The future of mediation- online dispute resolution (ODR)



At this year’s Singapore Mediation Lecture, we were given insights into the future of mediation, and the advances in ODR achieved internationally. ODR is simply the use of information and communications technology to help parties resolve their disputes. Mr Colin Rule, previously the director of ODR at eBay and PayPal, now co-founder and Chief Operating Officer of Modria.com, an ODR provider based in Silicon Valley, shared his experiences with us.

eBay has 250 million users worldwide and receives 60 million disputes each year. These cross-border disputes range from dissatisfied customers, undelivered items to payment disputes. To deal with these high volume, low value disputes (on average, US$75), eBay built redress processes directly into user agreements with an online Resolution Center. Through the software, 50% of these disputes were resolved amicably through “conversations” between the buyer and the seller “at” the Resolution Center. Of these disputes, 90% were resolved using the software algorithm only i.e. no human intervention was involved. These resolutions are extra-judicial, meaning parties can resort to the courts if dissatisfied. However, 99.99% of parties do not, simply because of the low value and complex multi-jurisdictional nature of the claims. eBay found that users who had resolved their disputes actually increased their activity on eBay faster than those who never had a dispute - more loyalty was enjoyed from someone whose problem had been solved in a fast and fair way. Users would also rather lose their disputes quickly than win but take a long time to resolve their disputes (12 days in eBay’s terms).

For such disputes, legal systems are unable to compete as users are demanding fast one-click resolutions. The number one area for ODR is e-commerce. Other examples of ODR already in place or being developed are:

  • USA online property tax assessment appeals
  • New York’s no-fault insurance process (disagreements about reimbursements in motor accidents)
  • Consumer protection schemes - UK’s Civil Aviation Authority process (disputes between travellers and the airline) and EU’s ODR platform
  • UK’s Her Majesty’s Online Court (to resolve all civil disputes less than £25,000) and British Columbia’s Civil Resolution Tribunal
  • Separation and divorces – Netherlands’ Rechtwijzer and UK’s Relate

Technology is transforming the way people communicate with each other and resolve disputes. The tools created for low value high volume e-commerce cases will gradually move up the value chain to higher dollar value cases. The mediation landscape will continue to evolve with these exciting developments.

To view an abridged version of the lecture, please click here to watch.

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