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Crowdsourced Online Dispute Resolution

The online world has been greatly affected by the rise of social media, whose principal characteristic is interactivity among the users of a particular service or communication channel. The possibility of not just one-to-many but also many-to-one and many-to-many communications have put focus on ‘the crowd’ – a potentially almost infinite number of Internet users who may participate in a conversation in a number of roles.

This has led to the emergence of the term ‘crowdsourcing‘, meaning an express solicitation of Internet users generally to contribute to solving a problem. No doubt the popularity of the term has been assisted by the impact of James Surowiecki’s book The Wisdom of Crowds .

This note describes two recent initiatives in resolving disputes online through what their creators call crowdsourcing, though they make quite different appeals to ‘the crowd’.

1. ODR Exchange

The first of the two is the ODR Exchange, based in Prague. It is designed to be a technological and process-based framework on which dispute resolution service providers can build facilities that would be offered to buyers and sellers engaged in cross-border electronic commerce. ODRExchange will not itself resolve disputes. It offers templates for making basic types of claims in consumer transactions, responding to them, and making decisions, especially in consumer transactions. These templates are to be adopted and adapted by service providers around the world.

ODR Exchange hopes in this way to enable disputants and those who offer them services – mediators and arbitrators, platform builders, consumer agencies, and so on – to build and participate in dispute resolution systems around the word that will resolve differences in an economical and efficient manner. The aim is to build the necessary degrees of trust to enable people to make online deals across national borders. All processes and protocols will be open system to provide maximum flexibility in their application.

The appeal to the ‘crowd’ in this model is to bring together the diverse interests, each for its own motives, that will provide all the different functionalities needed for a self-sustaining system. The result will be not a single big global player (the ODR Exchange does not aspire to that status) but ‘a wide group of interconnected private, public and semi-private entities around the world.’ The ODR Exchange will provide the initial documentation and protocols – the ‘backbone technology’ – and assemble the initial group of stakeholders and do what it can to encourage the model to propagate itself onto a global scale.

Success will depend on ‘massive’ participation by online sellers. They might have an incentive to join and comply by being allowed to use an ODR ‘trustmark’ to certify to potential customers that they are subject to this fair and efficient process. Consumer agencies might administer the trustmark and ensure that participating merchants complied with their obligations. Naming and shaming is one of the key measures for enforcement. Merchants approved by the system and bearing the trustmark should be able to count on increased cross-border business that would justify the cost of compliance.

The concepts themselves are kept as simple as possible, with diagrams, icons and flow-charts to assist in understanding the role of each instruction. This means restricting legal problems to the basics – but basics that probably cover over 80% of all consumer disputes: were the goods or services delivered, were they the right ones, did they meet expectations? And on the other side, did the customer pay, or meet other obligations to return defective goods? A layout of the concepts and processes in action is available here. The ODR exchange says that so far in its (quite extensive) research, it has not encountered different legal rules for these simple situations.’ These simple cases are resolved in the same or very similar manner all over the world’. As a result the choice of law becomes much less important to the resolution.

It is anticipated that all the content can be made available in multiple languages. Since each part of the template is constant, its content can be used in different languages by each party to a dispute. A change to part of the master text will cascade through the system to change each language version in a consistent way. Thus parties in different countries can have confidence that they can go behind the promotional website in their language if they need to pursue a remedy against the foreign merchant that uses another language at home..

The system is designed to work with the forthcoming UNCITRAL ODR Rules that may be adopted in the November 2012 session of the the ODR Working Group. The founder of the ODR Exchange, Zbynek Loebl, has been actively promoting a global consensus on those Rules. His innovative technology, in the hands of the crowd, may be able to answer some of the practical questions that UNCITRAL has been raising.

2. eQuibbly

On a different scale, a new ODR service based in Toronto (though apparently aimed at at least a North American market) aims to solve particular disputes through ‘crowd-sourced’ mediations, as well as more traditional (though online) arbitrations. eQuibbly allows people to describe their disputes on the site and invites the other side to give their perspective. The processes for all types of dispute resolution are set out in videos on the site. Then users of the site can say what they think should happen.

The site puts it this way:

As a collective, you trust your friends and neighbors to provide you with accurate and useful information every time you look something up on Wikipedia and TripAdvisor, and to make the appropriate decision when choosing your government, which controls so many aspects of your life. So why not have them help you resolve your disputes?

The resolution of public disputes will not be binding, as the public is standing in the role of a mediator, who does not have the power to bind, only to suggest. Disputes may be conducted privately, with participation from those chosen by the parties. These may be non-binding as well, serving as a kind of neutral evaluation, or binding. If they are binding, they are for legal purposes arbitrations subject to the applicable law. One sees this at the eQuibbly site, whose arbitration rules are long and fairly technical, unlike the chatty text on the rest of the site.

All the services of the site are free. The business model is not clear from the site itself. While crowd-sourcing the mediators is clearly inexpensive, the site itself is well presented, and maintaining and providing access to the disputes and comments uses bandwidth that one normally has to pay for. Whether good arbitrators will be willing to work for nothing is not clear. It may be that the web site is free, including the communication among the parties and with the arbitrators, but the arbitrators that the parties invite agree to participate only for compensation.

According to the founder of the site, Lance Soskin, in the future some parts of the service will eventually be offered for money, while the crowd-sourced public disputes will be left as a free ‘attraction’ to the site, and as a service for the disputants who benefit from those discussions.

At present data are not available as to the use made of the site for private, especially binding, resolutions. A number of public disputes are available for review on the site.

What next?

These ODR systems are only two of what will no doubt become many appeals to the crowd to resolve disputes. Whether the crowd will turn out to be wise in these cases, time will tell.

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Comments

  1. John,

    Interesting article.

    I would like to clarify something about eQuibbly:
    The private arbitration/mediation platform is free. It’s up to the user as to whether they can find arbitrators/mediators offering services for free (such as friends or associates or their board of advisors if it’s a business dispute). Independent arbitrators and mediators do post their professional bios on my site and can be hired by users of the site – their fees are clearly displayed ( http://www.equibbly.com/professionals ). eQuibbly does not make any money from this. The parties only pay for the services of the arbitrator/mediator – not for use of the online dispute resolution platform (parties pay directly to the neutral). Although some arbitrators/mediators may offer free services as a way to introduce themselves to ODR if they haven’t conducted Dispute Resolution online before.

  2. Thanks for the clarification, Lance. The business model for a consumer-friendly (or small-business-friendly) ODR system has always been one of the main challenges (along with applicable law and enforcement of results), so this is useful information.

  3. EQubibbly has now announced the end of its crowd-sourced dispute resolution, though it continues its other services.