Methods:

1. Consensual
A. Automated negotiation
ONLINE DISPUTE RESOLUTION

Automated negotiation relates to those methods in which the technology takes over (aspects of) a negotiation. Most
of the ODR services in this area are so-called 'blind-bidding' services. This is a negotiation process designed to
determine economic settlements for claims in which liability is not challenged. The blind bidding service may be
thought of as a type of auction mechanism where some or all information about the players' bids is hidden. There
are two forms of automated negotiation, double blind bidding, which is a method for single monetary issues
between two parties, and Visual Blind Bidding, which can be applied to negotiations with any number of parties
and issues.

i) Double Blind Bidding

Double blind bidding is a negotiation method for two parties where the offer and demand are kept hidden during the
negotiation. It commences when one party invites the other to negotiate the amount of money in dispute. If the
other party agrees, they start a blind bidding process whereby both parties make secret offers or bids, which will
only be disclosed if both offers match certain standards. They can usually submit up to three offers and if the bids
of both parties come within a predetermined range (usually range from 30% to 5%) or a given amount of money
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(e.g. €3,000), then the technology automatically settles the dispute in the midpoint of the two offers. Although, it is
a simple method, it effectively encourages the parties to reveal their 'bottom line' offers and demands, splitting the
difference when the amounts are close.

ii) Visual blind bidding

The primary distinction of visual blind bidding is in what is kept hidden from the other parties. In traditional double
blind bidding, the offers and demands are kept hidden, whereas with visual blind bidding what is kept hidden is
what each party is willing to accept. This method can be effectively applied to the simplest single-value
negotiations or the most complex negotiations between any number of parties and issues.

Visual blind bidding commences when all parties agree to negotiate with one another. They start the process by
exchanging visible optimistic proposals, which define negotiating ranges. The system then generates suggestions
that fall within the negotiating ranges. Parties may continue to exchange visible proposals or contribute their own
suggestions to the mix. Suggestions contributed by the parties remain anonymous, thus avoiding the face saving
problem of accepting a suggestion made by another party.

A resolution is declared by the system at the end of a negotiating session if all parties have accepted one or more
packages (of one or more proposed decision values) at the end of that session. Which of those packages becomes
the agreement may be determined by an algorithm that rewards the party that moves soonest into the Zone of
Agreement. This algorithm is thought to encourage concessions and quickly indicate that they are willing to accept
a fair outcome. This is in contrast to the chilling effect that occurs with the more common split-the-difference
algorithm.

Automated negotiation has proven to be particularly successful with insurance compensations and commercial
activities. It is also a valuable tool for lawyers because they too can use it without revealing what they're willing to
accept (unless an agreement is reached) and more importantly, without waiving their right to access the court, in the
case that the negotiation is unsuccessful.

Thus, ODR is useful for resolving brick and mortar disputes that arise in businesses, insurance companies and
municipalities, who are finding that ODR saves them money and time when dealing with B2C disputes.

B. Assisted negotiation

In assisted negotiation the technology assists the negotiation process between the parties. The technology has a
similar role as the mediator in a mediation. The role of the technology may be to provide a certain process and/or to
provide the parties with specific (evaluative) advice.

Mediators use information management skills encouraging parties to reach an amicable agreement by enabling
them to communicate more effectively through the rephrasing of their arguments. Conciliation is similar to
mediation, but the conciliator can propose solutions for the parties to consider before an agreement is reached. Also,
assisted negotiation procedures are designed to improve parties' communications through the assistance of a third
party or software. In fact, it has been argued that assisted negotiation, conciliation, and even facilitation, are just
different words for mediation. The major advantages of these processes, when used online, are their informality,
simplicity and user friendliness.

i) SquareTrade

The leading ODR provider for consumer mediation was until recently SquareTrade. It was contracted by a number
of market places, the largest of which was eBay. However, due to changes in the eBay feedback system in May
2008, SquareTrade decided to stop resolving eBay feedback disputes from June 2008. SquareTrade continues
providing services to eBay users, such as warranty services and the trustmark program. It appears that in the last
year these services have been taken over by eBay and PayPal dispute resolution services, but results on these
services are still scarce.

SquareTrade did not handle disputes between users and eBay, only between sellers and buyers on eBay.
SquareTrade offered two levels of dispute resolution: assisted negotiation and mediation. SquareTrade was only
used after eBay's own consumer satisfaction process. In the last few years, SquareTrade has resolved millions of
disputes across 120 countries in 5 different languages.

The advantage of dealing with large number of disputes is that the same issues arise many times, thus it is possible
to divide the disputes into different sections. The SquareTrade process started when a buyer or a seller filed a
complaint. To do so, the claimant was asked to fill out a web-based standard claim form that identified the type of
dispute and presented a list of common solutions, from which the claimant selected the ones that he agreed to. The
other party was contacted by email where he was informed about the SquareTrade process, and asked whether he
wished to participate. The parties were often keen on participating because this was the only manner by which the
buyer could get redress and the seller positive feedback. The other party filed the response, selecting the
resolutions. If both parties agreed on the same resolution, the dispute was resolved. When an agreement could not
be reached, parties were put into a negotiation environment. A web interface was used to shape communications
into a constructive and polite negotiation. This was achieved with software tools that limited the free text space,
encouraged the proposition of agreements, set deadlines and even shaped the tone of exchanges.

This software was the key element of the process because it took over some of the expertise of the third party. This
process could be defined as 'mediated negotiation'. According to Rabinovich-Einy, SquareTrade technology,

"intervenes in the negotiations between the parties and, by allowing parties to formulate and reformulate the
problem and the solution, performs some of what would be associated with a mediator's role, moving the parties
from a problem mode to a solution stance."

Most disputes (over 80 percent) were resolved during the first two stages, which was an impressive success rate
given that in the majority of cases, the parties had already been involved in some type of failed direct negotiation
before engaging with SquareTrade. In the rest of the cases a mediator could be requested for a nominal fee, acting
as an expert evaluator or conciliator that made settlement proposals to the parties. This second stage involved the
payment of a US$29.95 fee. According to SquareTrade, "[a] sophisticated case management technology enables
mediators to handle lower to medium-value consumer disputes in an efficient cost effective manner." The appointed
mediator proposed solutions, if required by the parties to do so. Agreements were always kept confidential by
SquareTrade, and became binding as contracts.

SquareTrade has proven that processes such as online negotiation and online mediation can be efficient tools to
resolve e-commerce disputes. One of the key issues for the success of SquareTrade was the simplicity and
convenience of this service. In addition, SquareTrade services to eBay were concentrated on a reduced number of
issues, such as delays, bad descriptions and negative feedback. This made possible the development of an efficient
automatic process that enhanced online negotiation. The success of consensual and automated processes depends on
the nature of the dispute, the accuracy of information provided, and the capability of the software or the third
neutral party in assessing and evaluating the facts and evidence. SquareTrade was particularly effective because it
introduced incentives that encourage parties' participation; i.e. both parties wished to resolve their dispute: sellers
want to obtain positive feedback and buyers want redress. In general terms, widening the scope of clients' claims to
the global market invites extra variables to play: cultural differences, such as high and low culture perceptions and
the cross-cultural variations of what constitutes the customer satisfaction experience.

C. Expedient Non-Adjudicative Online Resolution

Another form of alternative dispute resolution prioritizes expedience and dispenses with adjudication all together,
in recognition of the litigants' desire to simply dispose of the matter as quickly as possible. By removing any hint of
adjudication, services (e.g., One Day Decisions) "fast track" a version similar to blind bidding which is restricted
privately to the two parties and an algorithm determines a fair value to be accepted by each party. Unlike other
services, once accepted by both parties, the settlement amount is applied to the issuance of a Certificate of Final
Resolution which both parties accept as irrevocable proof of resolution and final settlement. By avoiding
adjudication, expedient non-adjudicative online resolution saves litigants time in court, time away from work and
other fees and expenses, while protecting each from ancillary damage: The winning party generally collects more of
his disputed amount and the losing party suffers no credit damage from having a judgment entered against him.
Expedient Non-Adjudicative Online Resolution is generally utilized in cases that might otherwise be heard in small
claims or limited civil matters.

D. Crowdjustice

As an alternative to private, professional settlement, the concept of crowdjustice has recently taken shape as a
means to leverage social norms and the wisdom of crowds to determine the outcome of a dispute.

2. Adjudicative
A. Online arbitration

Arbitration is a process where a neutral third party (arbitrator) delivers a decision which is final, and binding on
both parties. It can be defined as a quasi-judicial procedure because the award replaces a judicial decision.
Arbitrators can be current or former trial judges, but that is not a requirement. However, in an arbitration procedure
parties usually can choose the arbitrator and the basis on which the arbitrator makes the decision. Furthermore, it is
less formal than litigation, though more than any other consensual process. It is often used to resolve businesses'
disputes because this procedure is noted for being private and faster than litigation. Once the procedure is initiated
parties cannot abandon it, unless they both agree to discontinuing it (e.g. when they reached a settlement - although
usually the settlement will be communicated to the arbitral tribunal and an award rendered on this basis). Another
feature of arbitration is that the award is enforceable almost everywhere due to the wide adoption of the 1958 New
York Convention on the Recognition and Enforcement of Foreign Arbitral Awards. Moreover, arbitral awards
prove frequently easier to enforce than court decisions from overseas.

The majority of legal studies on online arbitration agree that, neither law, nor arbitral principles, prevent arbitration
from taking place online.:138 However, there may be several aspects in online arbitration that need to be regulated.
Although online arbitration seems admissible under the New York Convention and the E-Commerce Directive, this
is arguably an assumption by most commentators, rather than a legal statement. Since arbitration is based on a
contractual agreement between the parties, an online process without a regulatory framework may generate a
significant number of challenges from consumers and other weaker parties if due process cannot be assured.
Currently, most arbitration providers allow parties to carry out online only part of the arbitration process, e.g.
parties may download claim forms, the submission of documents through standard email or secure web interface,
the use of telephone hearings, etc. Other providers conduct their proceedings exclusively online, either by email or
on a dedicated web platform. A key element of arbitration is the right for a party to question the witnesses of the
other parties and that can now be done at low cost with an online audio and video hearing process using newer
technologies such as Skype Premium or Google Hangouts. Cross examination of remote witnesses regulated by the
arbitrator can ensure the fairness and maintain a judicial quality for the online arbitration process.

The main challenge for online arbitration is that if judicial enforcement is required then it partly defeats the purpose
of having an online process. Alternatively, some processes have developed self-enforcement mechanisms such as
technical enforcements, black lists and trustmarks.

B. The Uniform Domain Names Dispute Resolution Policy (UDRP)

Traditionally arbitration resolves disputes by delivering a decision that will be legally binding, i.e. enforceable by
the courts in the same manner as a judgment. Non binding arbitration processes may also be effective when using
ODR tools because they often encourage settlements by imparting a dose of reality and objectivity. In addition,
self-enforcement measures may reinforce the efficacy of non binding processes. The most significant example is
the Uniform Domain Name Dispute Resolution Policy (UDRP) created by the Internet Corporation for Assigned
Names and Numbers (ICANN). Some commentators have referred to the UDRP as an administrative process. In
any case, the UDRP has developed a transparent global ODR process that allows trade mark owners to fight
efficiently cybersquatting. The UDRP is used to resolve disputes between trade mark owners and those who have
registered a domain name in bad faith for the purpose of reselling it for a profit, or taking advantage of the
reputation of a trademark.

Trademark owners accessing the UDRP must prove to the panel three circumstances:

similarity of the domain name to the trade or service mark;

lack of rights or legitimate interest in the registered domain name;

However, the UDRP presents its own problems that show the challenges that an online adversarial system applied
to mainstream e-commerce disputes would have. The main worry is that the evaluation of the panel decisions often
shows a lack of unanimous consensus in the interpretation of the UDRP. This may be due to a number of reasons,
such as the lack of an appellative review and panels composed by members from a multitude of jurisdictions and
informed by different legal traditions.

On the other side, it is undeniable what ICANN with the UDRP has achieved in developing an effective ODR
procedure based on contractual adherence that allows trade mark owners to transfer or cancel a domain that
blatantly violates IP rights. The UDRP providers have dealt efficiently with over 30,000 domain name disputes.
Their success derives from two aspects: First, the UDRP deals only with blatant disputes, which are abusive
registrations made in bad faith in order to take advantage of the reputation of existing trademarks. Secondly, it has
incorporated a self-enforcement mechanism, which transfers and cancels domain names without the need for
judicial involvement. This is a positive accomplishment for the development of e-commerce because it favours
consumers' confidence in the Internet by reducing the number of fraudulent registered domain names.

C. Chargebacks

One of the main focuses of e-commerce up until recently has been related to secure payments. Chargebacks is a
remedy used to reverse transactions made with credit or debit cards when a fraudulent use has occurred, or when
there is a violation of the contract terms. This method is very popular among online consumers since this is the
main mechanism to transfer money online. In addition, consumers are not required to give evidence to cancel a
payment. The vendor has the burden of proving that the merchandise or service was given according to the contract
terms. Once this is proved the bank makes effective the payment to the vendor.

Chargebacks are largely used around the world by banks and the main credit card suppliers i.e. Visa, MasterCard
and American Express. Yet, the coverage of debit and credit cards varies considerably amongst different
countries. Commonly, debit cardholders have fewer protections than credit card holders, but it also varies
depending on the jurisdiction.

It is then not surprising why credit cards are the major source of payments for consumers in e-commerce. They
provide a remedy that reverses all transactions when a fraudulent use has occurred, or when there is a violation of
the contract terms. However this method has limitations; it offers one single remedy (the return of the payment),
and not all disputes imply a breach of contract or fraud.

Similarly, online payment providers, like PayPal.com, retain temporarily the money paid by a buyer when the latter
makes a complaint within 45 days after the payment was made. PayPal.com holds the money until the dispute is
settled, but only in those cases where the merchandise did not arrive, or the description of the product was
significantly different from the product itself. In these circumstances PayPal.com acts akin to an online
arbitrator. However, in those circumstances where the seller takes away the money from his account before the
buyer makes the claim, PayPal.com will not be responsible for the buyer's loss. Despite this, PayPal is in a very
strong position since in most cases it is able to freeze the amount of money and resolve the dispute providing an
instant and effective enforcement.

Overall, chargebacks intends to balance the inequality of power between consumers and businesses. It is regarded
as a very efficient tool for consumers because the speed, accessibility and lack of charge for their clients, who
would just have to notify their banks or card issuers to cancel a transaction. Thus, Edwards and Wilson suggested
that it would be advisable to focus on developing chargebacks and other soft ODR methods because they are very
effective amongst mainstream consumers. By contrast, the existing processes are considered largely inefficient and
not transparent among businesses because puts businesses in bad light since the onus of the proof rests on them.