A new automated class of online dispute resolution: changing the meaning of computer-mediated communication.

• Author: Farned, Dusty Bates

INTRODUCTION

Alternative Dispute Resolution (ADR) professionals, especially those specializing in Labor, have long dealt with the issue of automation. (1) The rapid rise of a new class of Online Dispute Resolution (ODR), ironically having its roots in the labor field, may soon threaten the ADR profession. (2) Laura Calloway of the Alabama State Bar chaired the 23rd Annual ABA Techshow in Chicago. Calloway stated, "the show continues to grow because technology continues to both grow and change." (3) Referencing the rise of ODR in complex areas such as family law, keynote speaker Richard Susskind advised attendees to retool lest they be swept completely off the map. (4) "When the [economic] storm lifts," Susskind predicted, "the terrain is going to look wildly different." (5)

ODR has a tremendous affect on the real world; the converse is less clear. In spite of economic turbulence, ODR is automating at a rapid pace. Much consideration has been given to the future of this young area. However, while ODR is multidisciplinary, very few ODR enquiries have originated from communication scholars. Moreover, little Computer-Mediated Communication (CMC) scholarship filters down to the legal and ADR communities. This article briefly surveys the literature regarding ODR and CMC, and hypothesizes about what is not being addressed; specifically, how humans in conflict are to successfully negotiate with non-human mediators.

NEW CONCEPTS AND CONFLICTS

One indisputably grand theme of the first decade of the twenty-first century has been Information Technology (IT). For better or worse, IT seems to be here for the duration. In 1995, "cashiers [we]re the third-largest clerical group after secretaries and bookkeepers." (6) In 2005, the Boston Globe published an article I authored concerning how consumers should refuse to use self-checkout lines to help protect these often overlooked members of the working class] I doubt my diminutive efforts are the reason a skeletal crew of cashiers still exist. Instead, it is probably a testament to the worst economy since the Great Depression. When global recession was officially declared, ailing businesses probably found laborsaving technologies ever so attractive. However, because of the costs, most businesses lacked the capital to pursue this venture.

Not surprisingly, utility companies, which are commonly considered among safer bets in a depressed stock market, have continued to automate billing mechanics, such as meter reading. Equally unsurprising is that two other large industries, which have been able to continue automation, were big recipients of historic levels of federal subsidies. Overpaid bank executives, for instance, recalled that between 1983 and 1993 they were able to eliminate thirty-seven percent of bank workers through the use of the Automated Teller Machine (ATM). (8) Now, nearly everything one would ever need from a bank can be done by an ATM or a personal computer. And, airlines, which have faced terrorist attacks, mass union strikes, drunk pilots, and sky rocketing jet fuel prices in the last decade, not only began charging extra for luggage and snacks, but now force you to check yourself in.

Academia demonstrates a similar track. Facing difficult financial times, there has been a push towards online education. In fact, the field of online degree programs has expanded to highly selective universities including, but not limited to, Cornell, Dartmouth, George Washington, Northwestern, Southern California, and Vanderbilt. Advantages for the students include savings in time and travel. These same advantages are promoted to disputants considering ODR. (9)

At first glance, automation may not seem bad. The professor displaced by their own recorded tutorials will be remembered as younger looking, and a portion of their old salary will be welcomed by a technician responsible for uploading that lecture to the Internet. It has been argued that expertise prevents "the Internet from causing a 'revolution' in law or medicine, or in electrical contracting for that matter." (10) Yet, like online education, ODR illustrates that it is no longer just lower-skill jobs which are threatened by automation, (11) but highly-trained professional ones as well. (12)

HISTORY AND CLASSIFICATION OF ODR

Until recently, ODR did not have an agreed upon name. Suggestions included, Electronic Dispute Resolution (EDR), Internet Dispute Resolution (IDR), Online Alternative Dispute Resolution (OADR), and Online Dispute Resolution (ODR). (13) While most now seem settled on ODR, defining the relatively young, yet rapidly changing field has proven more challenging. (14) Rather than a linguistic definition, perhaps ODR can be most precisely described by a classification scheme. The following classes are in the order by which they came appeared online.

ODR Classification I

Originally ODR was self-contained. (15) That is, resolution in the form of negotiation, facilitation, mediation, arbitration, or some combination thereof, was attempted online for disputes arising online. The watermark year for this classification is considered 1996. (16) Perhaps no better example of Class I ODR exists than eBay.

Most would agree that eBay was a pioneer in online consumer-based negotiation. However, it was also a pioneer in ODR. In 1999, the National Center for Information Technology and Dispute Resolution (NCTDR) at the University of Massachusetts Amherst (17) conducted a pilot project for eBay users which "handled two hundred disputes in a two week period and prompted eBay to include dispute resolution as an option for buyers and sellers ..." (18) This gave rise to SquareTrade, the first dominator in the ODR market. (19)

By 2006, depending on who was counting or how they were counting (perhaps disputes versus resolutions) SquareTrade handled anywhere from "two million disputes (20) to "almost six million disputes." (21) Another ODR provider, Cybersettle, by their own count processed some 150,000 conflicts in roughly the same time period, totaling more than $1 billion in settlements. (22) For the curious, that is an average case value of roughly $6,666.66. Nevertheless, until SquareTrade got out of the ODR business in 2008, it was hard to beat. According to the company, "the SquareTrade Seal is still widely regarded as the single most trusted icon on eBay." (23) SquareTrade also serviced Yahoo!, Google, the California Association of Realtors, and the Federal Trade Commission. (24)

ODR Classification II

In 1998, less than a year out of law school and only months prior to becoming deputy director of the Harvard Negotiation Research Project, Robert C. Bordone predicted "in an ideal world, the dispute resolution model of Cyberspace may become so attractive that real world disputants might be moved to take their disputes online for resolution." (25) It is important to note, as a revelation of our ever changing Internet, Bordone still referred to the World Wide Web as "the Web worldwide" (26) and his Westlaw search only revealed 122 federal cases "related to Cyberspace." (27) Nonetheless, the idea ODR would encompass offline disputes, soon came true.

Again, eBay deserves some pioneering credit. In 2002, Colin Rule, director of ODR for eBay and PayPal, wrote the book on Online Dispute Resolution for Business. (28) In reviewing Rule's book, one Tulane law professor noted "the primary audience is neither the practitioner of dispute resolution nor the student of this discipline [but] managers, CEO's, general counsel, human resources personnel, labor lawyers, union representatives, and others in a business setting." (29) Hearing no objections from the audience, the virtual and real worlds became one and Class II ODR was born.

In 2003, the American Arbitration Association (AAA) invited the Labor community to Webfile. (30) According to an AAA executive, "not only can a[n] union representative or attorney using AAA Webfile easily track multiple ongoing cases at various stages, but the service allows them to expedite the process significantly." (31) Moreover, "though only one case was filed that year, by 2005 labor case filings had increased to 193" and subsequently became the second highest type of dispute using AAA's new online service. (32)

Also in 2005, AAA added to Webfile what it termed Rapid Alternative Dispute Resolution (R-ADR), "allowing the parties to conduct much of their mediation and arbitration processes online." (33) By 2006, AAA had also partnered with Cybersettle whereby users could opt for offline resolution with the AAA, and AAA users in turn could "opt for Cybersettle's double-blind bidding algorithmic process...." (34) The same year, two of ODR's strongest supporters recognized "while the ideas motivating early interest in ODR have been quite accurate, the context in which ODR is employed is quite different from the context a decade ago." (35)

ODR Classification III

Algorithmic processes, like that employed by Cybersettle, are an excellent representation of the final classification. Class III ODR is closely related to Class II, but different in at least one significant regard. Here, disputes are handled online regardless of where they arise, but without much, if any, human assistance. (36) In fact, "the most salient difference among their level of automation." (37) SquareTrade's early resilience was undoubtedly due in part to automated technology; first attempts at resolution were free-of-charge, because parties attempted "to reach an agreement by communicating directly with each other through SquareTrade's Direct Negotiation tool, which [wa]s a completely automated web-based communications tool." (38)

By 2006, many negotiation systems existed which "render[ed] expert advice or decision-making on cases where to date human intelligence has been required to process the factual information." (39) One scholar argued "direct negotiation technology is a much more efficient means for resolving simple disputes...