c o n f i d e n c e p r o b l e m a n d t h e
s a m e p r o b l e m al s o a f f e c t s O D R w h i c h o p e r a t e s i n t h e s a m e
e n v i r o n m e n t . T h e r e a s o n f o r t h e l a c k o f t r u s t i n c yb e r s p a c e i s
t h e a b s e n c e o f c o n t r o l s i n c e t h e l a c k o f p h ys i c a l i n t e r a c t i o n c a n
a b s e n c e o f “ t r a d i t i o n a l p o i n t s o f r e f e r e n c e , w h i c h f o r m an
a r c h i t e c t u r e o f c o n f i d e n c e a n d b y w h i c h p e o p l e a s s es s t h e
t r u s t w o r t h i n e s s o f a n o f f l i n e s i t u a t i o n ” . 765 In t h e o f f l i n e w o r l d
420
“points of reference” and form an opinion about the
l a w ye r t o r e s o l v e a d i s p u t e , o n e d e a l s w i t h a r e a l p e r s o n o r a
r e a l o f f i c e o r a l i ce n s e a n d t h e r e i s s o m e t h i n g c o n n e c t e d t o a
p h ys i c a l e x i s t e n c e . S i m i l a r l y i f s o m e o n e v i s i t s t h e p h ys i c a l
o p i n i o n a b o u t t h e i r t r u s t w o r t h i n e s s . F o r e x a m p l e , e x p en s i v e
same does not apply in the online world, where the lack of such
“ p o i n t s o f r e f e r e n c e ” m a k e s i t d i f f i cu l t i f n o t i m p o s s i b l e t o
t h e m . In t h e o n l i n e w o r l d a n d s u b s e q u e n t l y i n O D R “ s u c h a n
p e o p l e t o h a v e c o n fi d e n c e ” . 766
C. Solutions
It i s e v i d e n t t h at f o r i t s e f f e c t i v e a n d s u c c e s s f u l o p e r a t i o n
421
a l s o e s t a b l i s h t r u s t t o r e t a i n t h o s e u s e rs . T h e r e a r e s e v e r a l w a ys
u s e r s ’ s e n s e o f t ru s t . B u i l d i n g t r u s t a n d b o o s t i n g c o n f i d e n c e
a c c r e d i t a t i o n m e c h an i s m s t o m e c h a n i s m s f o r p r o v i d i n g s e c u r i t y,
c e r t i f i c a t i o n a n d p r i v a c y. 767 A t t h e l e v e l o f d e s i g n a w a y t o
e n h a n c e t r u s t i s b y s a f e g u a r d i n g d a t a s e c u r i t y a n d p r i v a c y, b y
u s i n g e n c r yp t i o n t ec h n i q u e s a n d d i g i t al s i g n a t u r e s . At t h e l e v e l
o f o p e r a t i o n a w a y t o e n h a n c e t r u s t i s t r a n s p a r e n c y. A w a y t o
d e c i s i o n s w h i c h wi l l a l s o r a i s e a w a r e n e s s . T h e p u b l i c a t i o n o f
t r u s t i n O D R , b u t a t t h e s am e t i m e m u s t b e b a l a n c e d w i t h
c o n f i d e n t i a l i t y, o n e o f t h e m a i n a d v a n t a g e s o f O D R , f o r i n s t a n c e
i m p e r s o n a l s t a t i s t i ca l d a t a , s am p l e c a s e s , s e l e c t i v e p u b l i ca t i o n
767
WANG Fangfei Faye, op. cit., pp. 15, 16.
768
“All ODR providers should be subject to mandatory disclosure requirements, including: the
type of ODR procedure and its main features, e.g. languages; restrictions of the procedure, e.g.
monetary threshold etc.; requirements that consumers must meet, e.g. the previous attempt to
obtain redress through the business internal complaint system; governing structure; criteria for
becoming a neutral third party; costs, including fees and possible extra costs when decisions need
to be enforced; rules that serve as the basis for the body’s decisions, e.g. legal provisions,
considerations of equity, codes of conduct etc.; security measures to keep private data confidential;
enforceability of decisions and agreements; an annual report evaluating the functioning of the
provider”. See CORTES Pablo, op. cit., pp. 77- 79.
422
p r o c e d u r e s , f e e d b a c k s ys t e m s e n h a n c e t h e e s t a b l i s h m e n t o f t r u s t
b y a l l o w i n g u s e r s t o v o i c e t h e i r c o n c er n a n d a t t h e s a m e t i m e
p r o v i d e i n s i g h t s o n h o w t o i m p r o v e O DR . 769 A n o t h e r w a y t o r a i s e
t h r o u g h c l e a r i n g h o u s e s t h a t w o u l d ra i s e a w a r e n e s s b y b e i n g
g a t e w a y e n t r y p o i n t s a n d p o r t a l s t o O D R p r o v i d e r s t h at u s e r s
e s t a b l i s h t r u s t b y p r o v i d i n g a n a c c r e d i t a t i o n s ys t e m t o a s s e s s
O D R p r o v i d e r s a n d a r e p u t a t i o n s ys t e m t o r a t e t h e m . F o r
i n s t a n c e , i t c o u l d b e w i t h t h e u s e o f t r u s t m a r k s t o c e r t i fy O D R
t r u s t w o r t h i n e s s . 770 In o r d e r t o a v o i d co n f u s i o n a s i n g l e a n d
769
SCHULTZ Thomas, Does Online Dispute Resolution Need Governmental Intervention? op.
cit., pp. 75- 84.
770
“This is currently being effected in an informal manner by the European Commission, which
publishes a list of those providers that have been approved by the Member States. However, the
existing structure is rather limited, since providers have to comply only with unsupervised
recommendations and do not display a Trustmark”. See CORTES Pablo, op. cit., p. 194.
423
Conclusion
s ys t e m . O D R i s n o t e x a m i n e d a s a d i s t i n c t m o d e r n p h e n o m e n o n
t h e ye a r s a n d t h e f a c t t h a t d i s p u t e r e s o l u t i o n a l w a ys e v o l v e d i n
p a r a l l e l . In t h e b e g i n n i n g d i s p u t e s w e r e s i m p l e r a n d o c c u r r e d
b e t w e e n p a r t i e s w i t h g e o g r a p h i c a l p r o x i m i t y, s u c h a s w i t h i n t h e
c o n f i n e s o f a v i l l a g e o r a c i t y. F o r t h o s e d i s p u t e s , t r a d i t i o n al
s t a r t e d t o t r a v e l fu r t h e r d i s t a n c e s a n d c o m m u n i c a t e f r o m a f a r ,
d i s p u t es e v o l v e d a n d b e c a m e m o r e co m p l ex a n d i n c r e a s i n g l y
c r o s s b o r d e r . In o r d e r t o p r o v i d e a s a t i s f a c t o r y r e s o l u t i o n o f
t o r e s p o n d t o t h e n e e d c r e a t e d b y c r o s s b o r d e r d i s p u t es a n d
d i s p u t es . A D R o v e r c a m e t h e i n e f f i c i e n c i e s o f t h e t r a d i t i o n al
c o u r t s ys t e m a n d g r e a t l y f a c i l i t a t e d i n t e r n a t i o n a l c o m m e r c e . A s
d i s t a n c e c o m m u n i c a t i o n , i n t e r n a t i o n a l t r a v e l a n d i n t e r n a t i o n al
424
However, disputes evolved once more when the world was
T h e i n v e n t i o n o f p er s o n a l c o m p u t e r s a n d t h e i n t e r n e t a s w e l l a s
p e o p l e c o m m u n i c a t e a n d i n t e r a c t . In t h e d i g i t a l e r a p e o p l e a r e
corners of the world with the push of a button, through the use
A w h o l e n e w w o r l d w a s c r e a t e d i . e . t h e c yb e r w o r l d . D i s p u t e s
e v o l v e d b e c a u s e t h e n u m b e r o f c r o s s b o r d e r d i s p u t e s i n cr e a s e d
a s t h e y e x i s t e d s o l e l y i n t h e c yb e r w o r l d . T h e t r a d i t i o n al c o u r t
s ys t e m a n d t r a d i t i o n a l A D R p r o v e d i n e f f e c t i v e a n d i n o r d e r t o
A D R w i t h t h e i n fo r m a t i o n a n d c o m m u n i c a t i o n t o o l s o f t h e
T h e f i r s t p a r t o f t h i s r e s e a r c h p ro j e c t i l l u s t r a t e s t h e
e v o l u t i o n o f d i s p u t es a n d d i s p u t e r e s o l u t i o n f r o m t h e a n a l o g e r a ,
w h e n d i s p u t e r e s o l u t i o n w a s f a c e t o f a ce , t o t h e d i g i t a l e r a , w h e n
d i s p u t es a r e r e s o l v e d i n c yb e r s p a c e . O D R w a s c r e a t e d f r o m t h e
c o m b i n a t i o n o f AD R w i t h IC T t o o l s , t h e r e f o r e , i n o rd e r t o
u n d e r s t a n d O D R i t i s e s s e n t i al t o b e g i n w i t h A D R . T h e f i r s t h a l f
o f t h e f i r s t p a r t i s d e d i c a t e d t o A D R . P a r t i c u l a r l y, t h e f i r s t
c h a p t e r d e f i n e d A D R a n d d e m o n s t r a t e d t h e e v o l u t i o n o f d i s p u t es
425
a n d t h e d i s p u t e r e s o l u t i o n m o v em e n t fr o m t h e b i rt h o f AD R t o
t h e 2 0 t h c e n t u r y m o d e r n r e b i r t h . T h e s ec o n d c h a p t e r a n a l ys e d t h e
m a i n f o r m s o f A D R a s t h e y, i n t h e i r v i r t u a l r e p r e s e n t a t i o n , a r e
also the main forms of ODR. Although there are several ADR
f u n d a m e n t a l w a ys t o r e s o l v e d i s p u t e s ; o n e t h a t t a k e s p l a c e
b e t w e e n t h e p a r t i e s a n d w i t h o u t a n y e x t e r n a l h e l p ; o n e wh e r e a
n e u t r a l t h i r d p a r t y a s s i s t s t h e p a r t i es t o a d i s p u t e t o c o m e
t h e m s e l v e s t o a r e s o l u t i o n ; a n d o n e wh e r e a n e u t r a l t h i r d p a r t y
resolves the case for the parties with a binding and final
decision. T h e t h i r d c h a p t e r d e m o n s t ra t e s t h e a d v a n t a g e s a n d
a n d t h e d r a w b a c k s ar e a l s o c o m m o n t o O D R .
r e s o l u t i o n i n t h e d i g i t a l e r a i . e . O DR . T h e f i r s t c h a p t e r d e f i n e s
n e g o t i a t i o n , o n l i n e m e d i a t i o n a n d o n l i n e a r b i t r a t i o n . It a l s o
a n a l ys e s t h e s e c o n d o f t h e b u i l d i n g b l o c k s o f O D R i . e . t h e IC T
t o o l s a n d i l l u s t r a t es t h e i n f l u e n c e a n d t r a n s f o r m a t i v e p o w e r o f
t e c h n o l o g y i n d i s p u t e r e s o l u t i o n . Th e s e c o n d c h a p t e r p r o v i d e s a
426
b r i e f a c c o u n t o f t h e r e l a t i v e l y s h o r t e v o l u t i o n o f O DR , b y
p r e s e n t i n g t h e f i r s t i n i t i a t i v e s a s we l l a s t w o o f t h e m o s t
s u c c e s s f u l O D R ex am p l e s , o n e c o n n e c t e d t o e B a y a n d o n e t o t h e
In t e r n e t C o r p o r a t i o n f o r A s s i g n e d N a m e s a n d N u m b e r s ( IC A N N ) .
a r e u s e d i n t h e s ec o n d p a r t o f t h e t h e s i s i n o r d e r t o i d e n t i f y
ODR and the fact that ODR can respond more than adequately to
the needs of the digital era, as well as again help to identify the
c h a r a c t e r i s t i c s t h at a n O D R p r o v i d e r m u s t h a v e a n d t h e s er v i c e s
t h a t i t m u s t p r o v i d e i n o r d e r t o b e s u c c e s s f u l . It a l s o p r e s e n t s
p r o p o s i t i o n o f a n OD R s ys t e m .
that ODR is a necessity of the digital era but also that it has the
p o t e n t i al t o b e a r ev o l u t i o n a r y, e f f e c t i v e a n d s u c c e s s f u l w a y t o
r e s o l u t i o n . T h e s e co n d p a r t o f t h e t h e s i s i d e n t i f i e s t h e n e c e s s a r y
c h a r a c t e r i s t i c s o f t h e O D R s ys t e m .
O D R s ys t e m b a s e d o n t h e c o n c l u s i o n s d r a w n f r o m t h e f i r s t p a r t
427
o f t h e t h e s i s . T h e s e c o n d p a r t d e s c r i b e s t h e O DR s ys t e m , i t s
process and its architecture. The first half of the second part is
d e d i c a t e d t o t h e OD R p r o c e s s . B a s e d o n t h e e x p e r i e n c e o f t h e
d i s p u t e r e s o l u t i o n m o v e m e n t i t i s d em o n s t r a t e d t h a t t h er e i s a
n e e d f o r a m u l t i - m e t h o d a n d m u l t i -s t e p p r o c e s s t h a t t a k e s
a d v a n t a g e o f t h e d i s t i n c t c a p a b i l i t i es o f t h e m a i n w ays o f
d i s p u t es a n d t h e U N C IT R A L p r o p o s a l a s a n e x a m p l e o f s u c h
process.
s t e p o f t h e p r o c es s b e c a u s e o n l y a r b i t r a t i o n c a n p r o v i d e a
o u t c o m e s . T h e y a l s o p r o v i d e s o l u t i o n s t o al l p r o p o s e d c o n c e r n s
Y o r k c o n v e n t i o n i n o r d e r t o ex p r e s s l y f a c i l i t a t e t h e e n f o r c e m e n t
o f o n l i n e a r b i t r a l aw a r d s . A s f a r a s t h e o u t c o m e i s c o n c e r n e d t h e
428
would suffice. Th e thesis p r o v i d es such an ex a m p l e by
p r e s e n t i n g t h e U D R P s ys t e m .
a r c h i t e c t u r e o f t h e O D R s ys t e m r e g a r d i n g t h e n e t w o rk , t h e
r e g u l a t i o n a n d t h e p r o v i d e r s . A g a i n t h e e x a m i n a t i o n o f AD R a n d
O D R i n t h e f i r s t p a r t o f t h e t h e s i s a l l o w s c o n cl u s i o n s t o b e
O D R s ys t e m . T h e f i r s t c h a p t e r d em o n s t r a t e s t h e n e c e s s i t y o f a
g l o b a l a n d i n t e r n at i o n a l O DR n e t w o r k o f c o o p e r a t i o n i n a
n a t i o n a l l e v el t h r o u g h t r e a t i e s a n d i n s u p r a n a t i o n a l l e v e l u n d e r
r e l e v a n t s t a t e a u t h o r i t i e s a n d a l l o wi n g a c c e s s t o O D R a s we l l a s
c o n t r o l . A l s o , i t d em o n s t r a t e s i s t h e n e c e s s i t y f o r g u i d e l i n e s i n
t h e f o r m s o f c o d e s o f c o n d u ct i s s u e d b y t h e i n t e r n a t i o n a l
t h e c l e a r i n g h o u s e s t h a t w i l l a c c r e d i t t h e c o m p l yi n g p r o v i d e r s .
429
T h e t h i r d c h a p t e r d e s c r i b e s t h e a r c h i t e c t u r e o f t h e O DR
t h a t o f f e r t r a n s p a r e n t s e r v i c e s m o n i t o re d b y p u b l i c a u t h o r i t i e s
e n s u r e a c c e s s i b i l i t y, e a s e o f a p p l i c a t i o n a n d s e c u r i t y. F i n a l l y, i n
w i d e s p r e a d m a r k e t i m p l em e n t a t i o n . A w a r e n e s s a n d t r u s t a r e
r e s o l u t i o n a s a f u l l y- f l e d g e d a l t e r n a t i v e t o A D R a n d l i t i g a t i o n .
In c o n c l u s i o n , t h e t h e s i s d em o n s t r a t e s h o w t h e e v o l u t i o n
r e s e a r c h c o n d u c t e d o n t h i s e v o l u t i o n i d e n t i fi e s t h e e s s e n t i a l
c h a r a c t e r i s t i c s t h a t a n O D R s ys t e m m u s t p o s s e s s i n o r d er t o b e
fair, effective and successful and in order for ODR to fulfil all
430
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