CIArb Features

Dispute Resolution by a Fourth Party - An Overview

12 Jun 2018

Traditionally, litigation is the Hulk of dispute resolution between two or more parties. Other alternatives such as mediation, conciliation and arbitration came into the scene as a disruption to the rigidity of litigation.

These alternatives have the same party formation; that is, the Plaintiff, the Defendant and the Neutral (Judge/Jury). The important and notable difference is the timeline and geography or jurisdiction.

In recent years, a silent independent party is lurking and assisting the neutral party in the party formation. This fourth party[1] is Online Dispute Resolution (ODR). ODR is the use of Information and Communication Technologies (ICT) to support the settlement of civil and commercial disputes[2]. This assistance by ICT is carried out by people, computers and software algorithms that support text-based, asynchronous conversations and secured communications between the parties to a dispute in real time. Since it is mostly online, parties communicate and share documents without a physical meeting. But, ODR is gradually developing from the use of simple software such as Skype and Google Docs to more complex algorithms.

With the rapid advancement in technology, this fourth party is slowly taking the place of the third party through automated negotiation, especially in online disputes pertaining to E-commerce, example, eBay, Amazon, and Alibaba and payment gateways, example, PayPal, Visa, MasterCard etc., across international jurisdictions. Its resolution is faster, more accurate, error-prone, and boycotts the traditional procedures of initial filing, notices, neutral appointment, claim and counter-claim, submission of evidences, and oral hearing. Recently, online start-ups have included a clause pertaining to ODR in the (agreed) Terms of Service.

Soon, a replica of ROSS Intelligence for the judicial system within the orbit of ODR will be created. It will be the Artificial Intelligence (AI) that can deliver decisions or judgements with the highest accuracy.

Now, if we acknowledge ODR as a disruption in the field of dispute resolution, will the fourth party be dependent on the third party or will it remain independent? Can there be an appeal to its decision?

The benefits of ODR as an independent party outweighs all methods of dispute resolutions, as the disadvantages of other methods of dispute resolutions are its advantages. 

The pitfalls of the independent fourth party are tapping of the secured communications between parties, hacking and installation of malware or virus. Any or all of these can affect its decisions or judgements.

The legal system is yet to wrap its head around ICTs as one of the ways to resolve disputes. It may recognize the fourth party only if it is dependent on the neutral party. The legal sector can only trust AI when it resolves civil or commercial disputes.

Thus, an acknowledgment of ODR as a disruption may be to the extent of assisting the parties with the preliminaries. Although, this may sound traditional, but dispute resolution still need the human side as a neutral party.

[1] E. Katsh, and J. Rifkin, J. Online Dispute Resolution: Resolving Conflicts in Cyberspace (San Francisco, Jossey-Bass, 2001).
[2] Technology, the key to the Future of Dispute Resolution ( accessed 30th March, 2018.