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    Online Dispute Resolution: Some Implications for the Emergence of Law in Cyberspace

    Posted by Ethan Katsh

    “What, then, is this law business about? It is about the fact that our society is honeycombed with disputes. Disputes actual and potential, disputes to be settled and disputes to be prevented; both appealing to law, both making up the business of law.This doing something about disputes, this doing of it reasonably, is the business of law.” -Karl Llewellyn


    The tenth anniversary of Lex Electronica largely coincides with the tenth anniversary of two other significant cyberlaw events. The first, the May, 1996 conference on online dispute resolution sponsored by the National Center for Automated Information Research can be viewed as the beginning of the online dispute resolution movement. This is a movement that has grown from a single dispute handled by an entity called the Virtual Magistrate to several million disputes handled by an Internet start-up SquareTrade. The second, also occurring in May, 1996, was the publication in the Stanford Law Review of David Johnson’s and David Post’s seminal article “Law and Borders – The Rise of Law in Cyberspace.”

    The Johnson and Post article launched a rather heated and still ongoing debate. At the risk of oversimplification, one side in this debate holds that authoritative rules for cyberspace can and should come from territorial states.3 The other, articulated by Johnson and Post in their article, argues that there are sufficient reasons for considering cyberspace to be a separate place which can and should make its own rules.

    At a more basic level, the question being asked is what impact the new technologies are having on the authority and power of states to make and enforce law. And at perhaps an even more basic level, the focus is on issues such as what law is and how it emerges and evolves, issues that have a long history and, still, uncertain answers. Given how many disputes are generated by online transactions, interactions and relationships, the development of processes for using the Web for to respond to such problems is deserving of significant attention in its own right. Yet, dispute resolution, an acknowledged core responsibility of law, may, as will be explained below, acquire new responsibilities and characteristics as it develops online. During the period when scholars have been debating whether states will cede any of their sovereign authority to some kind of entity in cyberspace, states have, with relatively little notice, been more than willing to allow dispute resolution processes to migrate to cyberspace. This has occurred not only with no resistance but with some encouragement. It has also been occurring with little understanding that processes that migrate to cyberspace often change as they take advantage of capabilities for communicating and processing information that are not available or employed offline. When this occurs, unintended consequences, for example changes in how and where rules originate, may also occur.

    Consider, for example, a practice that involves some regulation of the flow of information, such as whether a process is public or private. In the offline world, such a decision is embedded in the line separating litigation and what have come to be called “alternative dispute resolution processes.” Litigation is a public process both in the sense that it is open to the public and sponsored by a public authority. At the risk of some confusion, one could also say that it is public (open) because it is public (sponsored by government). As processes of negotiation, mediation and arbitration are employed online, and as the context in which these processes are employed changes, the logic for guaranteeing confidentiality may be less compelling. Such a shift not only affects the process for settling disputes but, if results are public and published, can lead to new ways of standard setting. Were this to occur, it would have implications for the core question in the Johnson and Post debate, namely how effective rules for cyberspace will emerge.

    1. The Growth and Evolution of Online Dispute Resolution While the Internet began in 1969, a need for ODR did not emerge until the early 1990s. For its first two decades, the Internet was used by a limited number of people in a limited number of ways. Those with Internet access were associated either with the military or with academic institutions, and even in those environments, relatively few computers had Internet access. While screens with images and email with advertisements are commonplace today, they were unknown at that time. The World Wide Web was not invented until 1989 and, perhaps even more significantly, the National Science Foundation banned commercial activity from the Internet until 1992.

    In the early 1990s, groups used “listservs” to communicate, and this form of online discussion soon generated “flaming” and violations of “netiquette,” personal attacks that violated generally accepted norms for online discussions.5 Disputes also arose involving participants in role playing games that allowed one to create an online identity and interact with others in a virtual “space.”6 Various online mechanisms were employed to deal with these conflicts, but there were no organized dispute resolution institutions devoted specifically to ODR. Indeed, the acronym ODR had not yet been invented.

    The decision by the National Science Foundation in 1992 to lift its ban on Internet-based commercial activity was highly controversial and enormously significant. After the ban’s removal, disputes related to online commerce began to surface. In 1994, for example, the first commercial spam occurred when two lawyers tried to recruit clients to participate in an immigration scam.7 A few months later, the U.S. Federal Trade Commission filed its first case alleging online fraud.8 The case involved an AmericaOnline subscriber who advertised the following:

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    e-Court Legal Services International LLC ( hereafter referred as e-Court ) has been filed with The State of Delaware on March 27 2010 under number 100324773. The company is an independent group of experienced professionals like (former) lawyers, barristers, solicitors or attorneys, judges, university professors, industry and other legal interest groups. e-Court aims to provide competent, affordable, secure, transparent and speedy justice for everyone.

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