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One resolution to the legal difficulties raised by e-commerce has been the use of online dispute resolution processes — the application of Internet-related technologies such as e-mail, Web sites, chat rooms and e-messaging to resolve disputes that arise from Internet transactions. Thus, ODRP is both a disagreement determination procedure as well as a component of e-commerce itself. An Internet transaction typically raises the application of law and jurisdictional matters, which make dispute resolution complex. This legal complexity has been a factor in arresting the development of e-commerce. As e-commerce grows, the number of Internet-based legal difficulties also grows. This conclusion is substantiated by the fact that the Federal Trade Commission has reported Internet-related complaints have substantially increased each year from 1998 to 2002. Due to key differences between traditional disputes and Internet disputes, ODRP offers certain special resolution advantages. In e-commerce, the parties are normally strangers to each other and have not had any opportunity to meet face-to-face to negotiate the transaction. Typically, the parties to an e-commerce transaction are in different jurisdictions. Unlike transactions between their traditional counterparts, there may be no local commercial outlet through which the disgruntled consumer can seek redress if a problem arises during, or as a result of, the transaction. From a legal perspective, cross-border online transactions call into question the ability of judicial authorities to secure enforceable awards. From a practical perspective, this physical distance makes it more difficult and costly to employ traditional legal cures. None of these difficulties adversely affect the use of ODRP. The ODRP is similar, but not identical to, the classic processes of alternate dispute resolution. Both ODRP and ADR may include negotiation, mediation and arbitration processes. And both ODRP and ADR have similar deficiencies, such as the lack of a discovery process, which is important when critical information is in the hands of only one party. Normally, both ODRP and ADR also lack an appeals process. The concerns with respect to the lack of an appeals process are amplified by the fact that the legal grounds to challenge are very demanding, with a strong presumption in favor of the arbitrator’s decision. Additionally, ADRs have been used to resolve certain Internet-related matters, including domain name dispute resolutions. Nevertheless, ODRP is different from ADR and the differences make it an element of e-commerce. The ODRP is designed to handle Internet dispute resolutions exclusively while the ADR process is primarily designed to handle traditional legal disputes. The ODRPs do not take jurisdiction into consideration and are suitable for entirely domestic (parties within one country) or international (in the sense of cross-border) disputes. Alternate dispute resolutions normally consider the law and jurisdiction of a particular place prior to application of the process. Finally, the online dispute resolution service provider may be integrated into an Internet application site (such as an Internet auction site) and may also act as a stand-alone provider for still other disputes. The ADR process almost exclusively uses third parties. Participants in e-commerce will most likely agree to ODRP when they use a Web site because, by using that site, they will agree to be bound by a terms-of-use agreement that requires the use of some form of ODRP. The terms of the ODRP, like the terms of an Internet terms-of-use agreement, are generally not subject to negotiation. A typical ODRP clause in a Web site’s terms-of-use agreement will specify the type of ODRP to be used and the procedures to be implemented for the type of ODRP chosen. It will most likely determine which rules will apply to that process, identify which ODRP provider will handle the procedure and at what costs, and limit the remedies available to the aggrieved party. Due to the uncertainties associated with e-commerce, it may be prudent for e-commerce vendors to offer, and for e-commerce consumers to participate in, ODRP after a dispute has arisen because there may be no other options to resolve the conflict. Since e-businesses generally do not run their own ODRP programs, both the e-seller and the e-buyer are treated fairly. This is particularly the case when the ODRP is run by a well-known entity such as the Better Business Bureau. The handling of complaints is the most common task of the ODRP. Most companies that transact on the Internet resolve e-commerce related difficulties via a customer service/complaint handling service. For example, Amazon.com has an ODRP integrated into its Web site. Third-party ODRP sites also exist, such as BobVilla.com and Baddealings.com. This type of ODRP allows Internet users to post their consumer complaints on the ODRP site. Some of these sites are merely bulletin boards, while others will forward the complaints to the company concerned. Normally these ODRP sites encourage the companies to post their responses to the complaints. In addition to these private ODRP sites, consumer protection organizations in many states and the FTC participate in ODRP sites. These sites do not depend upon existing law, nor do they need jurisdictional approval to resolve disputes. Another use for ODRP is the automated settlement of monetary disputes that is provided by a computer with an algorithm. In general, each party to the dispute submits its offer/demand to the mediation computer program, which produces a nonbinding settlement recommendation. In comparison with other dispute resolution processes, this program has proven to be a means for parties to settle their differences with minimal cost and detriment to ongoing business and personal relationships. Needless to say, parties are only bound by a settlement recommendation that is subsequently memorialized in an agreement. The ODRP also includes the use of e-mail and the more structured environments of ODRP service providers. For example, SquareTrade offers services to resolve disputes that arise from the use of eBay, Verisign and PayPal Internet transactions. Internet technologies in this instance usually include some form of online mediation. Typically, this use of ODRP will occur in an Internet resolution room. Internet arbitration is yet another type of ODRP. Internet arbitrations are typically conducted in virtual resolution suites. The software programs that enable this kind of process allow parties to submit and post in the document room. Access to each room is determined by a neutral third party. To ensure that courts will not vacate the results of an ODRP, e-businesses that use ODRP should make adequate disclosures. Just as full and timely disclosure remains a dominant concern for users of ADR, it is a concern for users of ODRP as well. In particular, both ethical and statutory codes require third parties that participate in ODRP to disclose any relationships that may impact their impartiality. This precept applies to mediators as well as companies that provide the technical means by which ODRP is conducted. Lawyers should be aware that in the field of dispute resolution, courts are empowered to enforce disclosure. In Commonwealth Coatings Corp. v. Continental Cas. Co., 393 U.S. 145 (1968), the Supreme Court vacated a unanimous three-panel award when one member failed to disclose an earlier business relationship. This action was based on the mere appearance of impropriety rather than a showing of actual bias. As in ADR, the focus of codes and cases has been on the disclosure duties of the neutral ODRP third-party participant and not the disclosure responsibilities of the participants in the process. Consequently, merely by including an ODRP clause in an e-commerce site’s terms-of-use agreement may not equate with the requirement of fair and full disclosure. In fact, the FTC specifically advises e-businesses that significant information, such as conditions or limitations of an offer, should not be buried at the end of a long Web page that requires consumers to scroll past unrelated information. Certain e-commerce associations, including the European Union, mandate the clear disclosure of dispute resolution processes. Thus, companies that use an ODRP should use plain language to spell out their ODRP provisions in their Internet terms-of-use agreements, including providing transparent conflict resolution mechanisms. The use of a hyperlink to connect an Internet terms-of-use index to the appropriate ODRP clause is generally advisable. In the interest of full and fair disclosure, the ODRP notice and description should be prepared without using legalistic jargon. The notice should be clearly and prominently displayed, and a separate and prominent dispute resolution icon, similar to those used to point out privacy policies, should be placed on the e-commerce site so users can be transported to the section of the terms of use agreement containing the applicable ODRP provisions with the click of a mouse. Bick, counsel to Brach, Eichler, Rosenberg, Silver, Bernstein, Hammer & Gladstone (www.bracheichler.com) of Roseland, N.J., and an adjunct professor of Internet law at Rutgers Law School-Newark, is the author of “101 Things You Need To Know About Internet Law” (Random House 2000).

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