New Zealand Law Society

Navigation menu

Mediating in the future

10 October 2014

Technology is part and parcel of modern life. With the swipe of a finger, anytime and from anywhere, we can have instant access to a rich, global catalogue of information via the Internet.

We have adapted our personal lives to accommodate developments in technology. Trips to the local bank to transfer money are largely a thing of the past, map books have been replaced by an app and communicating with someone on the other side of the world is no longer done by blue aerogram.

Technology is also changing the way the legal profession operates. In the litigation/dispute resolution sphere the Internet has given rise to a new phenomenon known as Online Dispute Resolution (ODR).

As the name suggests, ODR is a marriage between technology and dispute resolution processes such as negotiation, mediation and arbitration. It is growing in popularity overseas but has yet to catch on in New Zealand.

The purpose of this article is to explain what ODR is, how it might have practical application in this country and to let you know that it is coming, whether we like it or not.

What is ODR?

ODR is fundamentally a dispute resolution service run over the Internet. It is a reasonably new concept in the world of conflict resolution. A person born when the term ODR was coined in the mid-1990s would barely be able to order a drink at a bar in New Zealand.

ODR exists in a variety of forms overseas. There is text-based ODR, video conferencing services and a plethora of offerings in between. One of the most recognised providers of ODR is eBay, the global e-commerce giant.

Following a pilot in 1999 that offered an online, text-based mediation service to resolve disputes between buyers and sellers, eBay incorporated the service within its framework. In 2010 eBay recorded having online mediated a staggering 60 million disputes between its members. The use of the service continues to grow.

It is not just disputes that begin online that are suitable for resolution using the digital medium. In the United States, government agencies such as the National Mediation Board and the Office of Government Information Services have adopted and are promoting ODR as an effective method of resolving problems. In New York, ODR is used to settle “pot hole” disputes with local governments and some believe that in the United States the public use of ODR is set to skyrocket.

Websites offering private ODR services have come and gone. Some of the more recognised platforms include Cybersettle, SquareTrade and ECODIR.

These websites offer “automated negotiation” systems where a human mediator or arbitrator is replaced by computer software that is designed to find the overlap between what the two parties are prepared to settle for in monetary terms. These systems are criticised by alternative dispute resolution purists for not recognising the true purposes of ADR, perhaps justifiably.

Lawyers, mediators and arbitrators may be fearing for their crust as they read this article. However, rest assured there will always be a need for human input even when ODR becomes more widely available.

The complete online offerings are far from perfect and do not recognise that emotion, which is always present when people are in dispute, is a factor that cannot form part of a mathematical algorithm. The progress of ODR means that we should consider where, how and in what fashion ODR might have practical application in New Zealand.

ODR in New Zealand

The reality is that forms of ODR are already in New Zealand. We often negotiate by email and sometimes settle disputes this way. We also frequently attend teleconferences with the High Court and various tribunals around the country, mainly for procedural purposes.

These digital communication methods are now entrenched but it is important to recognise that only a few years ago many would have called them radical.

It is often said that conflict is a growth industry. While our courts and tribunals do an incredible job to keep up with demand, there remains a real need for swift, cost effective dispute resolution procedures. Could ODR bridge this gap?

The writer predicts online mediation that uses video conferencing software is not far from arriving in New Zealand. It would be a perfect tool for mediating contract or building disputes between parties who might not necessarily all be in the same place.

ODR would also be ideal for resolving the “sandwich class” disputes, those that fall beyond the Disputes Tribunal of New Zealand’s jurisdiction but towards the lower end of the spectrum for the District Court. With these types of disputes it is difficult to justify commencing proceedings as costs are prohibitive.

ODR could be offered by a private service provider or incorporated as part of the current Ministry of Justice framework. The possibilities are endless.

ODR – the positives

Obvious advantages to ODR include potential cost and time savings because geography no longer poses a problem. There would be no need to find a suitable venue to host the mediation. Participants could join via their computer, tablet or smartphone from wherever they are and a mediator could be sourced from another city (or even country) if availability became an issue.

The system could be tailored to the dispute at hand and simplified as needed. It could mirror the functionality of frequently used social media, online banking and other websites and apps, which many of us use and are familiar with.

There is also scope to incorporate unique features such as a “chat” window that would allow parties to caucus and speak to a particular person or with the mediator during a mediation session.

Moreover, all documents that are to be relied upon during the mediation could be uploaded and accessed by all parties. The website could become a complete case management hub for convenience, functionality and ultimately cost savings.

ODR – the criticisms

Is ODR a solution in search of a problem? Some might argue there is no need for ODR because mediators and arbitrators already meet the demand.

Mediators and arbitrators do an important job but it is questionable whether, as conflict and mediation becomes more prominent, they will always be able to keep up. Furthermore, as people become more expectant of technology in business and professional services the industry could find itself being left behind.

A likely criticism is that not everyone has access to and is competent with computers and technology. While this argument might be valid today, the writer has no doubts that tomorrow’s generation will be well equipped.

Could ODR lead to security/privacy issues? The simple answer to this question is yes.

Security and privacy issues are the achilles heal for ODR. However the risks can be mitigated. We bank online and use our credit cards to pay for things online. The sensitive information we divulge using these services is, for the most part, handled appropriately. It is therefore not difficult to imagine the same being the case for ODR.

Conclusions

To some readers ODR may seem like science fiction. However to think that ODR is not coming to New Zealand may be naïve. Certainly there are issues to work through and perhaps we are not quite ready for it in this country. However, in the not too distant future ODR will inevitably carve its place in New Zealand’s dispute resolution landscape.


Nathan Speir is a senior solicitor at Rice + Co Lawyers in Auckland. Mr Speir specialises in building and insurance litigation and has recently completed an LLM in dispute resolution at Auckland University. He can be contacted at nathan@riceandco.co.nz.

Last updated on the 17th March 2016