AI-driven Online Dispute Resolution – Arcadia for e-consumers?

Dispute resolution is inarguably one of the areas that have already entered a period of conceptual disruption caused by technological development and the possible proliferation of artificial intelligence (AI) systems. Online dispute resolution (ODR), a conflict handling mechanism that uses technology to facilitate the resolution of disputes, logically might become one of the most targeted areas of AI-driven architectural and conceptual transformation.

An article by Nino Bagashvili

The words of Abraham Lincoln from his notes from a Law LectureDiscourage litigation, persuade your neighbour to compromise where you can. Point out to them how the nominal winner is often the loser… in expenses and waste of time” still stand the test of time in the context of alternative dispute resolution (ADR) and business-to-consumer disputes (B2C). Today the intention for making such a compromise would rather derive from the digital experience of e-consumers and the sufficiency of offered redress mechanisms than human advice itself. 

The UNCITRAL Technical Notes on Online Dispute Resolution 2016 define ODR as “mechanism for resolving disputes through the use of electronic communications and other information and communication technology”. This broad definition of ODR opens doors for the technological advancement and development of consumer dispute redress systems. However, as far as AI systems are not widely deployed in recent ODR mechanisms, it is dubious whether they will bring evolution or revolution to the world of the dispute resolution.

AI – first aid for consumer redress?

The current scale of e-commerce offers consumers and businesses an inviting universe of possible connections. The B2C e-commerce sales worldwide amounted to 3.53 trillion US dollars in 2019 and are projected to grow to 6.54 trillion US dollars in 2022. The increased popularity of online transactions and shopping inevitably increases the number of disputes too. Thus, not surprisingly the ODR has been gaining wider recognition in conflict resolution, especially in the context of small-value cross-border B2C disputes. However, at the end of the day, the ever-growing and global e-marketplace of consumer goods and services could also bring significant disconnections for its stakeholders. Considering the borderless nature of the internet, cross-border consumer disputes have become a by-product of e-commerce. Consequently the scope of these ODR services have gradually extended and gone from restricted online services to technologically sophisticated redress mechanisms and the claim handling system of eBay is an outstanding example of such extension. The dispute resolution system of eBay has been deciding over 60 milliondisputes per year and mostly without human intervention.

Although ODR has been more strongly supported by the business sector where it first evolved, the judiciary also considers that access to justice could be significantly improved by a broad solution combining ODR and AI.

AI – the fourth party at the ODR table?

The role of of technology in ODR was originally introduced by Ethan Katsh and Janet Rifkin in 2001: In their book “Online Dispute Resolution” they describe technology as the fourth party sitting at the table, alongside party one and party two – the disputants, and the third party – the human neutral (a mediator or arbitrator). The potential role of AI as a fourth party in ODR makes us think about a future where the capabilities of the fourth party will become crucial in helping the consumer and businesses to find fair and just outcomes to their cases with the assistance of technology.

The spectrum of technologies used in ODR is broad; however, currently there are two detectable directions in their usage:

1. “Using technology to support or enable existing manual processes of administering dispute resolution – incremental improvement, efficiency gain or value-add in existing legal or negotiating dynamics”;

2. “Using the technology to fundamentally re-engineer the dispute resolution process, delivering resolution in new ways”.

The deployment of AI and machine learning in ODR processes assuredly has an auspicious potential in both usage scenarios.  Nevertheless, the second dimension might have a higher potency for raising ethical and moral dilemmas. Is AI based ODR the denial of true essence and magic of alternative dispute resolution? Does it have a capability to meet the procedural justice requirement? What is AI likely to do in redress mechanisms that are focused on combined values of legal rights, fairness, human interaction and mediation? Where do these developments leave us and what will their impact be? Even: Could AI be present at the mediation table as an artificial negotiator and chair a mediation session?

Considering the current deployment tendencies of ODR, the private sector has certainly started to address some of these questions by self-regulation schemes, unlike public sector that is practically less active in deploying new redress mechanisms. For example, E-bay has been at the forefront of online dispute resolution for more than a decade. 

The United Nations Guidelines for Consumer Protection (UNGCP) is the first manifestation of international consensus in the field of consumer protection. The revised UNGCP of 2015 expanded the section of consumer redress aiming to facilitate access to justice by transforming traditional redress mechanisms towards a broader access to justice approach, especially in the field of low-cost B2C disputes. Another, policy initiative belongs to the European Union. Although EU Online Dispute Resolution (ODR) Regulation created new obligations for the European online businesses, the deployment of ODR technologies is not yet sufficiently prevalent in B2C disputes.

Do fair procedures assure consumer satisfaction? 

B2C conflicts are part of a growing industry where consumer redress and the effectiveness of outcomes depend not only on the market forces involved but are driven by norms of consumer behavior, expectations, competencies, and confidence as well.

In their book “The New Handshake: Online Dispute Resolution and the Future of Consumer Protection” Amy J. Schmitz and Colin Rule Schmitz go on to explain the concept of “inertia” that e-consumers are suffering from. The authors claim that the concept of “inertia” obstructs consumers from pursuing a claim if it would require them to hire an attorney or to file a claim in court or with an arbitration association. Furthermore, the authors consider that the speed of the internet, the immediacy of searching, ordering, and receiving products make consumers lazy when it comes to reading legal language. The behavioral inertia prompts consumers to look for redress mechanisms that are as easy as the purchase process itself. Unlike litigation, the outcome-thinking approach might prevail over the procedural justice requirement in ODR and the consumer-centric approach will likely push it to become a new sympathetic “Silicon Valley” for AI deployment.

Conclusion

Cassie Kozyrkov, a chief decision scientist of Google, compares AI to the “proliferation of magic lamps” and assumes that “unlike traditional programming, they allow you to solve a problem even if you can’t think up the solution’s steps yourself”. Unlike traditional litigation, AI-based ODR mechanism might be more consumer-centric allowing them to formulate and express their claims with simple objectives instead of explicit legal justifications. The outcome-oriented system might be perceived as a “consumer arcadia” where they are able to follow the behavioral inertia of the digital environment and claim their rights just in as user-friendly way as that they purchase goods.

In order to develop intelligent techniques for efficiently redressing e-consumer disputes, we might need to integrate AI-based problem-solving techniques with ODR. Firstly, AI as a tool has an evolutionary potential to gradually develop ODR and help the parties and the decision-makers to obtain the best possible results in solving commercial disputes. Secondly, AI as an autonomous dispute resolution mechanism supported by a knowledge base and decision capabilities has a revolutionary potential to fully transform ODR. The algorithmic mediator is not as far away as it might seem, and if deployed correctly, it will be a crucial instrument for delivering fast and fair resolutions to consumers around the globe.

Published under licence CC BY-NC-ND. 

Author

  • Nino Bagashvili is a Ph.D. student and a teaching assistant at the School of Law of the New Vision University, Georgia. She also works for the Supreme Court of Georgia where she has been involved in the automation of court services. Her fields of interest are consumer law, the automation of litigation, and AI perspectives in the judiciary.

Nino Bagashvili Written by:

Nino Bagashvili is a Ph.D. student and a teaching assistant at the School of Law of the New Vision University, Georgia. She also works for the Supreme Court of Georgia where she has been involved in the automation of court services. Her fields of interest are consumer law, the automation of litigation, and AI perspectives in the judiciary.