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What Happens If You Fail to Participate in Alternative Dispute Resolution?

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Welcome to our December 2014 Newsletter! Please take the time to read the article and contact us should you have any questions or concerns.


Law Offices of Salar Atrizadeh

Online Dispute Resolution

The path for electronic commerce (a/k/a "e-commerce") has not been easy as disputes are inevitable. In recent years, e-commerce has changed the industry standards. As we progress, even more online disputes arise, whether for business or consumer transactions. Therefore, alternative dispute resolution has become necessary for resolving online disputes. A subsidiary of alternative dispute resolution is online dispute resolution (a/k/a "ODR") which has become a venue for resolution of certain types of conflicts (e.g., high-tech disputes). On a side note, the high cost of litigation makes it an unattractive method for resolving disputes. Also, the courts are not always familiar with the technological issues, such as cloud computing, online privacy, cybersecurity, crowdfunding, and digital currencies (e.g., Bitcoin, Litecoin, Worldcoin). Hence, both the judicial system and interested parties have turned to online dispute resolution.

In general, there are several options for alternative dispute resolution. First, mediation which is a voluntary procedure where a third-party facilitator promotes a resolution. It usually requires that the mediator maintain an open channel of communications between the interested parties. However, this could be an impediment in the e-commerce world. As humans, we are used to conducting face-to-face meetings, and if involved in a legal dispute, to physically meet with the interested parties. In other words, physical presence has been an essential component to alternative dispute resolution. Second, arbitration is the process of referring a dispute to an arbitrator as an unofficial judge to make a binding decision upon the parties. In the United States, the federal Arbitration Act governs arbitrations. International arbitration and the enforcement of foreign awards are governed by the International Arbitration Act 1974.

Online dispute resolution is practical if there are supportive technologies and legal guidelines. There are also social or cultural issues that may arise during the process. Many people use the Internet for business and personal communications. At this time, there are several available technologies for online dispute resolution. For example, email, instant messaging, videoconferencing, tele-immersion, or artificial intelligence are some of the options, which can be chosen by the interested parties. The main concerns may be hardware, software, cost, ease of use, and bandwidth. Technology can be used in variable terms in order to accommodate the process. For example, the mediator can use email to slow down communications, or in the alternative, use instant messaging to speed up communications. The issues that need to be addressed, include, but may not be limited to, confidentiality, privacy, security, training, and ethical guidelines. As such, there may be a need for government regulations, and even more importantly, international cooperation. However, regulations should not serve as an impediment to innovation.

For more information about online dispute resolution, you should consult with an attorney. At our law firm, we assist clients in alternative dispute resolution in order to help them resolve legal issues.

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