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Online Dispute Resolution Gains Momentum

Online Dispute Resolution Gains Momentum

Online Dispute Resolution is not about re-inventing mediation per se but more about how can you use technology to optimise your practice and enhance the process and outcomes for you and your clients. Whether Online Dispute Resolution (ODR) or online mediation will materialise into a mainstream project is no longer a valid question; the ship has sailed and it’s gaining momentum.

Back in 2004, ADR Group, ran the first mediation pilot for eBay outside the US. At the time Mike Lind was the CEO of ADR Group and in this video Mike talks about the scepticism that was around at the time and how the privatisation of justice was first achieved. It's well documented that eBay now resolves roughy 60 million disputes each year with a mixture of Artificial Intelligence (AI) and active involvement of online mediators. These intelligent dispute systems are emerging in many different contexts from the low-value, high volume consumer disputes on sites like eBay and Alibaba to matrimonial disputes in the Netherlands and condominium disputes in British Columbia, Canada.

The Civil Resolution Tribunal is British Columbia’s Online Dispute Resolution initiative and aims to improve access to justice for those with disputes less than $25,000 Canadian dollars.  This is just one of many initiatives that shows just how quickly technology can change the game.

Just imagine being able to mediate a dispute between parties on different continents without having to leave the comfort of your own office. It's already happening and in this video Mike Lind talks about how the ODR landscape has changed in the UK and what the future might look like for mediation.

Once you've finished watching this one it's then time to watch the 'Grandfather' of ODR deliver his keynote address. Professor Ethan Katsh, one of the founders of ODR tells the story of Online Dispute Resolution in the next video (Click the link to watch it now).

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Full Transcript

Mike Lind:
The process of mediation is just enormously effective when it’s face-to-face. I started a project working with eBay, we touched on it briefly within Aled’s talk. About 10 years ago, in 2004, at ADR Group, we ran the first mediation pilot for eBay outside the US, dealing with online dispute resolution. There was a huge amount of scepticism within the meditation ranks about, “Is this process really going to work or not?”

I find whenever I was speaking to mediators, they were always on the dark side, “ODR is never going to work, it doesn’t provide the mechanism for you to have that real interaction with each other about how do you develop your rapport.” As Aled said, “How do you look someone in the eye when they’re saying, ‘No,’ to settlement offer that’s on the table?” There was a lot of scepticism around the early application of ODR.

I feel coming to you today, there’s going to be a lot of you thinking, “Coming along, see what’s Mike, and Aled and the team going to be talking about, how does this process really fit into ourselves as mediators?” It is a very powerful process, and I think you’ll find as we develop the day, we’re not talking about a complete reinvention of mediation. I think the real strength of mediation is you as individual practitioners, continuing your daily process and profession, but working out how can you actually make technology form a better part of what you do?

I think we’ll come onto that. I especially just want to look at a few examples that I find interesting in terms of looking at how technology and manufacture, and some technologies have changed the way we as society have emerged. Going back to the whole advent of transport, to get all of Model A and Model T Fords in the early 1900s, many of the horse drawn brigade were totally opposed to any form of motorised transport, they said, “It would never work, it would never take off.” Henry Ford persevered with it, came up with the first motorised vehicle. Enormous amount of scepticism, the same as some of our mediators have about ODR, but they persevered.

I think a phrase we might come across with quite a few times today is really looking at the notional concept of disruptive technologies, or disruptive innovations. I think the invention of the car itself, wasn’t in itself a disruptive technology. What was disruptive about it was the ability for it to be mass produced in a manner which was affordable to ordinary citizens. That is what actually changed how people and how society reacted to the advent of a motorised vehicle.

I think as we’ll come through ODR, we’ll see as well, there are lots of different forms of ODRs, lots of different providers out there, and they’ve all got excellent platforms, excellent way of operating, but hasn’t been structured in a way that it’s affordable, efficient, and available to a large percentage of the population. I think we’ll come onto that.

The second point, Aled’s already touched on that, is mobile phones. We all know we wouldn’t be anywhere near where we were today, but when mobile phones first came out again, and we used in early parts of the 1900s in Europe, and Germany to assist in communications, but they really only became strong in what we know them today in the last 40 or 50 years. Even so, the technologies come in leaps and bounds, but it’s still not perfect.

For those of you, I don’t know who’s got the Apple iPhone 6, but the allegation that it does bend in the pocket means that the technology is not perfect. Although it’s helped considerably, and we’re all now used to it and comfortable with that technology, it isn’t perfect. I think we know also in ODR, as we go through the day, I think we’ll have to learn from experiences, and find out actually how close we are to improving it all the time.

I always like the analogy when you’re talking about technology, we look at the medical profession. I think the advances in modern medicine have been absolutely profound over this last century. I did say earlier I’d talk about personal experiences, but my wife ruptured her cruciate ligament in the early part of the summer, and she had a full ACL reconstruction.

Spoke to the surgeon a number of times in preparing for the surgery and afterwards, and did quite a bit of research around what tools they use, and how does it actually work. I was just staggered that the amount of technology that they use, the incisions are so minute, and everything is done through very complicated … tubes, cameras, lighting systems, that the surgeon is literally operating with very high-precision equipment. A lot of it’s done remotely through cameras to see exactly where they need to be operating on.

I come from a medical family, my father’s a psychiatrist, he’s in his 90s, and I know how sceptical he was growing up as a medical practitioner, completely shunning all these modern advances about how to deal with technology in the treatment of medicine. I think everyone who’s been exposed to modern medicine, including unfortunately Lord Justice Briggs, will just recognise how fast the advances have made in medicine.

That’s not at the expense of the medical practitioners. I think that’s a very important message for us as mediators. What we’re talking about is not making you redundant, I think was a word Aled used. It’s how can technology actually assist to make the professional service which you do, even more efficient? Medicine is a great analogy, in my opinion, for how that works.

Another one, which always is slightly controversial, but is the role of drones in unmanned aerial vehicles, which are playing an increasingly significant part in the way of defence internationally. This one is a Canadian drone called the, if I look at my notes, the Polar Hawk, and it deals with a lot of surveillance issues, in the huge ways of the Canadian airspace, and waters of North America. It plays an invaluable role in feeding back accurate information to search and rescue, environmental, humanitarian organisations, dealing with issues, which really could be impossible for humans to do that.

That particular drone can fly for 33 hours, and cover 13,000 miles on a single flight, with a controller sitting centrally in an office, not exposed to any form of the surveillance activity, which is going to. Again, like medicine, the role of technology there in actually helping better decisions to be made by people on the ground.

I think we read in the newspapers daily about the ongoing battles in Iraq, in Syria, about how drones are playing an important role in trying to make sure any deployment of defence equipment is as efficient and as accurate as possible. There is a moral issue to that, a lot of people don’t agree with it, they say it’s not right that technology should be used in that way, but it is there, it is being used, and it is playing a role. I think it’s just an important analogy, which I thought was in some way, we could learn from in terms of the mediation side.

We’ve had a quick look about … Aled touched on some of the background to ODR. In terms of the real journey through time is which I’ve been asked to speak about, the link between ODR and computerisation, is really been fundamental. That’s really what I’m going to focus on.

The advent of computers really has been around for a long time. The abacus was a very first one, many, many centuries ago, but the main advances in computerisation were really since the early ’70s, when the first email was sent. The first computers, as Aled said, with the … Was probably in the ’70s and ’80s, with the massive computers, and big underground sealed units with big air conditioning systems, very clunky, very slow.

The reason for the computerisation was really looking at ways to try and make data more accessible, how could data be managed more effectively? That leapfrogged quite quickly into the advent of the world wide web, which emerged in probably the early ’80s in different forms and different iterations. That was really by a number of computer scientists in Switzerland, who were looking at ways in which trying to make data more accessible, how could data be shared more effectively between professionals who were wanting to learn from different research, and different experiences?

That was the real start of what ODR was going to stand for. I think the one analogy I will make, is looking at the role of the world wide web in two phases. The first one was really Web 1.0, which was very much the earliest form of websites, which just had a really simple model of saying, “How can we display data about the particularly information our company, or our business has, which we want to tell the rest of the world about?”

It is very much orientated around a business, a university, a research project, where the owner or controller of the website was responsible for the data, responsible for the reputation of the brand, responsible for the content. That was quite different to what we talked about with Aled a moment ago, the Web 2.0 emergence, which was a bit later in the 1990s, which was really the emergence of your social media type websites, where eBay, and Facebook, and Twitter were a classic examples of where the website is created for the purpose of conducting relationships, transactions, information, but the owners of those websites are not responsible for the conduct, or the transmission of information or product within those websites. It’s very much a user-based model.

That’s really where the emergence of e-commerce has come from. As the number of websites, and number of transactions grew over the 1990s and the 2000s, that led to a significant increase as the number of transactions take place online. There are going to be an inevitable increase in the number of disputes.

The first article, I think, relating to ODR was in 1995, 1996 by Ethan Katsh, who we’re going to hear of a bit later, and Aled’s already touched on his work. It was really orientated around trying to find a way, trying to say, “Look, this world wide web is growing at an exponential rate, how are we going to be able to deal with the disputes in a more effective way than the ordinary legal system is able to cope with?” It’s a completely different environment, a completely different way of working.

There was a lot of early development work set up by the National Centre for Automated Information Research, and a number of projects driven by Massachusetts University, and Harvard University in the US, spending a lot of money, a lot of time, trying to say, “Well, how are we going to deal with … How are we going to manage this emergence of disputes, in this really exciting stage of development of e-commerce, of transactions online?” That was really the key start of ODR as we know it today.

In researching for the talk today, I had a look at the number of domain names which have been registered, the number of active websites, with are up. It was the first domain name was registered in 1985, and in 1990, there are about 7,800 domain names registered worldwide. That was only what? 24 years ago. Now there are over 250 million domain name entities registered, each of those with a huge volume of information, of data, of traffic, of relationships, of transactions. How many of them, as Aled said, relate to potential for disputes? I think there’s a huge amount of potential for that.

The next key step in terms of what actually happened in terms of the process of ODR, and how it’s got to be more established as a process today, was the development of the United Nations Economic Commission for Europe, which set up a number of forums to deal with ODR and its development across jurisdictions and across the globe. They soon realised that there would be a lot of activity across international boundaries dealing with ODR. The forum has now held events on every single continent across the globe, dealing with this issue of, “How are we going to deal with disputes, which essentially are conducted on the web, that have very different jurisdictional footprints?”

An issue which has risen in Australia, or China, or America is going to need to be handled very differently to a dispute which emerges between two trading parties in the UK for instance. It’s going to require something quite different, not least cultural and language issues. The forum has dealt with a lot of those points over the last few years.

The first one in the UK was handled by Graham Ross, from the Mediation Room, and that was done in Liverpool, and ADR Group were involved very strongly in the running and promotion of that. I think it was a really interesting event in 2007, and that spurred off a lot of interest amongst the mediation community, and the academic community, about how mediation can overlap with technology.

The other area which I’ve always found of interest, and challenging as well, is actually the overlap between mediation and the law, but also ODR and the law. I suppose some of you, the cynics in the room, it is rather ironic that Lord Justice Briggs isn’t with us today, maybe he was scared to present in front of all the mediators, but I think in the number of judges that I’ve spoken too, interestingly, are enormously supportive of mediation.

Lord Justice Neuberger has been a great advocate, Lord Justice Woolf with his reforms many years ago, which you’re all familiar with, has promoted and embedded mediation very firmly into the litigation framework, and procedures, and platforms. ODR and the way in which the courts actually operate, and how they run, could they be run more effectively using the likes of video conferencing, of some sort of ODR platform, to deal with the management of data? There’s a great number of projects where online mediation is already running in certain of the courts in the UK.

I think the judges are really working very closely with the community to try and say, “How can the different types of disputes which arise in an online transactional environment, how can the courts be more effective in the way they operate, to deal with those types of disputes?” Because the volumes are just totally different to your conventional disputes, which will normally go down the course of a conventional court hearing.

It’s unimaginable that eBay, with it’s 60 million disputes a year, I think it was in 2010, would consider that any conventional court process would be suitable for the resolution of online transactions. I think we’ll see as there’s a greater reliance on e-commerce globally, and within the United Kingdom, that there are going to have to be different ways in which ODR processes and principles can be applied.

On the question of the privatisation of justice, eBay is clearly one of the biggest players who’s spent a lot of time and money on dealing with ODR systems and system development. In 2013, I understand that they had over three billion transactions globally, and it was just marginally over 60 million of those were disputes which were resolved between a mixture of artificial intelligence, very much a process, a triage system, to deal with the resolution of the case through to the active involvement of an online mediator.

One of the very early companies involved in dealing with the resolution of cases through eBay was the SquareTrade Company. I think Graham Ross is certain very aware of that, and has been involved in that company. It’s a process where the role of the mediator was very central to it. It wasn’t majority done on an artificial basis, so the mediators had no reason to feel that they were being shut out of the process. They were dealing with between 40 and 60 cases at any one time.

In terms of the further privatisation of ODR, there are a huge number of organisations. It’s quite difficult to put an accurate figure on the exact number, but it’s probably well into the hundreds of different organisations, which have different forms of ODR processes and procedures in place. I wanted to just finish by talking a little bit about ODR 2014.

I know Ethan … Aled asked me just to cover that, but in the end of July this year in San Francisco, there was a very large conference organised by Colin Rule and Ethan Katsh, and hosted by Stanford University, and it was a real gathering of all the world’s great pioneers and advocates of online dispute resolution. I think what is really telling for me attending that, was the real seriousness with which the major internet based companies in Silicon Valley are now viewing ODR. There were representatives there from Google, from Facebook, from AAA, the American Bar Association, they were all there, actively engaging, and saying, “What is this process? We’ve heard about it for the last 10 or 15 years, how is it actively going to make a difference to us?”

It was quite eye opening to hear the level of sophistication which some of the projects that were discussed. One of them, if I can just briefly mention that to you, is a platform which is run by Modria, which is a US-based software as a service company, which I’m very proud to be involved with as well, and they set up for the American Arbitration Association in New York, a completely, fully-managed online dispute resolution system for the no-fault claims insurance market in New York. They deal with a huge number of … in excess of 100,000 disputes through ODR, where there are primarily insurance based claims on a no-fault liability basis.

There are also similar experiences for the resolution of all the claims arising out of Hurricane Katrina, and the various large-scale catastrophes in the US, where large volumes of cases traditionally would go directly through the legal process, but online technology was being made to work very, very effectively.

Aled also spoke about the use of online technologies in divorce cases. There were a large number of companies just sharing their wisdom and experience about how the role of platforms in technology can help even in something which many of you would say, “Look, it’s not really right that mediation in an online forum should be used to resolve something as personal as a divorce.” The notion is quite significant.

Really, in closing, I think the role of ODR has developed quite significantly. There are a number of large players in the market. It’s still got some way to go. I think one slide I just wanted to quickly touch on, was in relation to the financial data surrounding the recent IPO of Alibaba, which is the Chinese equivalent of eBay, which is absolutely massive, and has a … The number of transactions and figures … I don’t know how clear that is to see, but they compared against the United States in 2013. There is a pretty much a crossover of about 250 billion transactions going through e-commerce platforms, but the forecast is vastly exponential in the context of China and Alibaba, as the main e-commerce platform.

I think it just shows that the emergence of the world wide web, and how this is actually going to impact on opportunities for the mediation profession is absolutely huge. This is definitely a ship which is going to be going forward. If we look at all our local, major retailers in the UK, I’m not sure how many of those have all got access to direct ODR systems, and I know Professor Cortes is coming to speak to us about the legal framework for ODR and the European legislation, after me, and he’s going to set the context of what organisations are going to have to be thinking of.

These are high street brands, high street names which you all are very, very familiar with. In terms of the journey, a bit of overlap with what Aled had covered. It’s been a full storm in many respects, for many people. I’ve spoken and met with a number of mediators, a number of online dispute resolution organisations, everyone’s hoping that it will finally take place, it will finally gain sufficient momentum.

I do believe that there is a sufficient collective momentum of organisations and professionals who are committed to seeing how mediation, and online dispute resolution processes can combine to continue to work along the notion that it’s all about the negotiation of a settlement, and it’s not an imposed legal decision. Thank you very much.

About the mediator

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Mike is an Internationally recognised authority on mediation and dispute resolution. He started his career as lawyer in South Africa in the mid nineties, came to the UK shortly after that and joined the department of trade and industry as a insolvency and corporate recovery lawyer. It wasn’t long after that he left his legal career to leaving join one of Europe’s leading specialist providers of mediation and dispute management services where ... View Mediator

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