Online Dispute Resolution 1

Online Dispute Resolution

Enas Qutieshat
Faculty of Law
Philadelphia University
Tel +962775066080
e.qutieshat@gmail.com
Online Dispute Resolution 2

Abstract
The advancement of technology has brought about changes in all the sectors
including dispute resolution. The ability of people to transact online without
necessarily having face-to-face interactions has increased the number of existing
disputes and brought about challenges about the effectiveness of the traditional
dispute resolution channels. It has led to the introduction of an alternative dispute
resolution landscape popularly referred to as online dispute resolution. It has been
seen as an effective way of resolving disputes mainly because it has fewer
physical, psychological, and even professional barriers. It allows for transparency
and creates convenience regarding distance and time for the two parties involved
in a dispute to resolve their case amicably. In this article, it contains the definition
of online dispute resolution, classifications, legal framework and regulations of
ODR, mechanisms of ODR, different types of ODR processes, and the advantages
and disadvantages of using this platform to resolve disputes. In essence, it
explores and discusses different aspects of the ODR.
Keywords: online transaction, disputes, mediation, arbitration

1. Online Dispute Resolution: Basic Definition

Online Dispute Resolution (ODR) is defined as an application of information and
communications technology to facilitate the prevention, management, and
resolution of disputes. It normally applies the alternative dispute resolution
processes to resolve a claim or dispute. ODR can be used to resolve both the
disputes that may arise online such as from e-commerce transactions or of-line
disputes-these are any form of disputes that do not involve the internet. It is
important to point out that dispute resolution is considered to be an alternative to
the traditional legal process that involves mainly people going to a court and,
presenting their issues to a judge or jury to settle a dispute1. In order for an online
dispute to exist, there needs to be a claimant (this is the party that is initiating the
ODR proceedings), the respondent (the party who has been provided with the
claimant’s notice), and a neutral (this is an individual or a party that is involved in
either settling or resolving a dispute). It is important to point out that ODR
normally requires a technology-based intermediary, meaning that, it cannot be
classified as an ODR proceeding if it only involves the parties to a dispute and a
neutral.

1
Sankalp Jain, "Online Dispute Resolution: Mechanism, Modus Operandi and Role of
Government," SSRN Electronic Journal, 2015, 18-21, doi:10.2139/ssrn.2779901.
Online Dispute Resolution 3

There are different dispute classifications for ODR. The first type of dispute
classification is Business to Business (B2B). The dispute normally involves two
parties that have a conflict about a specific transaction, and they are deliberating
on how they can solve it. The involved parties are more experienced, and
therefore, there is less concern about party vulnerability. In this case, great
emphasis is normally placed on the expertise and also the convenience of the
process. In this type of case, they normally use arbitration. The second type of
dispute classification is Business to Consumer B2C) disputes. There has been a
rise of B2C cases due to an increase in online transactions. These types of
disputes tend to involve little amount of money, however they tend to be large in
terms of the number of cases involved, and there is unequal bargaining power
between the involved parties. However, it may be able to address the issues that
customers have or feel need to be addressed by the involved businesses by
offering due process rights. There is also the Consumer to Consumer (C2C)
disputes2. They normally involve transactions that involve two customers, and
such cases are increasingly becoming common and there various websites such as
eBay and Craiglist that act as facilitators between these two parties. It is important
to note that, these websites that act as facilitators are not an actual party to the
dispute involved.

2. Legal Framework and Regulations about ODR

The current legal framework for online arbitration is provided by different areas
of regulation. There are institutional rules, private contractual agreements, regime
of international commercial arbitration consisting of international conventions,
bilateral treaties, UNCITRAL Model Law, and national arbitration laws. In 2010,
UNCITRAL began developing rules and laws about future global cross-border
ODR to solve disputes that may arise from e-commerce transactions. The ODR
rules that were established included the provision of guidelines for ODR
providers and neutrals, the criteria that will be used for the accreditation process
of the ODR providers and neutrals, the substantive legal principles that will be
used when deciding various cases, and the enforcement protocols. It is important
to point out that; no specific body or regulation governs ODR explicitly, and
therefore it can be described as a self-regulation body.
Therefore, the admissibility of the online dispute method will mainly rely on the
admissibility of an electronic document, and also electronic procedures. This
means that the acceptance of the use of information technology will have to be

2
Ethan Katsh, "Online Dispute Resolution: Some Implications for the Emergence of Law in
Cyberspace1," International Review of Law, Computers & Technology 21, no. 2 (2007): 97-107,
doi:10.1080/13600860701492096
Online Dispute Resolution 4

familiarized for ODR to be considered admissible3. It is important to the point that

the lack of an organ such a government or legal entity to regulate ODR, ultimately
hampers its overall growth and development. Some countries lack the legislative
instruments about ODR and therefore do not have a legal infrastructure to govern
e-commerce. Therefore, the binding nature of ODR is dependent on the usage of
the provider. The providers normally declare that they are providing either
binding or non-binding arbitration.
2.1 Reasons as to why ODR Began to be Used
ODR began to be commonly used in the mid-1990s, mainly as a response to the
disputes that were arising due to the expansion of e-commerce. During that
period, the internet was being used for other activities other than accessing or
sharing information. People began to use the internet for commercial purposes-
conducting financial transactions, and developing business relationships. The
online environment is designed in such a manner that relationships can easily be
formed, and also they can easily be broken, and therefore, increases the risks of
conflicts and disputes. It also became clear that the online disputes could not be
resolved using the traditional offline channels due to various factors such as
distance between the two parties ( in some cases the parties involved in a dispute
were from different states or even continents), and therefore, these disputes could
not be resolved using a face-to-face meeting. The only way that these disputes
could be resolved was through the use of an online platform or channels.
Therefore, there was the need to create new tools and resources that mainly
exploited the capabilities of digital communication and information processing
through the use of computers. The digital tools that are normally used to resolve
disputes include e-mails, and videoconferencing. ODR normally involves parties
in mediation, arbitration, and also negotiation. It is also important to point out that
the ODR process was developed to circumvent the clogged and slow-moving
court processes. It was also seen as an alternative whereby various court processes
could be solved without necessarily having to be physically present in a court to
resolve certain disputes. Today, ODR is considered to be the fastest growing area
about dispute resolution to the point that it is now being used both for offline and
higher value disputes.
2.2 Difference between Online Dispute Resolution and Parties Negotiation
For an ODR process to be conducted, there is the need for an existing system that
will be used to generate, send, receive, store, or process the communication
between disputing members in a manner that ensures there is data security. On the
other hand, in parties negotiations, it normally involves a dialogue between one or

3
Leah Wing, "Ethical Principles for Online Dispute Resolution," International Journal on Online
Dispute Resolution 3, no. 1 (2016): 12-29, doi:10.5553/ijodr/235250022016003001004.
Online Dispute Resolution 5

two parties, whose aim is to reach a beneficial over one or more issues where a
conflict exists. In this case, a beneficial outcome can be for one or all of the
parties that are involved in the process. Therefore, even though in both cases,
there are mainly two parties that are negotiating over a certain issue that has
arisen between them, in an ODR process there has to be an internet-based system
that will facilitate communication between the two parties that are involved.
2.3 Advantages of Online Dispute Resolution
ODR is gaining popularity when it comes to the resolution of e-commerce
disputes for both businesses and consumers. The following are the advantages that
have made online dispute resolution to grow in its popularity. ODR is regarded as
being less expensive in comparison to the traditional legal process, and therefore
it is cost-effective for the parties that are involved in dispute. It is seen as an
efficient method, based on the ability of the people who are involved in the
process, being in a position whereby they can resolve their disputes quickly than
when they use the traditional legal processes. It also ensures that the parties
involved in the dispute resolution are actively involved to have a partial control of
the outcome of the process. Therefore, they must work with each other throughout
the process to be in a position whereby they can resolve the dispute, and also in
some sense, control the outcome of that dispute4. Also, the ODR process is seen to
be more flexible than the traditional legal processes, and it is therefore ideal for
people who are busy; they can schedule their online meetings to when they are
available to resolve a certain issue. Furthermore, it is also considered to be
geographically flexible in that; it allows the parties involved to participate
actively and regularly still when solving an issue, even when they are in different
geographic locations. Therefore, the parties involved need not travel to solve a
case, as they can do it on an online platform.
2.4 Characteristics of ODR
ODR has the following characteristics:
• Voluntary_ In most of the ODR processes, they normally allow the parties
involved the freedom to choose whether they will choose to resolve a dispute
using this platform, or they will prefer to use other means to settle a dispute. Most
of these processes also provide the participating parties the freedom to withdraw
whenever they feel like.

4
Louis F. Del Duca, Colin Rule, and Zbynek Loebl, "Facilitating Expansion of Cross-Border E-
Commerce-Developing a Global Online Dispute Resolution System (Lessons Derived from
Existing ODR Systems - Work of the United Nations Commission on International Trade Law),"
SSRN Electronic Journal, 2011, 42-45, doi:10.2139/ssrn.1970613.
Online Dispute Resolution 6

• Informal: In comparison with other proceedings such as mediation, litigation

or even arbitration, an ODR process can be described to be a bit more relaxed,
and also informal. In most cases, the process uses an asynchronous process, and
the parties involved in this process are provided with enough time in order to
reflect on their positions in relation to the case before they can be involved in the
process of making an agreement in relation to the issue or issues they had
conflicted about.
• Confidential: The ODR is considered to be a confidential process unless the
parties that are involved in the case state that it can be non-confidential. However,
in situations whereby the federal government is considered to be a party to the
case, then the confidentiality clause, Access to Information Act and Privacy Act
need to be critically examined to determine the extent of information that will be
disclosed in the case5.
• Assisted: In some ODR processes, there is a third party involved, i.e., the
ODR Neutral. His or her role in the case is to help the parties involved in a case to
be able to settle their issues and come up with a mutually acceptable settlement.
However, it is important to point out that an ODR Neutral is only used in the
ODR processes that have a mediation or arbitration component.

3. Mechanism of Online Dispute Resolution

As it has been stated before, the purpose of the ODR process is to provide the
parties that are involved in a case an electronic technology platform to allow them
to resolve their dispute. The process can occur in ‘real time’ or may be conducted
in an asynchronous manner, which are normally determined by the rules that are
given by the ODR Provider, and the wishes of the parties involved. As has been
pointed out before, the process can be considered to be convenient and cost-
efficient in comparison to face to face meeting regarding negotiating, mediating
and also resolving existing disputes6. The ODR process can be considered to be
flexible about the agreement because the parties involved can decide to make
them broad or specific about the case. In addition to that, the enforceability of the
settlement agreement also mainly depends on the rules and also the jurisdiction of
the ODR Provider, especially if the dispute involves people from different
geographical locations and therefore can be termed as international.

5
Carrie Menkel-Meadow, "Is ODR ADR?," International Journal on Online Dispute Resolution 3,
no. 1 (2016): 4-7, doi:10.5553/ijodr/235250022016003001002.
6
Mirèze Philippe, "ODR Redress System for Consumer Disputes," International Journal of Online
Dispute Resolution 1, no. 1 (2014): 57-69, doi:10.5553/ijodr/2014001001004.
Online Dispute Resolution 7

It is important to point out that before deciding to use ODR as a means of

settling existing disputes, it is essential to look at the following factors:
• The ODR process is considered to be best suited when the case or conflict is
not complicated to deal with, and preferably the issue that the two parties are
quarreling about involves money, rather than the issues that deal with liability7.
• ODR is best suited for cases that involve only two parties.
• It is easy to solve disputes when the issues that the two parties have disagreed
on can be stated.
• It is also considered to be more effective where the factual issues do not
depend on credibility8.
• Most of the ODR processes do not allow witnesses to testify especially the
ones that involve a negotiation or mediation phase as part of solving a dispute.
Therefore, if the parties involved in a case have witnesses, then they can consider
other alternatives about the legal process to solve their cases.
• Also, if there issues about the law that is unsettled, then the case needs to be
solved using other methods as ODR may not be appropriate in such situations.

- Choose an ODR Provider

In ODR, there are situations whereby the two parties involved in a case will
choose the appropriate ODR provider in relation to the nature of their conflict. For
instance, if the two parties involved in dispute are consumers who transacted via
E-Bay, then when solving their dispute they are encouraged to use E-Bay as their
ODR provider. In cases whereby the parties involved have not managed to
identify an ODR Provider, or in circumstances whereby the parties involved are
unsure of an ODR Provider that they can use, the two parties involved are
required to select an ODR Provider. In the selection of an ODR Provider, they
should select one who is competent and also independent9. This means that the
ODR Provider should not have any form conflict of interests with the disputants,
7
Doug Leigh and Frank Fowlie, "Online Dispute Resolution (ODR) within Developing Nations: A
Qualitative Evaluation of Transfer and Impact," Laws 3, no. 1 (2014): 106-117,
doi:10.3390/laws3010106.
8
Kananke C. Liyanage, "The Regulation of Online Dispute Resolution: Effectiveness of Online
Consumer Protection Guidelines," Deakin Law Review 17, no. 2 (2013): 251,
doi:10.21153/dlr2012vol17no2art78.
9
Pablo Cortés and Arno R. Lodder, "Consumer Dispute Resolution Goes Online: Reflections on
the Evolution of European Law for Out-of-Court Redress," Maastricht Journal of European and
Comparative Law 21, no. 1 (2014): 14-38, doi:10.1177/1023263x1402100102.
Online Dispute Resolution 8

for instance, it is considered unprofessional for an ODR Provider to be involved

in solving a dispute whereby one of the parties that are involved in that case also
happens to be a client of the ODR Provider in another unrelated thing. In any
case, the ODR Provider has to present himself or herself in both an independent
and impartial manner, to ensure that there are no conflicts of interest.
- Preparation of ODR
Regarding the preparation of an ODR process, it is important to note that the
process does not have a standard format, and the rules that are used normally
depend on the ODR Provider. Therefore, the parties involved in a case that is
being solved using the ODR process need to know the rules that they will have to
follow, be in a position to gather the necessary facts and documents that they will
use during the negotiation process. The ODR process will largely be dependent on
the rules that have been given by the ODR Provider, and whether it will use
negotiation, mediation or adjudication phase10. In most cases, the process will
begin by one party contacting the other party so that they can be able to resolve
the dispute. As is the case with the other dispute resolution processes, the parties
involved need to place the following into consideration:
• In a dispute resolution process, it is important to take into consideration all the
parties interests, and not their positions. For instance, the parties involved are
required to take into consideration whether they can find a solution, which will
bring about an outcome, which will be mutually beneficial for them11.
• The parties involved need to ensure that there is effective communication that
will promote a sense of understanding in the case, and help in the dispute
resolution process. Even though most of the communication between the different
parties is conducted in writing, there is the need to present the writing in a way
that the other party will not view it as confrontational.
• The parties involved have to be provided with substantial time to assess the
submissions and proposals they will use to make solutions. This means that they
will have to go through the submissions of the other party so that they can have a
better understanding of what the other party is proposing. The important thing is
for the two parties to have a better understanding of the underlying interests, and
not just their overall positions. It will assist them regarding being able to solve a

10
Leah Wing, "Ethical Principles for Online Dispute Resolution," International Journal on Online
Dispute Resolution 3, no. 1 (2016): xx, doi:10.5553/ijodr/235250022016003001004.
11
Pablo Cortés and Arno R. Lodder, "Consumer Dispute Resolution Goes Online: Reflections on
the Evolution of European Law for Out-of-Court Redress," Maastricht Journal of European and
Comparative Law 21, no. 1 (2014): 14-38, doi:10.1177/1023263x1402100102.
Online Dispute Resolution 9

case in which the involved parties will feel that they have benefitted in the
process.
• It is also important to have an understanding that there may exist language
challenges and in such scenarios it is important for the ODR Provider to be
informed early during the process in order to avoid misinterpretation of what one
party is trying to convey during the dispute resolution stage.
• The parties involved should evaluate all the proposals that are provided
during a case while using the Best Alternative to a Negotiated Agreement
(BATNA). In ODR Processes, BATNA is taken to be a standard from which any
proposed agreement ought to be measured. Therefore, the solution that is
determined through an ODR process should be considered to be superior to the
BATNA.
• It is important to identify or be aware of other alternatives besides the ODR.
The reason for this is that there are situations whereby the ODR process may fail
to be successful, and it is important for the parties involved to be aware of the
next step that they will take to resolve their dispute.

4.How does ODR operates

4.1 Automated and Assisted Negotiation

About settling disputes via the internet, two forms of negotiations exist automated
and assisted negotiation. In an automated negotiation, it normally involves a
process of blind bidding. In this case, the two parties involved need first to
determine the range or spread that they are willing to agree to settle a financial
dispute. For instance, they can agree that they will be satisfied and settle if the
offers that have been provided by the two parties are within 10% of each other12.
Then the two parties involved will then make their offers, and the system is
designed in such a way that they will be unaware of the offers that have been
provided by their opponents. As it has been stated before, if the offers are within
the agreed range, then a computer will calculate the mean value, and the dispute
will be settled for the amount of money that the computer generated based on the
calculated amount.
In situations whereby the offers provided by the two parties are outside the spread
that they had agreed about, then there will be no settlement that will be reached by
the two parties, and the computer will proceed to invite them to take a fresh round
of blind bids until they can reach a certain amount of money or range in which

Doug Leigh and Frank Fowlie, 'Online Dispute Resolution (ODR) Within Developing Nations:
12

A Qualitative Evaluation Of Transfer And Impact' (2014) 3 Laws.

Online Dispute Resolution 10

they feel that they are comfortable enough to settle. It is important to note that
automated negotiations are normally ideal for dealing with financial disputes,
especially when the amounts of money or transactions cannot be considered to be
too large. The aggrieved parties’ feel that using this platform will lead to better
results than when they go to court to resolve such an issue. The process involved
is normally simple and efficient. It is limited to disputes whereby the liability is
undisputed, and the only issue at hand is to determine the amount of money that
needs to be paid to satisfy the two parties involved in that case.
On the other hand, an assisted negotiation is considered to be more sophisticated
than the automated one because it has been designed in such a way that it can
handle all types of settlement terms, and conditions. This means that it is not only
limited or restricted to payments. In assisted negotiation, it is a process that
comprises of only two parties, without the involvement of a third neutral.
However, the process requires the assistance of a computer. The ODR Provider
avails a web communication platform, guidelines, standard forms, and advice to
the parties involved about how they should proceed about solving their case. It is
important to point out that in assisted negotiation, technology plays a primary role
about the negotiation process between the parties involved. In this case, the
technology involved to that of a mediator in a mediation process.
There are a variety of reasons as to why the negotiation process is increasingly
becoming important and popular as a means of settling disputes. The
advancement of technology means that the negotiation process between the
different parties is facilitated by the rapid means of communication that exists.
This has ensured that the negotiating parties do not necessarily have to travel for
them to hold meetings that will facilitate their process of reaching a certain
agreement. There is also the phenomenon that is popularly known as ‘trust deficit’
whereby; about legal problems that relate to trans-border trade, the parties
involved are more inclined to find legal solutions, and therefore avoid a legal
recourse. The technological tools that today exist have also made it easier for the
conflicting parties to deliberate on the issue at hand and find an amicable solution
without necessarily requiring the aid or intervention of a third party in that case.
In addition to that, today there are integrated ODR programs which have made it
possible for parties involved to add a negotiation stage that is informal before they
can proceed to the mediation or arbitration processes.

4.2. Mediation
Online mediation is less popular than offline mediation. The procedure of solving
a case using an online platform is the same as that which is used in offline
processes, except that in this case, an online platform is used in addition to the
facilitative and evaluative techniques. The parties involved will use a chat room to
Online Dispute Resolution 11

make their arguments about the case and create an environment to solve the cases.
It is important to point out that the reason why mediation is not popular is that its
environment is not regarded by many people to be conducive regarding
facilitating for a successful mediation. On the other hand, in an offline mediation
process, the human element plays a central or important role in ensuring that the
process becomes successful. Mediation is described as a private and voluntary
process whereby besides the two conflicting parties, there is a third party- a
mediator, who helps them regarding discussing and trying to resolve their
disputes. The conflicting parties are provided with an opportunity to present their
issues, evidence and argue the desired resolution. The process can be conducted
entirely via the internet using various technologies such as video conferencing
and e-mail13. The mediator may be provided with consent by the parties involved
to be able to evaluate all the parties’ rights and also suggest possible settlements;
however, he or she does not have the power to resolve the dispute in a certain
case. Only the disputing parties can resolve a dispute. The mediator’s key role is
to identify areas where the two parties are conflicting, and because of his or her
legal expertise being in a position whereby he or she can provide suggestions and
alternatives so that the conflicting parties can agree on the conflicting issues.
Online mediation has a high success rate regarding solving online disputes mainly
due to the use of an asynchronous form of communication, which ensures that the
parties involved have enough time to reflect on the responses that have been
provided by the other parties before they can react. The communication methods
that are widely used are textual and asynchronous, as the use of video-
conferencing systems in some cases may not be accessible in certain areas due to
a slow internet connection or lack of web cameras. It is also important to note
that, for some people, they prefer to text over talking to people. This will also
ensure that they can make logical decisions that will have a positive impact on the
case at hand. The mediation process provides the two parties involved in a case
with the following benefits over the other alternatives: cost, time, and even
convenience. It is important to point out that online mediation resembles offline
mediation in a variety of ways, and the only difference is normally based on the
conduct in which the proceedings of a case are undertaken.
The advantage of using mediation over other formal mechanisms to solve a
certain dispute is based on the fact that; it offers the parties involved with a
possibility to seek alternative solutions that a judicial approach may not allow. If
there is a judge or arbitrator involved in the analysis of a case, then it is highly
likely that they will focus on the past, and also the ruling or judgment will be

Aura E. Vilalta and Rosa P. Martell, "E-Commerce, ICTs and Online Dispute Resolution: Is
13

This the Beginning of a New Professional Profile?," International Journal on Online Dispute
Resolution 2, no. 2 (2015): 18-25, doi:10.5553/ijodr/235250022015002002002.
Online Dispute Resolution 12

made about the rights of the parties involved. However, a mediator will take into
consideration, a broad set of factors such as the interests of the parties involved in
a certain dispute, and how the solution that is achieved on a certain occasion will
impact their ( the parties disputing) in future.
After the dispute resolution process has been completed, the mediator has to write
a report showing the success or failure of the process. In situations where it can be
categorized as a failure, although the parties have returned to where they initially
started, they are better informed about each other’s position. In situations where
the two parties resolve their dispute, the transactional agreement is acknowledged
by the parties involved as being contract binding, and it, therefore, opens the way
for ordinary recourse in case there was a violation. It is important to note that in
some countries that use civil law, this agreement is considered to be a transaction,
which is considered to be a special contract that can be used to resolve a certain
dispute and can be passed as a legal judgment. However, it is also important to
take into consideration that transactional agreements are not recognized
universally, even though there have been considerable efforts that have been
conducted by the United Nations Commission on International Trade Law
(UNCITRAL) regarding ensuring the transactional agreement is universally
recognized, it has not been achieved.

4.3 Arbitration
Arbitration is a private legal process whereby the conflicting sides involve a third
party who has the power to decide in regards to the dispute after being provided
with the relevant evidence of the case. As it has been stated, due to its ability to
ensure that it maintains confidentiality in its proceedings, some of the parties
involved consider it to be advantageous than the other legal processes that can be
undertaken. The process is considered to be more flexible and less formal in
comparison to court proceedings; however, the results of the decisions are binding
about the judgment, and it can be enforced internationally14. The parties involved
normally provide for recourse about their arbitration right if they sign a contract
that unites them. It is achieved through the use of an arbitration clause whereby;
all the disputes that are will arise in relation a contractual relationship will be
subject to arbitration by the conditions that were provided before signing the
contract15. However, it also possible to seek for recourse to the arbitration of a
contract that has already been signed through the use of an adjunct. Also, the
parties involved can initiate the arbitration process through the signing of an
14
Pablo Cortes, "Pursuing Global Consensus on Consumer Redress: The UNCITRAL Technical
Notes for Online Dispute Resolution," The Law of Consumer Redress in an Evolving Digital
Market (n.d.), xx, doi:10.1017/9781139940900.008.
15
Chitranjali Negi, "Concept Online Dispute Resolution in India," SSRN Electronic Journal, 2015,
12-18, doi:10.2139/ssrn.2596267.
Online Dispute Resolution 13

arbitral compromise after a dispute. However, this is rare and a difficult process
because of the complexity of agreeing after a dispute has arisen. In all of these
cases that have been described above, it will be impossible to take the matter to a
court, unless there is a criminal offense involved. The reason for this is that in an
arbitration agreement, it normally involves renouncing the right to seeking a
regular recourse using a court of law.
The renunciation is considered to be binding in situations whereby the arbitration
in question can be described as ad hoc or institutional. In an ad hoc process, it is
primarily facilitated by an arbitrator who is independent of any institutional
framework. The disadvantage of using this framework is based on the fact that if a
disagreement about the establishment of an arbitral tribunal, the parties’ involved
only alternative is to seek legal recourse from the courts of a country whereby the
tribunal is located. This means that the national court will act as a judge who
supports an arbitral procedure, and will intervene by the rules that regulate that
procedure. If the parties involved in a dispute do not want the courts to intervene
at any point in order to solve the dispute, they have to use an institutional
arbitration, which provides them with a framework, to establish arbitral tribunal,
and be in a position to activate the process, even though disagreements or
problems may arise during the process of solving a case. The institution can make
appointments for arbitrators to solve a certain dispute, ensure that the whole
process runs smoothly about things such as meeting deadlines, and also set
adequate parameters for settling the disputes.
It is different from mediation because the neutral party has the authority to decide
in favor of one or two parties in the case after being presented with evidence of
the case. Also, in comparison to the traditional litigation process, arbitration is
considered to be less formal, uses fewer rules, and it is time convenient because of
its ability to be completed quickly. It uses an online platform to resolve a case.
Arbitration can either be binding or non-binding. However, before the involved
parties can decide to use this process to resolve a case, especially if they are in
different countries, it is important to assess whether the involved countries permit
their consumers to be involved in a binding arbitration ( this is because in various
countries do not allow their consumers to submit binding arbitration). In binding
arbitration, the arbitrator’s decision has an impact on the final judgment of the
case. However, in a non-binding arbitration, the decision made by the arbitrator is
advisory and the parties involved can choose to follow or ignore it.

5. Legal Challenges
Organizations that provide ODR services invest a lot of time and money to
develop new processes that can be considered to be more efficient and effective
Online Dispute Resolution 14

about resolving disputes on an online platform. According to these organizations,

they feel that because of the amount of time and money that they have invested in
creating these new processes, then they need to patent a certain process to protect
from being used freely by other organizations, to resolve certain disputes. The
problem with an organization being granted a patent for a certain process is that it
limits the ability of ODR to become a more widespread method of resolving
disputes that may arise from online transactions16. Therefore, there is the need to
critically analyze a patent that has been applied for and weighs on the impact that
such a process will have in the relation of increasing global popularity of ODR.
When resolving disputes, the parties involved normally exchange large quantities
of information that will be used to facilitate the dispute resolution process. In an
offline dispute resolution platform, some measures have been put in place that
ensure the contents that are used in various proceedings are kept confidential.
However, in an online dispute resolution process, the different protocols that are
used to facilitate the communication process via the internet do not have adequate
security measures that guarantee the information used or provided will be kept
confidential. In most cases, security in an ODR process can be limited in the
following areas:
• There is the possibility that when the two parties are communicating online,
the information that is exchanged during this process can be accessed by a third
party without their authorization. In future, to ensure that the communication
process is protected from access by third-party actors, the organizations that
provide the ODR processes will have to come up with authentication credentials,
or encrypt data through the use of public key cryptography.
• There is the need to ensure that there is the integrity of the transmitted data.
Third parties can hack into the system and send wrong information from one party
to another, and therefore ultimately disrupting the process. In a bid to deal with
this security issue, new technologies can be used to ensure that the two parties
involved in an online dispute are in a position whereby they can verify the
information that is sent by one party to the next. For instance, there is the use of
digital signatures by the parties involved in an online dispute. They ensure
security because of the parties involved will be able to verify the integrity of the
communications, and also they will assist each of the disputants regarding
verifying the identity of the other party in an online dispute.
• There is the possibility that one of the aggrieved parties may be involved in
sharing information with third parties, and therefore compromise the integrity of

16
Pietro Ortolani, "Self-Enforcing Online Dispute Resolution: Lessons from Bitcoin," Oxford
Journal of Legal Studies 36, no. 3 (2015): 595-629, doi:10.1093/ojls/gqv036..
Online Dispute Resolution 15

the ODR proceedings. Therefore, ODR service providers can solve such a
problem, by using the ‘split-key’ encryption, whereby when data is being
exchanged by the different parties during the ODR proceedings, it is encrypted
using a key in which the two parties will retain a certain part of the code that
limits access to information. Decryption will only occur via the consent of the two
parties involved in that case.
It has led to most operators having less confidence in using the ODR
processes to resolve their disputes. ODR service providers need to ensure that
they take advantage of technology so that they can secure the proceedings of an
ODR process, making the proceedings confidential, and therefore ensuring that
most people become more willing to use this process. It is important for ODR to
have legal mechanisms that will ensure that it can build consumer trust about
legal services when dealing with dispute resolution, and guarantee consumer
protection. Therefore, the regulation of the legal services should not be wholly
delegated to professional organizations that have invested their time and services
to facilitate this process. In fact, in order for this process to grow and become
accepted in a global perspective, states or countries should maintain a passive
stance about developing legal frameworks that it will enforce. The reason for this
is that the ODR takes place in a cyber-space, and therefore it should be self-
regulated. Governments of different countries should intervene to facilitate its
development of the process, ensuring that people become more trustworthy of
how it operates, and its effectiveness in solving disputes.

6. Conclusion
Due to globalization and advancement of technology, more people are resorting to
ODR processes to resolve their disputes. ODR process has been seen as an ideal
platform to deal with disputes that arise about the expansion of e-commerce.
People began using the internet for commercial purposes, and therefore due to
things such as the geographical distance between two parties involved in a
conflict, the online platform was seen as ideal in relation to dealing with such
disputes. ODR has the following characteristics: it is voluntary, informal,
confidential, and in most cases an assisted process, meaning that a third party will
assist in solving a case.
The ODR process is considered ideal when the case or conflict can be stated to be
dealing with a small number of issues. It is also an ideal process when it involves
few rather than large parties. It has also been regarded as an ideal process in cases
where the issues between the two parties that have disagreed in a case can be
stated, and where the use of witnesses is not required to solve a case. Even though
ODR process is seen as ideal regarding solving various online cases, it still faces
Online Dispute Resolution 16

various legal challenges such as various ODR providers applying for patents to
limit the processes that they have created. There is also the threat of information
being easily leaked when using an online platform than in an offline platform.
There is a lot that needs to be done to ensure that the ODR process becomes
internationally recognized. There is the need to develop further the existing legal
framework and add-on security measures of the ODR process to make it a viable
legal procedure that can be used by the conflicting parties to solve a case.
Online Dispute Resolution 17

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Online Dispute Resolution 18

Bio profile: Dr. Enas Qutieshat holds a PhD Degree from Aberdeen
University/United Kingdom. She is currently working at Philadelphia university/
Jordan. Her main field of interest in research work are in electronic commerce,
electronic contracts and consumer protection.