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Challenges and opportunities for dispute resolution in the era of electronic commerce.

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Mu. Slate is president and chief executive oficer of
the American Arbitration Association.
auto insurance matters where fault or liability
was clear and parties simply need to agree on a
dollar figure, the broader
applications are staggering
As global business becomes
and offer a wealth of possimore seamless and the
Internet continues to erase
O n a much larger scale
traditional boundaries,
of technology is the oppororganizations are signing
paradigm oh a neutral
tunity and demand to
more contracts abroad and
address dispute resolution
incorporating alternative
replicating a courtroom
needs in the business to
dispute resolution clauses
business (52B) vertical, digto avoid the uncertainty
ital marketplaces where comand delay ascribed to litigato the rebolution ob
panies move all of their suption in foreign courts.
disputes ban6 neutral
ply-chain operations onto
Does the new and
the Internet. They join with
expanding globalized econa n d dans courtroom.
other competitors to create
omy driven by newer and
an exchange to buy and sell
newer technologies have
goods, trade market inforimplications-indeed
sigmation and run back-office
nificant impacts-on these
operations such as inventory
dispute resolution processcontrol. At last count there were 287 vertical
es and the arbitral institutions that administer
5 2 5 marketplaces buying everything from enerthem? The answer is, of course, yes.
gy to paper goods to airplane parts. The number
In the United States, we see parties already
of business transactions for just one of these B2B
using online dispute resolution services, and in
marketplace exchanges is i n the hundreds of
the past year no fewer than 15 new entities have
thousands of individual transactions annually. In
emerged to provide online dispute resolution
2001 alone, B2B online transactions will exceed
options. For example, there are services available
$400 billion.
today through E-commerce dot coms, online
It seems unlikely that parties to B2B online
businesses with names such as,
exchange disputes on matters such as late delivand, where a simple monetary
ery, condition of goods and breach of contract
dispute can be submitted to an algorithm-based
will want to resolve their problems in court or
computer program that offers the parties up to
even by traditional ADR methods such as offline
three opportunities for a “match (each side
arbitration. Rather, they will want to resolve
offers a figure to the computer).
matters online, have their complaint filed online,
The traditional paradigm of a neutral replitheir documents considered online, their hearing
cating a courtroom has already given way to the
held online, their decisions made online, serviced
resolution of disputes sans neutral and sans
by institutional providers such as the American
courtroom. While these cases deal primarily with
INTO THE 2 1 s CENTURY: Thought Pieces on Lawyering, Problem Solving and ADR
Arbitration Association and others. Of course, in
the near term some complex matters will be
administered offline in the traditional fashion,
but over time economic expediencies will require
that fewer of these matters migrate beyond the
electronic environment.
What are some of the institutional opportunities and challenges presented by the “new
I. The opportunity is for institutions to
engage B2B online markets and provide a range
of services that (1) anticipate disputes; (2) provide “online” dispute methodology services to
B2B markets; and ( 3 ) provide expedited low-tech
offline options for complex matters.
11. The principal challenge is to think
about a new paradigm where arbitration and
related services are online with parties coming to
institutions in the traditional way, but where the
institutions are an integral part of the technology
systems which are enabling the operation of the
B2B vertical integrated market. Here the administering institutions must move quickly to
remain relevant.
111. Another institutional challenge will be
to help neutrals-arbitrators and mediatorshone their skills, if they are not already proficient in the use of technology, to receive, send
and consider complex legal and business issues
Will this online dispute resolution phenomenon expand in the near term beyond an
effort to reach a simple number? I believe it will,
primarily because online systems between B2B
and B2C (business-to-consumers) will drive the
acceptancc and ultimately the growth of online
resolutions. One year from now we will very
likely be amazed at the exponential use of online
In addition, there will be greater movement
in the direction of dispute avoidance before parties ever reach the stage of requiring mediation
or arbitration. This is already materializing in the
construction field, both domestically and internationally, through the use of partnering facilitation and other holistic approaches to anticipating
disputes. Again, this will likely be facilitated by
the use of online competencies dedicated to collecting data about disputes (such as their frequency, the nature and circumstances in which
they arise) that will enable parties to anticipate
with a greater degree of accuracy pressure points
where disputes may arise.
With all of the pertinent information
online and readily available, the parties will, in
essence, be able to address potential disputes
among themselves and even resolve existing ones.
To the extent that a third party is needed, a new
kind of dispute resolution facilitator will be
required, one who will work with parties in an
anticipatory way to avoid disputes, using welldeveloped negotiation skills.
Will there still be a place for traditional
arbitrations, only modestly affected by technology? Undoubtedly, but the role of traditional
ADR will diminish with each passing year. Ir is
far more likely that the route to a long life practicing in the field of ADR lies online. *
CPR institute for Dispute Resolution. Alternatives
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resolution, commerce, challenge, opportunities, electronica, era, disputes
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