With the COVID-19 pandemic causing lockdowns and restriction to movement globally, a concern is ensuring that business continues, albeit, remotely. As we all work remotely, commercial disputes should not be left out. Now more than ever, businesses should consider using technology to facilitate dispute resolution. This article provides an understanding into the online dispute resolution mechanisms obtainable, their benefits, weaknesses and ways to mitigate such perceived weaknesses. The regulatory regime and recommendations for improvement is also proffered.

In this increasingly connected world, domestic and multi-jurisdiction transactions conducted entirely over the internet or facilitated by technology are on the rise. This has created a parallel need for innovative mechanisms for resolving disputes arising from such transactions. The dynamic growth of the internet, absence of territorial limitations, development of e-commerce and technological revolution has demanded a re-think of the traditional methods of alternative dispute resolution (ADR). This has led to a better integration of information communication technology (ICT) tools into ADR processes in other to meet the expectations of this technology age. Understanding artificial intelligence, big data, videoconferencing, online repositories, blockchain technology and Internet of Things (IoT) has become paramount because this technological change has the ability to increase efficiency, if properly harnessed.

This article postulates the role of technology in simplifying and facilitating dispute resolution using ICT tools, it expounds on the main facets of ODR (different resolution mechanisms available), highlighting its benefits, educating on its weakness/risks and ways to eradicate or mitigate them. It also presents various recommendations based on the most recent regulations and response by institutions/organizations which can be used to help formulate lex ferenda (future law). Finally, it makes a case for the embrace of ODR for not only the resolution of disputes arising from e- commerce transactions but also for transactions conducted offline (not over the internet).

Understanding ODR

ODR is an interdisciplinary field of dispute resolution which augments/complements traditional ADR methods with ICT tools to simplify and facilitate the resolution of disputes and achieve better outcomes in terms of cost, speed, convenience and efficiency.

In ODR, the entire dispute resolution process, including the initial filing, the appointment of neutral(s), evidentiary processes, communication storage, exchange and processing, oral hearings, if needed, discussions, and even the rendering of binding settlements, is conducted via the internet. It is usually seen as the online equivalent of ADR because it typically involves the use of ADR methods (complaints’ board, ombudsman, negotiation, conciliation, mediation, facilitated settlement or arbitration or a combination) assisted principally with innovative techniques and online technologies to prevent, manage and resolve disputes. The objective of ODR is to expand access to justice and provide fast and fair resolutions to as many disputants as possible using the power and reach of information technology.

Known as various terms over the years including Internet Dispute Resolution (iDR), Electronic Dispute Resolution (eDR), Electronic ADR (eADR), Online ADR (oADR), Online Dispute Resolution (ODR) has emerged as the most used term in recent years. Some ODR systems are synchronous where participants communicate with each other in “real” time using various messaging or videoconferencing technologies like Messenger, Skype or WebEx. Others are asynchronous using emails which are not real time, while the remaining use both synchronous and asynchronous communication tools.

There has been a sprinkle of ODR Providers globally including DRExM in Egypt to resolve construction disputes; SquareTrade in USA to resolve consumer disputes, CyberSettle in USA offering automated online mediation, Modria.com (Modria Reolsution Centre) offering online mediation and arbitration and the Resolution Centre of eBay, PayPal, Alibaba, Airbnb for resolving consumer disputes. An impactful initiative has been the ODR Platform provided for online consumer disputes in the European Union (EU).

ODR is the right synergy of technology and ADR and has over time created various modifications of traditional ADR methods, such as: automated negotiation, assisted negotiation, online mediation, online arbitration, blockchain arbitration and crowd-justice (where a selected panel of the public adjudges the dispute(s) online as done on the Ujuj ODR platform). A close examination of these mechanisms would be undertaken to highlight their benefits and make a case for their wide-spread adoption.

Online Negotiation

In traditional negotiation, the resolution process is undertaken by the parties or their representatives with no third party neutral. Whereas, in online negotiation, the ODR platform settles the dispute by using a process called blind bidding (akin to auction bidding) where each party, and sometimes the ODR system, submit settlement bid(s) (offer and demands) which are unknown to other parties unless and until the settlement proposals or acceptance of the parties are within a predetermined range or amount. Once this happens, the ODR technology uses an algorithm to automatically settle the dispute either by using the midpoint of the offers or the proposal that moves soonest to the Zone of agreement. In online negotiation, there is automated negotiation (using blind bidding technology) and assisted negotiation (akin to mediation). Online negotiation is usually automated producing fast and fair resolutions.

Online Mediation

Traditional mediation is a consensual and non-binding process which uses a third party neutral to guide or assist the parties towards making a resolution or settlement. Online mediation however uses ICT tools to resolve a dispute regardless of the place of its creation. Also known as cyber-mediation or virtual mediation, online mediation is one of the most frequently used ODR mechanisms. Like most other ODR methods, online mediation can be asynchronous using emails of submitted offers to settle on an amount acceptable to all (RisolviOnline.com) or synchronous and fully automated using a portal based on online conversations (electronic chat) or videoconferencing (video meeting) (TheMediationRoom.com) where the possibilities for dispute resolution are analyzed with the mediator online. The asynchronous online mediation has been shown to be more popular.

Online Arbitration

Arbitration is a process where a neutral third party determines the issues in a dispute and delivers a final, binding and enforceable decision (award). Online arbitration, also known as electronic arbitration, is an alternative means of dispute resolution where all aspects of the arbitration proceedings is conducted online. It can be carried out synchronous via videoconferencing (Smartsettle) but most online arbitrations today are asynchronous (Settle Today) because they simply require parties to upload their evidential documents, respond to questions from the arbitrator and they receive a decision from the arbitrator.

The autonomy of parties in arbitration should allow parties agree to effectively use technology in their arbitration. However, the shift to an entirely online arbitration process begs the question as to whether a fully enforceable electronic award is envisaged or contemplated under the current arbitration regime, especially under the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Award 1958 (New York Convention). It is believed that with the non- exhaustive interpretation of “in writing” and the recognition of electronic signatures by UNCITRAL Model Law on Electronic Signatures 2001, an electronic award would be enforceable and recognized.

A prominent example of an effective use of online arbitration is the Uniform Domain Names Dispute Resolution Policy (UDRP) created by the Internet Corporation for Assigned Names and Numbers (ICANN) for resolution of internet domain name disputes. The UNDRP developed a transparent global ODR process that allows trade mark owners to efficiently fight cybersquatting through UDRP dispute resolution service providers, one of which is the World Intellectual Property Organization (WIPO) Arbitration and Mediation Center. Even though the decisions are non-binding on parties they are highly effective because domain name providers have to effect the changes determined by panellists’ decision. A binding online arbitration over domain name disputes is however obtainable under the Hong Kong Domain Name Dispute Resolution Policy (“HKDRP”). An effective online arbitration can also be seen in chargebacks, where banks and major debit and credit card issuers like Visa, MasterCard, American Express and Paypal resolve complaints and reverse transactions made with credit or debit cards when a fraudulent use has occurred, or when there is a violation of the contract terms.

Despite their limitations, these examples show that electronic arbitration can be used effectively for diverse disputes with the right regulatory modifications.

Blockchain Arbitration and Smart Contracts

Unlike regular contracts, smart contracts are not written in natural languages such as English or French, but entirely in code and they automatically execute or enforce obligations. Blockchain arbitration has been developed as the dispute resolution mechanism of choice for disputes that may ensue from smart contracts, it is essentially arbitration that uses blockchain technology. Blockchain technology is an incorruptible digital ledger of transactions that can be programmed to record not only financial transactions, but almost anything that is of value for record. While originally devised for cryptocurrencies, this technology can be used for arbitration of smart contracts. Examples are CodeLegit (similar to online arbitration) and Kieros.

The growth of blockchain arbitration would be dependent on the modification of national legislations to recognise the validity of smart contracts, albeit written in code. The combined use of the non- exhaustive interpretation of “in writing” (Paragraph 19 of the Explanatory Note by UNCITRAL on the Model Law) and the doctrine of functional equivalence (Paragraph 16 of the UNCITRAL Model Law on Electronic Commerce 1996) can be used so that arbitral clauses in smart contracts fulfil the requirement for written arbitral clauses in Article 2 (2) of the New York Convention.


The ways to effectively incorporate technology into dispute resolution processes and their benefits are rife. It includes:

  • Receiving and sending written communications through electronic mail;
  • Secured online repositories, databases, statistics and cloud-based storage for organizing, exchange and storage of information which is especially convenient for numerous and bulky documents;
  • Alternative means of service achieved by uploading documents onto online repositories, reducing the cost of physical delivery of processes/documents;
  • Processing of written communication, sending automatic responses and shaping of written communications in a more polite and constructive manner (eg blocking foul language) done through artificial intelligence;
  • Improved security, reduced data breaches and increased privacy for parties by automatic data blocking, user verification and safeguards to protect against loss of data and hacking;
  • Virtual hearing rooms and hearing room technologies (Skype Premium, Google Hangouts, Cisco WebEx) assist with scheduling and conduct of hearings/meetings more efficiently and conveniently. Access, viewing, transfer and amendment of documents can also be done at hearings. Multimedia presentations, translations and real time electronic transcripts are also obtainable.
  • Simultaneous presence of many parties and their representatives without the hindrance of needing personal attendance at a specific place and time for hearings/meetings. This helps parties from different locations/countries overcome geographic constraints. Cost-savings (travel, accommodation etc) and convenience resulting from this is paramount.

Monitoring performance through blockchain technology and automation of ODR processes.

These ODR technologies are renowned for their informality, simplicity, user-friendliness, accessibility and flexibility. They are usually also multi-lingual and accessible to various people from diverse cultures and languages. They ensure that the dispute resolution process is not only fair, efficient, secure and easier but also cost effective, expeditious, flexible and convenient to the parties. This encourages more confidence in transacting online or across borders, by maintaining business reputations and good customer relations thus improving global economy. ODR also encourages parties to: seek redress even for low-value transactions; and enforce their rights, by affording easier access to justice. Finally, ODR excludes the problematic aspect of choice of law. Therefore, businesses who implement ODR will enjoy a sustainable competitive advantage over their competitors who do not make similar investments.

Weakness/ Risks and Mitigation

Some of the touted weakness of ODR is that asynchronous ODR lacks human relations, verbal or face- to-face interactions to evaluate parties’ motives/interests and the credibility of witnesses and in some cases an electronic and intangible third-party neutral replaces a human one. It is also believed that the asynchronous nature encourages the ease of making inflammatory comments and it has a high dependence on parties’ literary skills in expressing themselves over e-mail.

These weaknesses have become less significant in the wake of the incorporation of videoconferencing and virtual hearing room technologies to create synchronous ODR procedures. This makes ODR sessions “real time” giving participants a clearer picture/view of each other as the proceedings are undertaken, allowing for virtual cross-examination of witnesses and evaluation of parties, making the process similar to traditional ADR procedures.

In addition, the importance of face-to-face interactions is less significant in arbitration as arbitrators rely less on the parties’ interactions but more on evidentiary written submissions. More importantly, once high level of trust and confidence is reposed on ODR platforms the lack of mental connections or direct contact of participants will not result in a lack of will to participate or settle amicably. Finally, the impersonal nature of the ODR process can also be its advantage to some, especially for transactions over the internet where anonymity is highly valued.

Another risk associated with ODR is whether security, privacy and confidentiality of sensitive information is preserved. This can be mitigated by ensuring that all persons attending, participating and within ear shoot of the hearings (screen) are disclosed and additional confidentiality obligations (e.g no recording of proceedings without consent of participants) are imposed on such persons. The wide-spread clamour for, and advancement of, privacy rights and data protection regulations also work together in mitigating these risks as ODR technologies are now developed to be foolproof.

Another propagated weakness of ODR is the difficulties of enforcement. To nullify this, some ODR processes have developed self-enforcement mechanisms such as technical enforcement, black lists, trust-marks, chargebacks and escrows by payment providers, reputational reviews, consumer evaluations or erasure of bad reviews for compliance, etc to reinforce the efficacy of non-binding ODR processes.

Finally, a perceived limitation is that investment in ODR may not be justified. It is no longer true that the cost increases at the same rate as dispute volumes. By leveraging automation, data analysis, business rules and algorithmic resolutions, the cost per dispute can be reduced as the number of cases goes up while efficiency improves. With increased customer loyalty and retention that this process brings, ODR investment would pay for themselves in a short time. Add in the government’s interest in providing fast and fair redress to citizens (access to justice), and the business case for ODR becomes quite strong.

Regulatory Regime and Recommendations

An innovative initiative that implements and promotes ODR is the ODR Platform developed by the European Commission pursuant to the EU Directives on ADR and ODR for consumer disputes of 21 May 2013. The ODR platform is to facilitate online resolution of contractual disputes arising from domestic and cross-border online purchases between online customers and traders in the EU or Norway, Iceland and Liechtenstein, by ADR entities, without going to court. This aims at promoting the unified protection of consumer rights in EU. It helps avoid costly litigation fees and maintain good consumer relations while allowing consumers to seek redress timeously.

The UNCITRAL also published the UNCITRAL Technical Notes on ODR (nonbinding) in 2016 for the settlement of disputes arising from cross-border low-value sales and services contracts concluded using electronic communications. It highlighted the main elements of an ODR process in order to foster the development of ODR and to assist ODR administrators, ODR platforms, neutrals and the parties to ODR proceedings.

On the backbone of this, it is recommended that in order to properly harness its benefits, ODR must be properly regulated with proper accreditation of ODR Providers, minimum standards to guarantee fair outcomes and just principles to regulate the entire process. There needs to be tailored guidelines for the use of ODR and amendment of existing national legislations to accommodate ODR. The developed regulatory framework for ODR must introduce incentives that encourage the participation of parties including financial penalties, consumer evaluation and, if necessitated, mandatory participation. It must also respect and promote quality standards relating to expertise (quality assurance process and policies for selection and training), efficiency, fairness and accessibility and uphold the heralded principles of impartiality and independence (code of ethics for neutrals), transparency (proper disclosures and lack of conflict of interest), accountability, voluntariness (consent of all parties), confidentiality and due process.

The cost for ODR must be much lower in comparison to traditional dispute resolution methods in order to make the system financially sustainable (no prohibitive costs). A multi-tiered ADR system should be incorporated into the ODR process with resolution of disputes at the earliest possible stage. Third party neutrals must be qualified mediators or arbitrators and the use of ODR must be explicitly stated in the dispute resolution agreement of the parties.

The establishment of a central institution to coordinate the network of entities providing out-of-court methods for resolving disputes is recommended. A system that provides the general public with information on ADR and ODR must also be created. Finally, uniform standards (regulations) and formal monitoring system for ODR providers and processes should be made.


With the rise in technology, participants in dispute resolution now expect to have the ability to: move their resolutions forward on any day, at any time; securely upload documents, make proposals, discuss issues and develop settlement documents online. Based on these expectations, dispute resolution systems must effectively evolve to meet these expectations.

While ODR has gained immense traction in geographies like China, North America and Europe, the development of ODR in other regions of the world has been more inconsistent and in its early stages of development. However, it is hoped that with the realities of shrinking judiciary budgets, growing numbers of self-represented disputants/litigants, changing expectations of disputants, immense benefits of ODR and appropriate regulatory reform, ODR’s time has truly arrived.