ONLINE DISPUTE RESOLUTION (ODR)

Online dispute resolution (“ODR”) can take place either entirely or partly online and
concerns two types of disputes: those that arise in cyberspace and those that arise offline. As
Internet usage continues to expand with it came new challenges, hence it has become
increasingly necessary to design efficient mechanisms for resolving Internet disputes because
traditional mechanisms, such as litigation, can be time-consuming, expensive and raise
jurisdictional problems.

As a result of the internet expansion ODR is also a developing area and it is technological
based offline disputes, on the other hand, can be addressed with traditional dispute resolution
mechanisms supplemented with online technologies.

Most ODR services are designed to settle simple consumer-based conflicts on a single
monetary
issue. Web-based technologies are already used even on traditional ADR e.g., submission of
pleadings
but this is not truly ODR, this is just a mere employment of technology in traditional
ADR. Compare with cyber courts and tribunals which also admit evidence.

ODR is a real alternative to litigation and domestic courts. Its main feature is that it is done in
an online environment. It is most suitable for claims that originate online i.e. the dispute is
resolved in the environment in which it is borne. It is suggested that it is particularly helpful
in the international arena because it reduces distance and deals with issues of jurisdiction.
TYPES OF ODR METHODS
There are three main types of ODR methods namely
i. Online Settlement-using an electronic system
ii. Online Mediation and Arbitration-with the aid of an electronic system
iii. Online Mediation and Arbitration-with the aid of a neutral third party

1. ONLINE SETTLEMENT (USING AN ELECTRONIC SYSTEM)

This is fully automated cyber mediation or negotiation. Here settlement is fully online and the
neutral third party is also fully automated. The software does not call for any interaction
between the parties and merely asks for proposals for settlement. The programme software
determines the zones for possible settlement. The services in these sites are entirely online
and the sites have neutral offers.
Websites such as Cybersettle, SettlementOnline and ClickNsettle offer services that are
entirely online and focus primarily on negotiating monetary settlements.
These websites serve as a neutral arena to exchange settlement offers. Offers of what?
Typically, an aggrieved individual (or, in most cases, his or her insurer), initiates a claim by
logging onto the service’s secure website and setting a deadline for resolution, which is
typically 30 to 60 days.
The service then emails the other party to let him or her know that a settlement offer has been
proposed and also gives them access to the website. The party can either accept or decline to
participate. If they decide to participate, he or she logs onto the website and submits a
demand. Computer software automatically compares the demand with the settlement offer
and emails both parties to let them know whether they are within the “range” of settlement or
whether there has been any movement towards settlement.
Cybersettle and SettlementOnline both allow three rounds of bidding. The cyber-
negotiation starts off with the initiating party entering settlement offers ranked for the first,
second, and third rounds and expiration dates for those rounds.
Computer software then emails the other party explaining that a settlement offer has been
made and requests the other party to put forth counteroffers for the first, second, and third
rounds. Computer software then compares the offers and counteroffers for each round to
ascertain whether the parties have reached a settlement. If the software determines that a
settlement has not been reached, then their offers remain confidential and future bargaining
positions are unaffected.
ClickNsettle, on the other hand, allows many rounds of offers and counteroffers within a
specified period of time. To ensure that the negotiations take place in good faith, partiers are
required to increase (or decrease) their offer (or counteroffer) by a specified percentage over
their previous offer (or counteroffer). If a settlement is not reached within the specified time
period, then the offers expire and the cyber-negotiation fails. The parties are, of course, free
to resubmit their claim or move forward with another dispute resolution mechanism, such as
arbitration or litigation.

2. ONLINE MEDIATION AND ARBITRATION-WITH THE AID OF AN

ELECTRONIC SYSTEM
These are technology assisted mediation and arbitration. There is no human third party it is
technology that plays the role of helping the parties reach a solution by asking questions and
suggesting possible answers and sending reminders.
The technology is used to enhance the possibility of settlement.

Mediation firms have established websites such as Internet Neutral, SquareTrade and
WebMediate to facilitate the resolution of disputes. Although these websites rely primarily
on online technologies such as e-mail, listservs, chat rooms, and instant messaging, they also
incorporate more traditional communication methods into the negotiation process.

 Typically, a party contacts the service and fills out an online form that identifies the
problem and possible resolutions.
 A mediator then reviews the form and contacts the other party to see if they will
participate in the mediation. If the other party agrees to participate, they can fill out their own
form or respond to the initial from through e-mail.
 This initial exchange of views may help the parties to understand the dispute better
and possibly
to reach an agreement. Parties choose from several online mediation alternatives, including e-
mail, instant messaging, chat conference rooms, and/or video conferencing. The costs,
however, vary depending on the online technology used and the length of the mediation
sessions. If the dispute remains unresolved, the mediator will work with the parties to help
determine issues, articulate interests, and evaluate potential solutions.

3. ONLINE MEDIATION AND ARBITRATION-WITH THE AID OF A NEUTRAL

THIRD PARTY

The key difference with ordinary ADR is the luck of face to face (although this can be
bridged by
skype or video conference). The technology plays an important role and sometimes the role is
a force enough to be considered a third force. Examples of sites include juripax.com;
themediationroom.com ;modria.com and Oneaccord.com.
Notably, here the neutral third party is human.

One Accord 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. Once the parties’ data is entered
into the website, the One Accord software uses it to develop settlement packages for the
parties to consider.

The facilitator continues to work with the parties to evaluate settlement packages and to
refine
preferences. If the parties choose the same settlement package or “solution,” the software
attempts to
generate improvements in order to maximize the benefits to both parties. Once a party wishes
to terminate the negotiation, a final written agreement is drafted with the
current solution and signed by all of the parties.
NB

The most famous and successful ODR is the one of ICANN and WIPO which has a dispute
mechanisms based on the internet. WIPO also has WIPO Arbitration and Mediation Centre

See Funzi Furnitures vs. UEFA [Decision 710 of 2000 WIPO Arbitration and Mediation
Centre]

Case Facts
Funzi furnitures of Mombasa had registered champions league.com when UEFA found it
already registered, they referred the matter to ICANN. Funzi Furnitures offered the domain
name to UEFA for sell but UEFA declined and instead brought the matter before the WIPO
arbitration and mediation centre. The arbitrator ruled that the Champions league.com had
been registered in bad faith (Against Article 4 of WIPO regulations) and had the name
transferred to UEFA. See Article 4 of the ICANN rules which deals with having domain
names on good faith.

ADVANTAGES OF ODR
1. It is inexpensive (No movement)
2. It is expeditious and useful for small claims
3. It is potentially around the clock (247)
4. It eliminates posturing and gamesmanship associated with normal ADR

DISADVANTAGES OF ODR
1. Legal challenges e.g. applicable law, enforcement of contract/ awards and jurisdiction.
2. Culture-Distinctive ideas and customs and social behaviour and way of life of a particular
society. Kenyans have not assimilated the idea of ICT or e-commerce or the settlement of
disputes. Kenyans value personalized relationships and there is high level of illiteracy. But
the adoption of mobile money may be theoretical obstacles but the reality is different.
3. ICT Infrastructure-Well not all places in Kenya have the necessary ICT infrastructure to
support ODR.
5. Regulatory Challenges-There is no legal regime to govern ODR. Kenya Information and
Communication Act has updated and has contained main features and recommendation by
UNCITRAL Model Law on e-commerce 1996. At regional level there is no Consumer
Protection Legislation or frame work and there is no regional or global hard law specifically
governing ODR, we therefore had to turn to ordinary ADR mechanism and adopt them for
ODR. At the domestic level one has to refer to the Arbitration Act 1995 and the Rules there
after and consider how you would make arbitration enforceable.
4. There can be issues of trust (Based on the environment no contact, no face to face)
5.The issue posed with digital signatures (Suppose one changes their digital signature)
6. Issues of data security and confidentiality.
7. Issues of privacy