Online Dispute Resolution: Click Here to Settle Your Dispute

By Slate, William K., II | Dispute Resolution Journal, November-January 2001 | Go to article overview

Online Dispute Resolution: Click Here to Settle Your Dispute


Slate, William K., II, Dispute Resolution Journal


The advent of the Internet was bound to change our lives-the way we gather information, communicate with each other, do business, entertain ourselves, and even shop for goods.

In his address to this year's conference of the International Federation of Commercial Arbitration Institutions (IFCAI), AAA President William K. Slate II focused on the role of online dispute resolution in the burgeoning field of e-commerce. Slate discussed the results of an AAA survey on e-commerce and predicted that with the rapid growth of e-commerce will come steady increase in the use of online dispute resolution.

The following article is based on Slate's remarks at the IFCAI conference held in Prague, Czech Republic.

The focus of this article is online dispute prevention and resolution in e-commerce. But before looking discretely at arbitration and the world of technology, I think it important to first step back and see "technology" as a great deal more than just a tool or modern gadget, but as the larger force that is driving the new globalization system-where the world has become increasingly an interwoven place.

This globalization system is characterized by a single word: the Web! In the words of Thomas Friedman, the author of a compelling book on this subject entitled The Lexus and the Olive Tree, "...in the globalization system we reach for the Internet, which is a symbol that we are all increasingly connected and nobody is quite in charge."

So what then is the essence of globalization driven by technology? James Surowicki, a business columnist, has said: "It is the notion that innovation replaces tradition. The present-or perhaps the future-replaces the past. Nothing matters so much as what will come next, and what will come next can only arrive if what is here now gets overturned!"

While this makes the globalization system a terrific place for innovation, it clearly makes it a difficult place to live, since most people prefer some measure of security about the future, as compared to a life lived in almost constant uncertainty.

So, you may well ask, does this globalized economy driven by ever newer and newer technologies have implications, indeed impacts on arbitral institutions and dispute resolution processes? And, the answer is of course-- yes-and very much so!

E-Commerce Market

The e-commerce market, in terms of two generic groups, consists of sales between businesses, or B2B, and also sales between businesses and consumers, known as B2C. While the expected growth for both areas is astronomical, I do have some figures on the expected growth in the business-to-business area.

B2B e-commerce transactions worldwide will grow from $145 billion in 1999 to $7.9 trillion in 2004. Over $1.2 trillion of B2B e-commerce sales were made in the year 2000. Over $6.3 trillion of B2B e-commerce sales will occur by 2005. Thus, analysts are predicting that B2B e-commerce sales will grow six fold over the next five years. At the same time it is expected that access to the Internet will grow by over 100 million users in the next four years, bringing the total to over 350 million users by 2005.

Online Dispute Resolution

In the short span of a couple of years the proliferation and varied uses for online dispute resolution services has exploded. The World Intellectual Property Organization and a handful of other institutional providers are daily resolving Internet domain name disputes through an online arbitration process.

At last count, over 3,000 such cases have been filed. When a party registers a domain name they agree to submit any disputes to the online arbitration process. The fees are kept low for consumers and the process is simple and quick.

In the United States we see parties also using online dispute resolution services, and in the past year no fewer than 12 new entities have emerged providing online dispute resolution options. …

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