On-line resolution set to soar

As a Web-based arbitration scheme goes live, Jonathan Haydn-Williams predicts a rapid increase in the use of on-line dispute resolution

Take-off is an experience which fewer business travellers are prepared to undergo in the current climate of Sars and international terrorism.

Increasingly, business people are asking themselves why travel to overseas meetings if there is an another way of doing business.

At the same time, the e-world is getting smaller.

E-commerce has survived the bursting of the dot-com bubble and e-technology is more robust and better accepted than before.

In these conditions, on-line dispute resolution (ODR) is ready for take-off.

Already, on-line schemes are providing arbitration, mediation, early neutral evaluation and negotiation.

They cover consumer disputes (business to consumer), business-to-business disputes and disputes in particular trade sectors.

ODR had an uncertain start.

There were a few short flights and bumpy landings as schemes went on-line and then off-line not long afterwards.

But the stage has been reached at which it is fair to assume there will be a sustained take-off.

On-line arbitration is essentially an e-version of documents-only arbitration, as practised in the City for centuries.

In the case of cross-border disputes, it enables a dispute to be resolved without either party having to take part in proceedings in a foreign country.

It is also faster and cheaper than traditional arbitration.

In e-commerce consumer disputes, it may provide access to justice which would otherwise not exist.

An example of an on-line arbitration service which has just gone live is TrustEnforce.org.

This provides an international service via a Web site, which includes rules, a list of arbitrators, fees calculator (based on amount claimed) and forms designed to simplify the procedure.

Time is measured in hours, rather than the traditional days.

So far as possible, the service is not tied to a particular country.

For instance, decisions are made by reference to the Unidroit (International Institute for the Unification of Private Law) principles of international commercial contracts.

However, every arbitration needs to have a seat in a national jurisdiction and TrustEnforce arbitrations are notionally based in New Zealand, which has adopted the United Nations Commission on International Trade Law (Uncitral) model law on arbitration and is party to the New York convention, so arbitrators' decisions should be enforceable in other countries.

On-line arbitration will not be suitable for every situation.

However, even where some form of live contact is needed between arbitrators, parties and/or witnesses, this can be achieved by means of telephone or video conferencing.

Even if a face-to-face hearing is necessary at some point, on-line and other IT techniques can be used in the preparatory stages to reduce hearings to a minimum.

In document-heavy arbitrations, the available bandwidth may be insufficient to send copies of documents on-line, but the use of scanned images on CD can get around the problem.

The International Chamber of Commerce's commission on arbitration currently has a task force examining such issues and the American Bar Association produced a report on recommended best practice for ODR providers in November 2002.

Uncitral also has the area under review.

This can give confidence that the inevitable challenges that will face ODR in the future will be met.

It seems to be a case of fasten seat belts for take-off.

Jonathan Haydn-Williams is a partner in the City office of Anglo-German law firm Taylor Wessing, a member of TrustEnforce.org's panel of arbitrators, a Fellow of the Chartered Institute of Arbitrators and a member of the ICC task force on IT in arbitration