Online Dispute Resolution and Avoidance in Electronic Commerce 1999


Online Dispute Resolution and Avoidance in Electronic Commerce
Submitted by Christine Hart, LL.B.

PART I: Dispute Avoidance and Minimization in Electronic Commerce

A. Introduction

B. Barriers to Electronic Commerce

C. Consumer Purchasing Online

D. Dispute Avoidance and Prevention Strategies

  1. Certification
    1. Digital Security Certificates
    2. Privacy Policy Certification
  2. Money Back Guarantee
  3. Security Guarantee
  4. Other Guarantees
  5. Try Before You Buy
  6. Code of Ethics

E. Is Prevention or Avoidance Enough?

PART II: Dispute Resolution Online

F. ADR Explained

  1. Ombudsman
  2. Mediation and Mediation Models
  3. Arbitration
  4. Arbitration and Mediation Contrasted

G. Online Dispute Resolution Projects

  1. Cyber Tribunal
  2. The Virtual Magistrate
  3. Online Ombuds Office

H. Why So Few Cases?

I. Evolution of Online Dispute Resolution

J. Ramifications for Electronic Commerce

Executive Summary

Conflict is inevitable in human interaction, and commerce is no exception. The activities of buying and selling have always generated disputes about price, quality, time of delivery and many other terms. If these disputes could not be resolved between the participants, they could turn to the courts for a public resolution or, they could agree to submit to private dispute resolution, such as arbitration or mediation. It has always been more difficult to resolve commercial disputes when the parties reside in different political jurisdictions, for reasons of distance, cost, enforceability and the applicability of different laws. Electronic commerce has magnified those barriers and added a much greater expectation of speed and a wider range of cultural backgrounds and experience of those engaging in buying and selling transactions globally. It has also raised some new issues of anonymity, security, privacy, and constantly changing technology. It should not be surprising, therefore, that the Vendors have paid some attention to disputes in their efforts to persuade Internet "surfers" to "buy". They have first tried to minimize the problem by using "tried and true" strategies to avoid and prevent conflict as much as possible. They are now beginning to experiment with private online dispute resolution mechanisms. A few visionaries are exploring the very nature of how we communicate and trying out new pathways, seeking to understand better how we can communicate across large cultural and language gulfs. It is assumed, or perhaps hoped, that more effective communication will foster more and better resolutions of disputes. The next step is to include public dispute resolution in the debate and experimentation. Only then will the online dispute resolution realize its full potential as an integral feature of electronic commerce around the world. This paper examines the developments in dispute avoidance and online dispute resolution to date, and looks at the likely future of this area of commerce.

*Ms. Hart, a mediator, arbitrator and dispute process designer, is President of Accord/ hart & associates inc. She developed Draft Model Guidelines for Court-Connected Mediation Programs in 1998 for the CBA, is the Lead Arbitrator for the Investment Dealers Association Arbitration Program, co-authored Bypass Court: A Dispute

Resolution Handbook, Butterworth's Canada (1996), and was Founding Director of the Ontario Court (General Division) ADR Centre Pilot Project.

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