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Changing landscapes: The impact of ODR technology on UK dispute resolution

In 1943, Thomas Watson, then president of IBM, is said to have opined, “I think there is a world market for maybe five computers.” It’s very possible that you can now find five examples in your own living space, considering that, sitting at home last night, I had my smartphone pocketed, my tablet streaming television programmes, my personal laptop flashing emails, my MP3 player charging and my work computer propped open.

Importantly, the legal profession is not immune from developments in modern technology; online dispute resolution (ODR) technology is expanding as a medium for dispute resolution in the UK. With this in mind, Thomson Reuters, with the involvement of Spinnaker Research, talked to 40 people, including lawyers, academics, ombudsmen, regulators, judges, mediators, and technology providers, to assess the impact of ODR technologies, and presented its findings in a spring 2016 report entitled, “The Impact of ODR Technology on Dispute Resolution in the UK“. Interviews were based predominantly in the UK, although some insights were provided by those working across Europe and in the USA.

Introduction

The report identifies that the ability to manage disputes and administer justice online has clear relevance for four professional groups in particular:

  • The courts service.
  • Regulators and ombudsmen.
  • Private mediators.
  • Consumer businesses.

The report suggests that ODR has huge potential to reduce fixed and operating costs for these four groups, as each is struggling with an increased volume of disputes and pressure to resolve them quickly. The aim of ODR should be to improve access to justice and opportunity for redress as well as ensuring proportionality and timeliness of resolution.

The spectrum of ODR technologies

Informed by the perspectives of interviewees, two discernible attitudes to technology in dispute resolution were identified:

  • Using technology to support or enable existing manual processes of administering dispute resolution, including the incremental improvement, efficiency gained or value added in existing legal or negotiating dynamics.
  • Using the technology to re-engineer fundamentally the dispute resolution process, delivering resolution in new ways.

A number of examples were highlighted, including blind bidding, drafting collaboration, automated negotiation, customised systems, virtual mediation rooms and technologies, arbitration systems, online case initiation, online courts (for which, see the on-going debate surrounding Briggs LJ’s proposals), and agreement monitoring.

Where ODR technologies are making an impact

The report sets out the comments of a range of professionals, which describe different attitudes towards the use of ODR technologies.

Firstly, business representatives stressed that ODR assists in avoiding litigation and reputation damage. Furthermore, ODR would allow all businesses to manage proactively and prevent disputes by spotting weaknesses in services or supply chains through management information. The range of applications mirrors the vast spectrum of business models, according to the report, and it would appear that businesses that focus on internet/distance transactions or efficient markets are natural adopters of ODR systems.

Secondly, alternative dispute resolution (ADR) providers and lawyers reckon that ODR drives efficiency and may ease pain points from working in different time zones and languages. Such opinion was informed by people with experience in relatively low-value cases and in large, complex, cross-border disputes, which often involve businesses and governments. Given that ADR in the UK “represents fertile ground” for ODR adoption, new technology investment is best aimed at dealing with high volumes of low-level cases, while in high-level, complex or long-running cases, face-to-face low-tech resolution remains the best route. ODR needn’t be complicated, with video-conferencing singled out as a simple example of advancing dispute matters.

Thirdly, ombudsmen and regulators would benefit from increased use of ODR. At present, they deal with large volumes of disputes; ODR would drive demonstrable efficiencies and could accelerate resolution of disputes.

Finally, the courts service is concerned with improvements to access to justice, better user experiences and costs savings. The Briggs interim report highlights the attention such matters have been receiving, and interviewees remarked that ODR technologies have already been adopted in pockets across the system, where clear drivers exist. Two such examples are the Money Claim Online system and, in the criminal sphere, videoconferencing in bail applications (which reduces logistics costs).

Impacts for the user

The report sets out that ODR technologies change fundamentally the experience of people in resolving disputes. Interviewees argued that systems need to be designed for maximum effectiveness. In particular:

  • User experience. For ODR to be effective, it requires investment in a well-designed and user-focused system.
  • Integrity of the system. Adequate safeguards are needed for online systems, including high standards of privacy and data security.
  • Face-to-face versus virtual resolution. It is important to achieve the right balance between face-to-face and virtual methods, depending on context.
  • Emotional experience. To increase user satisfaction and encourage greater adoption, ODR systems should be sensitive to emotional aspects of disputes.
  • Speed of the system. Appropriate application of ODR technologies is speeding up the resolution of disputes.

Impacts for the adopter

Adopters must make informed decisions. Interviewees discussed the benefits of ODR, and commented on the required investment of time and resources. Interestingly, common themes emerged across the public/private spectrum, as four key points were stressed:

  • Efficiency benefits. Interviewees were of the opinion that ODR improves efficiency, and highlighted the factors of speed, timeliness, provision of correct information, the proportionality of approaches and the management of information.
  • Workforce impacts. ODR adopters will need to consider the changing skill set required of people in the process of dispute resolution, in addition to taking into account the possible need of changing the types of people involved.
  • Selecting technology. According to their needs, those who adopt ODR will need to select from a variety of ODR technology applications.
  • Adoption and transformation. Considerations should include the external adoption factors, such as whether ODR makes it easier to mandate ADR, and whether effective internal transformation plans are in place.

Changing the landscape of dispute resolution

The report concludes by illustrating an ODR technology market in flux. There are different impacts to greater or lesser extents across the dispute resolution spectrum. A significant number of practitioners and judges may convince themselves that they are allergic to technology, as it creeps steadily into the legal sphere, but the report concludes on an optimistic note: if ODR proves to be more adaptable and better suited to the needs of a mobile, connected and global society than more traditional methods, it “presents a powerful motive for the migration of civil disputes”. The report also cautions that the extent of migration depends on other factors, such as enforceability, attitudes to culture and tradition, and the willingness of institutions and governments to pay for modern, central dispute resolution. However, just as those electronic items at home have unlocked a world of better communication, news and access to entertainment, so too could ODR technologies create environments that enhance the models of dispute resolution.

Practical Law Dispute Resolution Jack Meek

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