The future of dispute resolution is online – the rise of ODR
7 Sep, 2022

The future of dispute resolution is online – the rise of ODR

Thabile Fuhrmann, Director in the Dispute Resolution practice at Cliffe Dekker Hofmeyr

The onset of COVID-19 resulted in businesses adapting responsive measures to mitigate its impact on business continuity, whether accessing documents online to conducting business remotely. All industries adapted to this accelerated digital evolution while the legal sector lagged. By chance, dispute resolution is becoming a focal point for the sector.

Traditional dispute resolution is lengthy and expensive and was done in person in the eyes of the court. Today, blockchain technology allows online mediation and arbitration as alternative dispute resolution is known as online dispute resolution (ODR), significantly lowering dispute costs.

ODR is no longer an alternative, but an indispensable norm. With virtual hearings during the pandemic becoming a way of life, virtual hearings will likely remain a post-pandemic reality.

Catapulting dispute resolution into the digital age

ODR is a technology-based extension of dispute resolution which seeks to resolve disputes between parties. ODR also expands traditional means of dispute resolution using technologies into the procedure.

ODR could be the efficient process businesses use for online consumer disputes concerning the remote purchase of goods, or a justice system for small claims in business-to-consumer dealings. ODR facilitates resolutions of disputes, with or without the participation of third parties.

While ODR is not an entirely new concept, it uses sophisticated technology to enhance and replicate existing alternative dispute resolution processes. Disputes from smart contracts should be resolved through online dispute resolution systems.

Asynchronous online mediation has also proven to be the most prevalent form of online mediation, granting the involved parties flexibility and a quicker resolution of the matter as opposed to in-person mediation, which may see a mediation moved to a far-off date because of the parties’ conflicting schedules.

The technical brilliance of ODR

This digital evolution was derived from the synergy between ADR and technology designed to mimic human thought processes and intelligence. The tech behind the process is termed the ‘fourth party’ as it is considered an independent contribution to the management of the dispute.

With the normalising of virtual hearings before and during the pandemic, virtual hearings will likely remain an option post-pandemic. From a dispute resolution perspective, courts are now working in a similar fashion, and everything is becoming paperless.

When a dispute is officially resolved, a hand-signed contract is traditionally expected. This is not necessary for the digital era.

Contracts are getting smart

Smart contracts are digitalised contracts developed through blockchain technology that executes all or parts of an agreement and is a useful tool in ODR.

Computer programmes coded with protocols that can facilitate, verify, execute, and incorporate contractual terms are used to document the agreement between the parties. Blockchain technology encourages trust, security, transparency, and the traceability of data shared across networks while delivering cost savings with new competencies.

This has enabled channels like online dispute resolution to become more acceptable and mainstream, transforming the way we work, interact, play, and resolve legal disputes.



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