Reputation, Justice & Fairness in Online Disputes

Given that no universal legal jurisdiction exists for the resolution of complaints and disputes that have developed from online activity (with the possible exception of the non-exclusive quasi-legal jurisdiction for domain name disputes that works  because of the de facto controls over the DNS), ODR in general offers a unique opportunity to lead in the the development of  new standards and concepts of justice and fairness in online activity. 

 

What standards have evolved that reflect the culture of the Internet? Do they vary from country to country or from service to service (eg is justice in eBay different from justice in Mercado Libre or in Ali Baba) ?  Do they vary from those applied by local laws. What factors and influences should standards reflect and support to resonate with their communities? Are there dynamics at play that would more likely attract both parties to an online jurisdiction over pursuing redress through local courts. This discussion will also focus on areas for complaint for which local laws might not normally give redress, eg reputation complaints that may not come within the law of defamation but generate real damage eg within a virtual world or other online community.

 

Moderated by:

 

Graham Ross is a UK lawyer and mediator (IT, IP, company and commercial)  with over 20 years experience in IT and the law. Graham is the author of legal application software (accounts and time recording) and the founder of LAWTEL, the popular web-based legal information update service.  Graham co-founded the first Online Dispute Resolution service in the UK, WeCanSettle, and designed the blind bidding software at the heart of the system. Graham  subsequently founded TheMediationRoom.com, for whom he designed their online mediation platform which operates on bespoke software developed specifically to meet the needs of both online mediation and arbitration. Graham is a Fellow of the National Centre for Technology and Dispute Resolution and speaks regularly at international conferences on the impact of the law on the Internet and e-commerce and on the application of technology  to ADR. Graham was host of the 5th International Conference on Online Dispute Resolution held in Liverpool, UK, in 2007 . Graham was a member of the Working Party of the European Committee on Standardisation (CEN) which developed  a taxonomy for Online Dispute Resolution and currently is a team member of the EMCOD project (www.emcod.net) which is  creating a facility for the European Union for the measurement of justice through ODR . Graham has run projects in ODR for the UK Courts Service, PayPal, European Consumer Centres and other organisations. Graham is also a leading trainer in ODR having created the leading e-learning course in ODR provided by TheMediationRoom to mediators in over 15 countries as well as developing a version specific for the Chamber of Arbitration of Milan.

 


Colin Rule 
is Director of Online Dispute Resolution for eBay and PayPal. He has worked in the dispute resolution field for more than a decade as a mediator, trainer, and consultant. He is currently Co-Chair of the Advisory Board of the National Center for Technology and Dispute Resolution at UMass-Amherst and a Non-Resident Fellow at the Center for Internet and Society at Stanford Law School.

Colin co-founded Online Resolution, one of the first online dispute resolution (ODR) providers, in 1999 and served as its CEO (2000) and President. In 2002 Colin co-founded the Online Public Disputes Project, which applied ODR to multiparty, public disputes. Previously, Colin was General Manager ofMediate.com, the largest online resource for the dispute resolution field. Colin also worked for several years with the National Institute for Dispute Resolution in Washington, D.C. and the Consensus Building Institute in Cambridge, MA.

Colin has presented and trained throughout Europe and North America for organizations including the Federal Mediation and Conciliation Service, the Department of State, the International Chamber of Commerce, and the CPR Institute for Dispute Resolution. He has also lectured and taught at UMass-Amherst, Stanford, MIT, Creighton UniversitySouthern Methodist University, the University of Ottawa, and Brandeis University.

Colin is the author of Online Dispute Resolution for Business, published by Jossey-Bass in September 2002. He has contributed more than 50 articles to prestigious ADR publications such as Consensus, The Fourth R, ACResolution Magazine, and Peace Review. He currently serves as a contributing editor on eBay radio and PayPal radio, and posts regularly to the Chatter, eBay's blog about the company and the community (in addition to his personal blog at Stanford). He holds a Master's degree from Harvard University's Kennedy School of Government in conflict resolution and technology, a graduate certificate in dispute resolution from UMass-Boston, a B.A. in Peace Studies from Haverford College, and he served as a Peace Corps volunteer in Eritrea from 1995-1997.

 

 

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Interesting topic. One question that comes to mind for me is whether ODR systems that don't control an escrow account for payments (like eBay/PayPal) between the disputants and thus don't have obvious enforcement mechanisms can ever really serve the cause of justice? I think the answer is yes, but I'm interested to hear other people's thoughts. Doesn't justice require a way to push the more powerful or misbehaving parties to comply with standards of fairness?

Am I the first, or has this discussion just not officially begun yet?  I have to say though I am now part of the international community that is the World Wide Web, I mostly use sites and services from the U.S. and other English speaking nations, so I don't have a good sense probably of how cultures are handling interactions with businesses from other cultures on the web (though I did just sell a comic book to someone in the Ukraine at a loss due to shipping costs.)

 

I wonder, and I hope that others with more knowledge here will chime in, if the relationships between any successful web business and its user is a compromise based on understanding that there will be cultural differences.  Surely the big companies that are global on the web must do research to make their environment as comfortable to the most people regardless of where they are from.  That's just good sense.  Meanwhile, I'd think that any user going to a foreign business on the web has some sense that things will be a little different, and thus accepting that it's not going to be exactly what they are used to.

 

And this applies just as much to a global online dispute resolution system.  Any system, whether an internal component to a business, a separate private ODR entity, or a government ODR entity, should be just as aware of variations of cultural norms and values, and the individual must come into use of this system with an understanding that this won't be what he's used to.  Open mindedness by all is the key to any successful conflict resolution anyways.

We have a tendency to talk about ODR issues, like access to justice, in terms of international e-commerce, but there's another world out there, too.  ODR technology may very well be most applicable, in a current legal sense, to disputes within existing legal systems, where there is a built in enforcement mechanism (small claims courts, traffic courts, etc., to cite a couple of very low level examples).  If the goal is to increase access to justice and the rule of law by making legal systems available, we don't always have to focus on the problem that exists when jurisdictional boundaries are crossed - there's quite enough to do within jurisdictions, as I know Graham has experienced in the UK.  But, having said that, I know enforcement is an issue of substance - Colin has talked publically about his shift from assuming consensus deals are self-enforcing to believing strongly in enforcement mechanisms after going to work for PayPal (Colin, if I do damage to your perspective, I apologize and you can correct me).  My point, I think, is that the wide range of applications for ODR technology in existing legal and political venues means that often we may be working within systems where enforcement possibilities exist.  Having said that, there's still the question of whether access to the legal system is the same thing as access to justice.

Bill Warters said:
Interesting topic. One question that comes to mind for me is whether ODR systems that don't control an escrow account for payments (like eBay/PayPal) between the disputants and thus don't have obvious enforcement mechanisms can ever really serve the cause of justice? I think the answer is yes, but I'm interested to hear other people's thoughts. Doesn't justice require a way to push the more powerful or misbehaving parties to comply with standards of fairness?

I think that this post begs broader questions about mediator accountability and acceptable behavior in mediation.  Unfortunately, few rules exist anywhere regarding appropriate mediation behavior on the part of either the mediator or the party participants (and their attorneys).  The only places where such rules do exist (and correct me if I am wrong) reside within certain programs and certain providers.  These rules of ethics largely deal with mediator behavior and not party (or attorney) behavior.  To the extent that jurisdictions have considered participant behavior, the attempts at "good faith" rules has largely been discarded as secondary to confidentiality (and rightly so).

 

Indeed, the mediation community has long shunned specific mediator rules other than ethics rules because the practice of mediation is so varied. 

 

But that does not answer the question posed!  I wonder whether the appropriate place to look for mediator or party redress for unethical -- or other bad -- behavior in mediation is based in contract law or tort law.  Presumably, a mediator or a mediation party can breach the contract to mediate and sue for damages, such as attorneys fees, mediator fees, and compensation for wasted time.  Additionally, claims for malpractice could potentially be made against a mediator, depending on the jurisdiction.

 

I am intrigued by the "reputation" idea noted above and whether that would help consumers choose reputable mediators.  Certainly an eBay-like reputation system would give instant feedback to a mediator for other consumers to see.  We would want to be concerned, however, with issues regarding undeserved negative, or even positive, feedback.

It sounds almost as if we need to have an international legal standard for the online dispute resolution community.  This will be extremely difficult, given the cultural differences.  Perhaps when one participates in eBay or such online purchases, they agree to adhere to a standard of ODR processes.  Perhaps these processes could be used as a starting point for future interenational ODR rules and standards.  It can be very frustrating when some norms are accepted in one culture, but not in another and the cultures interact together in the web community.  In my opinion, there needs to be some kind of standard, but this may be tricky.

My biggest concerns about creating legal standards are two-fold.  First, I have doubts that anyone could agree to such standards.  My second concern deals with the issue of barriers to entry and inadvertently (or perhaps purposefully) making these standards culturally-specific, thus removing from the marketplace a group of qualified neutrals that simply use a different type of approach.

 

Jeannine Simpson said:

It sounds almost as if we need to have an international legal standard for the online dispute resolution community.  This will be extremely difficult, given the cultural differences.  Perhaps when one participates in eBay or such online purchases, they agree to adhere to a standard of ODR processes.  Perhaps these processes could be used as a starting point for future interenational ODR rules and standards.  It can be very frustrating when some norms are accepted in one culture, but not in another and the cultures interact together in the web community.  In my opinion, there needs to be some kind of standard, but this may be tricky.
When reputation is at stake there is great potential for justice/injustice.  Reputation is made or broken online by consumer feedback.  Consumer feedback is easy to find for both products and service providers.  With a smartphone a consumer can take a picture of a bar code and see if other people have had luck with the same item, or look up the name of a service provider, a physician for example, to find out if he or she has good bedside manner. This kind of feedback cannot be made physically.  If a consumer takes a car in for service and later discovers that the service was not performed properly the consumer cannot post the complaint on the front door of the service center.  This can however be done online in the form of feedback and user reviews.  Such complaints are a powerful deterrent to potential customers.  This kind of negative feedback has the potential to do great harm to a business or service provider, while the consumer (or competitor) who left the feedback does so with little fear of consequence, and for practical purposes enjoys anonymity.  Consumer feedback and review provides greater incentive to firms that value their presence online to go out of their way to please customers and also to be web savvy enough to respond to negative feedback in a timely manner in the same forum.  ODR may somehow be a viable option for disputes over the removal of negative feedback/reviews, but if such information could be removed systematically, consumers may suffer from the lack of this information.
Interesting topic!  Within the framework of justice, I can't help but consider the advantage that large players (e.g. paypal) may have in utilizing online technologies for resolution.  Whereas a large organization may have experience with using the systems available, possibly having been through many disputes, and a complainant may not have similar experience, the advantage seemingly would consistently fall to the large organization.  Can justice be achieved in this framework?

Really interesting points in here.  I can't resist but respond to them all!


Bill wrote: "{can} ODR systems that ... don't have obvious enforcement mechanisms can ever really serve the cause of justice?" In my experience, enforceability is the #1 determinant of ODR system success.  eBay has it, ICANN has it.  My first company, Online Resolution, didn't have it -- so we died.  If there's a system where enforceability isn't possible (e.g. Craigslist) then I would suggest before an ODR mechanism can be deployed there, the system must be changed so as to make enforceability possible (perhaps, as Bill suggests, via escrow, or some other means.)

Robert wrote: "any user going to a foreign business on the web has some sense that things will be a little different, and thus accepting that it's not going to be exactly what they are used to."  This is true, but it's also clear that users who encounter sites that communicate to them in a manner consistent with their home culture have a competitive advantage.  If a stray English word makes it onto eBay DE the Germans go crazy, because they already suspect that eBay is really and English site just made over to look German.  eBay bought the leading auction site in China, EachNet, and then re-designed it to fit into the global eBay ecosystem.  The Chinese didn't like that, so they bailed and went to TaoBao, which is a China-only auction site.  eBay lost $350m learning that lesson. So yes, users know to expect a slightly different cultural experience when they visit a site from another country (just check out qq.com to see how different a top Chinese site looks from top English sites) but given a choice, they'll opt for a site that they feel comes from their home culture.

Dan wrote: "the wide range of applications for ODR technology in existing legal and political venues means that often we may be working within systems where enforcement possibilities exist.  Having said that, there's still the question of whether access to the legal system is the same thing as access to justice."  I think this is true, enforcement mechanisms do exist that ODR systems can leverage.  But the inefficiency of these mechanisms is a big part of the problem.  We need to come up with new enforcement mechanisms that better mirror the structure of the web, just like we need to come up with resolution systems that work more like the web.  Judges and jails and sanctions and police just won't do it.  Take away their domain names or shut down their facebook account -- now we're talking.

Kristen wrote: "I am intrigued by the "reputation" idea noted above and whether that would help consumers choose reputable mediators.  Certainly an eBay-like reputation system would give instant feedback to a mediator for other consumers to see.  We would want to be concerned, however, with issues regarding undeserved negative, or even positive, feedback."  There have been some interesting experiments with this -- check out positivelyneutral.com or adrselect.com -- but they haven't really gotten traction.  I think that holding neutrals accountable for party satisfaction is kind of unfair -- should the job of the neutral be to make the disputants like him or her?  If I know I'm going to be reviewed, and that my future employability will be based on positive reviews, then I'll bake cookies for all my sessions and never tell anyone they're being unrealistic.  Arbitrators in particular risk harsh reviews, even when they are scrupulously fair.  But the way of the internet is to review everything -- a la http://jotly.co/ -- so maybe neutral reviews are inevitable.
Jeannine's point about standards is interesting.  The F2F field has utterly failed in creating standards and yardsticks, but maybe we could do better online.  As Larry Lessig said, on the internet, code is the law.  Maybe we could use code to create measurable and enforceable standards more effectively than the offline attempts.

Garrett wrote: "When reputation is at stake there is great potential for justice/injustice... ODR may somehow be a viable option for disputes over the removal of negative feedback/reviews, but if such information could be removed systematically, consumers may suffer from the lack of this information."  I'm one step ahead of you, buddy -- check out the attached one pager on reviewref.com, the new service from my company, Modria.  I think this is a major space for ODR, and we intend to lead in this area.

Jay wrote: "a large organization may have experience with using the systems available, possibly having been through many disputes, and a complainant may not have similar experience, the advantage seemingly would consistently fall to the large organization.  Can justice be achieved in this framework?"  This is a crucial question, but I think the answer is yes.  But system designers need to account for this game-a-bility on the part of the repeat player, and build in procedural protections for the low-power/low experience participant (e.g. the buyer).  Level playing field between two sides where one side plays 100 times a month and the other side plays 1 time a year is no level playing field at all.

Thanks for the great comments, guys!  Keep 'em coming!
Colin

Attachments:

Some interesting breaking legal news relates to this issue of online reputation. The German high court establishes online libel rules http://t.co/kGISk2YG and indicates that foreign companies can be held liable for content appearing on German websites. From the story -

 It has also set out steps online services need to follow when it comes to libel accusations.

The Karlsruhe court clarified the rules in such a situation, saying that "the first complaint of the person concerned is to be forwarded to the person responsible for the blog entry [to comment on it]."

If the person does not respond to the potentially libelous statements "within a reasonable time," then it can be assumed that the charges are true. But if the accused does complain, the author must provide further evidence to support the statement.

The court added that if the author does not provide evidence of the claim - in this case, that the accused used a business credit card for sex club bills - then, there is an "unlawful violation of personal rights," and the service must "delete the entry objected to."

 

To answer  Bill's question about enforceability, ODR that involves online mediation should, subject to the thoroughness of the mediator, result in a signed agreement that is legally enforceable through the courts. To assist further in Europe  we also have the support of the European Directive on Mediation which enables the obtaining of court judgments enforcing agreements reached in cross-border mediation (the category particularly suited to ODR)..

 

To answer Kirsten on standards, we have the European Code of Conduct for Mediation, which  does provide a certain degree of process as well as ethics. See it at http://ec.europa.eu/civiljustice/adr/adr_ec_code_conduct_en.pdf

 

More interestingly the European Commission is announcing next month  new legislation on ADR that specifically is intended to target cross-border disputes such as mainly arise through online transactions, and plan to follow that up in 2012 with legislation specific to ODR.

 

But giving redress options through the courts, ie yet another process,  falls far short of what is really needed. Let not talk about enforcement but compliance.  How do we encourage people to comply with ODR decisions ?  I think Colin is on the right track with using reputation resolved through fair and just community influenced arbitral decisions as the most effective dynamic. I am talking here about reputation as affected by e-commerce and B2B disputes not feedback disputes. The key  is publication of rulings. If ODR services published  the outcomes of such of their community derived rulings as were not honoured, then suppliers and traders at the sharp end of these decisions  would see the commercial sense in compliance. If legislation were needed it would be to specifically exclude from defamation proceedings any publication of such decisions as were  reached by an ODR service that met approved standards.

 

 

 

 

Let me give one example of what I see as how ODR can gain more support when encouraging its outcomes to reflect more the culture of the relevant user community rather  than just the law itself. 

We once handled a C2C case in which a seller advertised a set of auto headlights. The seller was UK based. Along came a buyer who was also UK based.  He was upset to find on delivery that the headlights were of no use in the UK as they were for cars being driven on the right hand side of the road,ie continental europe. The seller had correctly described the lights in that he included the correct parts number. Had the buyer looked it up he would have realised they were for RHD. Of course he did not and just assumed that, as they were being sold in the UK, that they were for left hand drive vehicles. Had the claim been issued in an English court , the buyer's case would have been thrown out. There was no misdescription and the online service was not limited to the UK.

However, our arbitrator decided in favour of the buyer. He did so on the basis that the community of buyers on the service would have expected the seller to have assumed that the buyer believed it was for LHD and that the ethical standard for sellers that they would like to see operate on the service was for the seller, in such a case, to specifically correct likely misunderstandings.

Has anyone come across other examples in which the perceived ethics of the online community had greater influence on the outcome than the law? 

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