Recent Growth and Developments on Online Dispute Resolution in Southeast Asia
Thomas G. Giglione
Co-author Josh Lee
Notwithstanding the continued importance of “traditional” dispute resolution mechanisms such as litigation and ADR, online dispute resolution (“ODR”) has continued to grow in influence and importance as an enabling tool for lawyers in assisting clients with the resolution of disputes.
This development, however, has been patchy at best. Certain regions, such as South-East Asia (“SEA”), do not seem to have embraced ODR as compared to regions like the European Union (“EU”). This is in spite of the sustained explosion in growth of mobile usage and e-commerce in SEA – between January 2016 and January 2017, for instance, the number of internet users and mobile subscriptions in SEA jumped by 80 million and 62 million respectively.
I intend to bring attention to major ODR developments in the EU, and to explore the possibility of applying such developments in the SEA context.
Briefly trace the global development of ODR, and to identify the development phase that ODR is in today;
Identify the latest major development on ODR in the EU, the pan-EU ODR system, and to examine its main features, strengths, and criticisms;
Broadly assess the desirability and feasibility of implementing a region-wide ODR network in SEA, with suitable modifications, if any; and
To this end, identify certain inroads that have been made so far towards the implementation of such a region-wide ODR network in SEA.
I would like to cover (a) by tracing the global development of ODR, and attempt to identify the phase of development that ODR is currently in.
(1) A brief understanding on the global development of ODR and the current phase of ODR development
It has been said that the development of ODR from the mid-1990s to the stage that it is today can be seen in three rough phases. The first phase lasted sometime from 1995 to 1998, the second phase from 1998 to the turn of the millennium, and the third phase has lasted from the early 2000s to the present day. The authors further posit that there are signs that the global development of ODR is currently moving into a fourth phase. We elaborate more below.
The first phase (1990s)
An understanding of the first phase of the development of ODR has to be preceded by an understanding of the Internet at that point in time. In the 1990s, the Internet was largely a US-centred network. As commercial activity was banned on the Internet by the US’ National Science Foundation’s acceptable use policy, the Internet was used mainly by academics for sending email (and, occasionally, file exchange).
Even during this primitive stage of the Internet, dispute resolution processes could already be observed online. They were, however, vastly different from the ODR processes that exist today. These forays into ODR were often on an informal basis – perhaps something that developed organically in the context of online role-playing games or chatrooms. Not infrequently, these dispute resolution processes grew out of online disputes familiar to Internet users of that time, such as “flaming” (defined in the Dictionary of Media and Communications as “the act of posting angry or insulting messages (flames) to an internet newsgroup or other online forum”), or other violations of “netiquette” (defined in the Dictionary of Media and Communications as “a set of rules governing acceptable behaviour for participants in chatrooms and other online forums”). In spite of the nascent formation of online dispute resolution mechanisms, however, there were no formalised dispute resolution systems or institutions devoted specifically to ODR. It is said of that era that “even the term ODR had not yet been invented”.
Nevertheless, the development of ODR received its long-awaited boost when the ban on commercial activity on the Internet was finally repealed in 1995. At this point, disputes related to commerce began to appear, such as the first commercial spam case in April 1994.
The second phase (2000 – 2005)
The early 2000s witnessed the dotcom boom and the growth of the Internet as a medium for commerce. During this period, the concept of ODR began to form, based on the notion that disputes would increase as the range and amount of online activities grew. In particular, new forms of disputes emerged, such as domain name disputes between trademark owners and domain name holders, disputes concerning the legality of hyper-linking between websites, or intellectual property disputes in the copying and widespread sharing of information and media.
With the massive increase in the volume and variety of online disputes, it became increasingly recognised that the world needed online institutions to address digital problems of a nature that traditional dispute resolution mechanisms had never encountered. In this regard, prototype ODR systems (often supported by academics and non-profit institutions) emerged by tapping on the ability of the Internet to bridge physical distances. For example, a project designed by the University of Massachusetts allowed disputants to obtain expertise from a distance by providing an online mediator to resolve a copyright infringement dispute between two parties.
The third phase (2005 – present)
In this phase, commercial entities began to show sustained interest in ODR. This has resulted in the commercialisation of ODR systems, and a steady growth of entities offering some form of ODR. In this regard, big-name ODR systems such as eBay’s Dispute Resolution System began to take form. Other notable ODR platforms that have appeared more recently include Modria, Youstice, Smartsettle and VirtualCourthouse.
At the same time, governments also began to recognise the usefulness of ODR in providing access to justice to a much larger swathe of the population. Both private and public sectors also began to appreciate that ODR could present solutions for problems originating in the online environment.
Adding to the increased optimism towards ODR was the fact that ODR was being employed in a wider range of disputes (and not merely in specific areas, such as domain name disputes, or intellectual property disputes). In particular, the third phase saw ODR supporting and augmenting disputes of all kinds, ranging from business-to-consumer contractual disputes to family and matrimonial disputes.
Such an expansion in the scope and applicability of ODR has been aided, in part, by the improvement of online and communications technologies. For example, faster broadband connections proliferating throughout the developed world greatly facilitated the data transfers that were required for ODR to work (such as the uploading of documents online, and for instantaneous party-to-party communications). A further example was the explosion of mobile technologies in the later part of the 2000s, which resulted in a profound shift of many aspects of life into the online realm. This in turn further accelerated ODR in two ways: (a) the greater digitisation of our lives (such as the storing of all information and data online) allowed ODR to tap on these information in mediating or resolving disputes; and (b) the number of aspects in which ODR could potentially play a role in also increased greatly.
Are we reaching a fourth phase?
Given the gains in ODR over the recent years, there may be questions as to whether the world is entering (or already well within) the fourth phase of global ODR development. While the answers to such questions are likely to be apparent only in a few more years, three key trends that will define the fourth phase of development (as we humbly posit) can be summarised as follows:
(a) Current trends in the third phase are likely to continue. The two key trends seen in the third phase – a growth in the number of entities offering ODR, and the continued expansion of ODR into more industries and fields – are likely to continue. This is due to the continued march of countries and industries towards digitisation.
In fact, it is posited that the number and depth of cases in which ODR will play a role will grow steadily (if not exponentially). Subsequently and gradually, a rough equilibrium is likely to be reached as the global community learns about the areas where ODR will be helpful and appropriate (and areas where it will not).
Further, with increasing support from governments, there is the possibility that ODR could become more commonly seen as a baked-in dispute resolution option in contracts. This would be especially so for contracts concluded online.
(b) Consolidation of ODR. Nevertheless, as ODR gradually becomes accepted as a mainstream dispute-resolution option, common standards as to what a user of ODR can come to expect are likely to take root. In this regard, a few key companies are also likely to emerge as leaders with deep expertise in providing governments and commercial entities with ODR systems.
(c) Increased focus on integrating human knowledge and technology. It is also posited that in the fourth phase of ODR, there will be a focus on fusing innovative technologies such as artificial intelligence and block-chain technology with our understanding of dispute resolution. As a result, ODR is likely to be able to provide better access to justice and an even higher quality of justice.
For instance, the invention of block-chain technologies has propelled start-ups such as Resolve Disputes Online (based in the United Kingdom) to develop platforms that address the needs of mediators, arbitrators, and consumers, while harnessing the potential of block-chain technology.
Regardless of the stage of development that ODR is presently in, the trends point in a consistent direction. The holy grail of ODR being used as a mainstream dispute resolution tool is now closer than ever. In the next article, we turn our lens to the region, and explore the possibility and feasibility of a regional ODR system in SEA.
 The authors are grateful to the work of Rafal Morek, whose work has provided the authors with much insight into the development of ODR over the last two decades. Referenced work: Rafal Morek, “Regulation of Online Dispute Resolution: Between Law and Technology”, August 2005 (unpublished).
 David Chandler and Rod Munday, Oxford University Press, “A Dictionary of Media and Communication”, (1st ed.), 2011.
 Susan R. Harris, Ph.D., and Elise Gerich, “Retiring the NSFNET Backbone Service: Chronicling the End of an Era“, (1996) 10(4) ConneXions.
(Featured Image credit: Mediator Academy Blog)