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Online Dispute Resolution

Wednesday, August 29, 2012 @ 02:08 AM
Brian Montague

A local business client recently came to me with a contract dispute with a  business in another state.  It was one of those that courts are poorly situated to handle.  The amount in controversy was relatively small, especially compared with likely costs of conventional litigation.  The parties were in different states and their positions were close but unbridgeable.  The attorneys, charged with a professional duty of zealous advocacy, each argued their client’s position in informal settlement communications ably but to no avail.  Then, in searching for alternatives to the “final offer or we’re heading to court” letter, inquiry was made into the subject of this blog: online dispute resolution or “ODR.”

I do not profess to be an expert on the subject; for that matter, I’m not much of a student, having only begun my research.  But what I am seeing prompts the comment that lawyers in this situation do clients a disservice by not investigating and presenting the ODR option.

The Duke Law & Technology Review recently assessed a number of these services.  OneAccord, it reports, “uses an innovative negotiation process and a powerful computer software program that enables multiple parties to participate in interest-based negotiation.  The process has several phases and uses optimization . . . to transform conflicting objectives into fair and efficient solutions.  Initially, a third party facilitator works with the parties either in person or over the Internet to help them express their interests and identify issues.  The facilitator is an attorney who has completed a special 30-hour online training course.  He or she helps the parties model a negotiation problem and complete a ‘Single Negotiation Form,’ which outlines the underlying agreement and leaves blanks for unresolved issues.  The facilitator then works with each party individually to elicit their own initial confidential preferences among each of the issues and possible outcomes.”

Another of the many ODR services is Internet Neutral, which allows parties to choose from several online mediation alternatives, including e-mail, instant messaging, chat conference rooms, and/or video conferencing.  The costs vary depending on the online technology used and the length of the mediation sessions. According to the Review, “For mediations relying on technologies other than e-mail (e.g. chat conference rooms or videoconferencing), the parties are charged a half-day fee of $250 (and then $125 per hour after the half-day), which is split equally between the parties.  Disputes with simple facts that rely entirely on e-mail are charged for the time that the mediator spends preparing, sending and reviewing emails.  The fee varies from $1 to $6 per minute, depending on the disputed amount.  Internet Neutral uses conferencing software that enables the mediator to communicate with the parties in designated channels or “rooms” accessed by passwords.  During the mediation, the software enables the parties to communicate through two channels: one channel is for a private dialogue between one party and the mediator, while the other channel is an open dialogue with all participants, including the mediator.”

ODR has its limitations, of course, and may in fact be well suited to only a narrow range of dispute types.  But, for business lawyers and businesses alike, it is worth a look.  For more information, see also http://internetbar.org/resources/online-dispute-resolution/.

Written by Brian Montague

Brian Montague

A fourth generation Hattiesburg native, an Iraq and military veteran, and a 1983 graduate of the University of Mississippi Law School, Brian Montague has established an AV rated, well-respected neighborhood law practice focusing on trying cases in state and federal court, corporate and transactional work, insurance defense and coverage, personal injury and wrongful death, residential construction and development issues, and estate probate and administration.