It was in the year 2000 that international disputes were first decided completely online. The parties to those disputes, located in different countries, did not meet. They exchanged correspondence, pleadings and evidence online under the attentive eye of a neutral decision maker appointed by an organization that was itself located in a different country. These were domain name disputes decided according to the dispute resolution policy and rules1 of the Internet Corporation for Assigned Names and Numbers (ICANN) and administered by eResolution. The latter was the first organization to offer a completely online resolution service for domain name disputes. Later in the same year, another organization, SquareTrade, 2 launched a programme offering online mediation services for disputes among users of eBay auction services, 3 through which tens of thousands of disputes would be resolved. 4

Today, using information and communications technology to settle or at least to assist in settling disputes remotely seems like a natural path that might still raise a few questions but generates little hesitation. It was not always this way. The present publication, which includes a presentation of ICC's new Netcase facility, provides an ideal opportunity to look back at the history of ODR and to offer a few thoughts about where it might be heading.

1. History in a nutshell

The very first experiments with online dispute resolution (ODR) all go back to 1996, when university researchers were thinking hard about how the Internet was going to affect the international legal landscape.

The Internet obviously gives rise to difficult questions concerning jurisdiction, applicable law and means for enforcing legal obligations. How could greater legal certainty be provided for transactions on the Internet? These transactions, which all involve the transfer of information, frequently take the form of electronic commerce (between businesses or between businesses and consumers), affect intellectual property licensing regimes, involve privacy issues (exchange of information subject to privacy regulations), and pose serious trademark problems (domain names). In short, a whole cluster of legal relationships are established through transactions involving information. However, an appropriate legal framework was lacking. So, why not use the medium itself to solve the problems it appears to create? Why not take advantage of the technological capabilities of communication on the network of networks to eliminate the difficulties in establishing an effective legal framework for such communication? Why not use [Page8:] the Internet to deal with the problems that arise there, particularly with respect to the delocalization of the parties, the distance separating the stakeholders, the intangibility of information and the resolutely international nature of information transactions?

Means of building trust on the Internet had to be found. It seemed that legal risk could be reduced only if recourse were possible and sanctions enforceable when parties failed to fulfil their obligations. If it proved impossible for law to reform situations detrimental to the legal interests of Internet users, there was a strong risk that they would desert cyberspace. Such were the preoccupations behind the first ODR experiments detailed below.

Virtual Magistrate

Launched in March 1996, Virtual Magistrate was the first online arbitration service of its kind. It was a pilot projet born out of collaboration between the Cyberspace Law Institute (CLI) 5 and the National Center for Automated Information Research (NCAIR) in the USA. The aim of the project was to deliver a speedy and voluntary online arbitration procedure to resolve disputes involving:

• users of online systems;

• those who claimed to be harmed by wrongful messages, postings or files; and

• system operators. 6

More specifically, the project's mandate was:

- to establish the feasibility of using online resolution for disputes that have originated online;

- to provide system operators with informed and neutral judgments on appropriate responses to complaints about allegedly wrongful postings;

- to provide users and others with a rapid, low-cost and readily accessible remedy for complaints about online postings;

- to lay the groundwork for a self-sustaining, online dispute resolution system as a feature of contracts between system operators, users and content suppliers (and others concerned about wrongful postings);

- to help define the reasonable duties of a system operator confronted with a complaint;

- to explore the possibility of using the Virtual Magistrate project to resolve other disputes related to computer networks; and

- to develop a formal governing structure for an ongoing Virtual Magistrate operation. 7

Virtual Magistrate's primary objective was to study the resolution of disputes between users and network operators or Internet service providers, and among users themselves. It was set up with a view to preventing situations in which network operators render decisions in cases in which they are stakeholders, making them both judge and party to the dispute. Its scope therefore did not extend to all disputes pertaining to electronic commerce.

The arbitration process was conducted for the most part by e-mail. To submit a dispute to Virtual Magistrate, complainants had to answer a questionnaire, in which they were required to provide the parties' details and to describe the subject matter and factual background of the dispute and the solution sought. [Page9:] Next, Virtual Magistrate made a commitment to do all it could to render a decision within 72 hours of receiving the complaint. Complainants were charged a fee of $10 intended to discourage frivolous action.

Of course, as in the case of proceedings occurring in the physical world, the process was voluntary and based on the parties' consent to submit the dispute to arbitration. 8 A network operator could therefore agree to insert a clause in its contract with the user committing them to submit any future dispute to Virtual Magistrate or allowing the user to opt for it if a dispute arose. It was also possible for the network operator to declare itself bound by the conditions that would be set in the decision to be made by the Virtual Magistrate arbitrator. 9 However, this decision was not meant as an award that would be enforceable within the meaning of treaties on the recognition and enforcement of arbitral awards. 10

Virtual Magistrate's scope was limited to disputes generated by messages and files with illegal content, such as counterfeit ownership of intellectual property, illegal appropriation of commercial secrets, defamation, fraud, unfair competition, posting of inappropriate (obscene or hate) material and violation of privacy. Thus, the arbitrator had to decide whether it was reasonable for a network operator to destroy, mask or restrict access to a specific message, file or transmission. In extreme cases, the Virtual Magistrate arbitrator would have had to decide whether the network operator had acted appropriately in refusing specific individuals access to an electronic environment.

The arbitrators had to take into account the information available, the code governing the network in question, the contracts binding the parties and the applicable law. Note that they were not required necessarily to apply the law of a given jurisdiction. Instead, they had to consider the circumstances of each case, the parties' points of view on the applicable law and appropriate solutions, and what would happen if the dispute were referred to a judicial or arbitral tribunal. 11

Virtual Magistrate's decisions were to be posted on the Internet, specifically through the Villanova Center for Information Law and Policy server. Whilst the decisions were therefore to be made public, the process itself remained confidential.

As it turned out, Virtual Magistrate rendered only one decision. The service was not very popular, probably because there were no prior agreements to use the service and its technology was generally fairly primitive, involving as it did the exchange of non-secure email messages. Also, its scope was very limited as disputes arising out of economic relationships created through electronic transactions, for which arbitration seems to be the most appropriate solution, were excluded. It is likely that those disputes for which it was intended - user disputes over the distribution of offensive or inappropriate messages - are better dealt with through mediation. The Virtual Magistrate project is now maintained under the auspices of Chicago-Kent College of Law, Illinois, USA.

Online Ombuds Office

The Online Ombuds Office project was an initiative of the Center for Information Technology and Dispute Resolution at the University of Massachusetts, USA. 12 Since 1996, the organization has been offering mediation services for certain disputes arising on the Internet, such as those: [Page10:]

• between members of discussion groups;

• concerning domain names;

• between competitors;

• between Internet access providers and their subscribers;

• concerning intellectual property.

The purpose of the project was to develop mediation services that use the advantages of cyberspace to find better ways to process disputes arising in that environment and spare stakeholders the hassle and cost of judicial proceedings.

More specifically, research was conducted on the use of texts and graphics to assist the parties in their resolution efforts. Settlement suggestions are sent to the parties, who use dynamic graphics and other technological tools (that can appear rather playful at first) to assess the nature, source and degree of their disagreement, and to help pinpoint what exactly they wish to obtain from one another. This is an example of an experiment in using technology to assist decision-making. The Office is still maintained today.

CyberTribunal

CyberTribunal was launched in September 1996 by the University of Montreal's Centre de recherche en droit public (CRDP). 13 Its purpose was to explore the feasibility of using alternative mechanisms to resolve disputes arising in electronic environments. It resulted in a groundbreaking dispute prevention and resolution service employing mediation and arbitration.

The project was the product of an institution located in a country with two legal traditions, where jurists are confronted with legal biculturalism to greater or lesser degrees. The dual influence of civil and common law is clearly very important in a field where comparative analysis is growing in importance. While geographical borders seem to be disappearing, one cannot ignore that cultural and legal boundaries remain. The services of CyberTribunal were offered in French and English.

CyberTribunal's area of activity was much broader than that of Virtual Magistrate and Online Ombuds Office, although limited to disputes arising in electronic environments. Despite its name, CyberTribunal was not a court. Its purpose was rather to facilitate discussions between the parties to a dispute (mediation) and, when necessary, to provide administrative and technological assistance in a decision-making process based on the parties' consent (arbitration). Each party to a dispute had to agree explicitly to submit the dispute to CyberTribunal before or after it arose. The CyberTribunal mediators and arbitrators included jurists and non-jurists (mainly lawyers and university professors) specializing in mediation, commercial arbitration and information technology law.

CyberTribunal had devised software that guaranteed the confidentiality of the process for users so that the information concerning each case was accessible only to those concerned. A conciliatory approach was adopted, with CyberTribunal promoting the use of mediation rather than arbitration. Where parties were bound by a CyberTribunal arbitration clause, this approach allowed them to use mediation first, if they both accepted CyberTribunal's invitation to do so.

CyberTribunal's electronic site had four modules: reception, mediation, arbitration and the Secretariat. The reception module included a section with general [Page11:] information on CyberTribunal, as well as forms for filing a case. A case was initiated using a request form in which the party recorded key information, such as contact details, the nature and circumstances of the dispute, the purpose of the request and the solution sought. The form was encrypted and sent to the Secretariat, which usually assigned a mediator who took charge of the case. The mediator then contacted the respondent, explained the nature of the complaint and asked the respondent to participate in the process. Of course, the mediator's task was facilitated when there was a prior agreement between the parties. Otherwise, the mediator had to persuade the respondent to participate in the exercise. The mediation module received the parties who had agreed to participate in the process. The mediator communicated with the parties and a secure electronic environment was assigned to them in accordance with the conditions and methods established by the mediator. The arbitration module operated in an environment incorporating functions similar to those of the mediation module. However, the process was structured by more formal rules that were inspired by the rules of procedure generally used in commercial arbitration, such as the arbitration rules developed by the United Nations Commission on International Trade Law (UNCITRAL) and the International Chamber of Commerce (ICC). Since simplicity, user-friendliness, speed and fairness were sought, it was also possible to accelerate the process with the parties' consent. The rules of procedure were incorporated into the module so that the parties could participate in the arbitration process without necessarily referring to the rules. In other words, the process was designed to streamline case processing for the parties and the arbitral tribunal. On the site of the case in question - the central electronic environment for the case - the parties and arbitrator could find all relevant information, correspondence, procedural documents and evidence, and could communicate with one another and send documents in a completely secure manner.

As one of the very first experiments in this field, the CyberTribunal project initially generated a great deal of scepticism in the legal community. At the time, most lawyers could not imagine how technology could be used to conduct either arbitration or mediation without the physical presence of the parties. Their presence seemed necessary at every step of the process. In the world of legal thinking, the behavioural grammar of disputes required that the parties or their lawyers see each other.

CyberTribunal was based on the following postulates: 14

• With the spread of various information transactions on the Internet, conflicts will arise that traditional national law will not be able to handle owing to the a-territorial nature of cyberspace.

• In the open environment of cyberspace, no authority can claim to have a monopoly over establishing or enforcing rules; parties are often able to move elsewhere to escape rules that do not suit them.

• Mediation and arbitration processes, as well as other dispute resolution methods, at least partially help to establish frameworks and processes through which rules may be applied in cyberspace.

Appropriate dispute prevention and resolution mechanisms, based not on government regulations but on other mechanisms designed to ensure effectiveness, are a necessary component of the framework for transactions in cyberspace. [Page12:]

The postulates were confirmed over time. They justified the strategic choices made in the CyberTribunal project. It became clear that the best means of offering recourse to Internet users lay in alternative dispute resolution (ADR), particularly mediation and arbitration. 15 These flexible, a-national means were embodied in a software program that followed very simple rules: user-friendliness and transparency. Users were able to employ the interface on their own to institute mediation or arbitration proceedings. Help pop-ups and hypertext links allowed them to take full advantage of the mechanisms available. This took care of user-friendliness. For the rules to be transparent, users had to be able to navigate in the system and resolve disputes without having to refer to the mediation or arbitration rules. The rules were integrated into the system and interface to make them easier to use. For example, when writing to an arbitrator within the system, a party would find that the name of the other party appeared automatically in the carbon copy line of the message: the software was thereby implementing a communications requirement of the arbitration rules irrespective of the parties' knowledge of such requirement.

The CyberTribunal experiment proved conclusive because it successfully resolved a significant number of disputes. The initial hypothesis, that it is possible to use electronic environments to resolve disputes, was verified empirically. However, it has to be acknowledged that CyberTribunal was a limited exercise. Its experimental nature and the university base from which it was started both imposed certain constraints and prohibited broader deployment. The validity of the concept was demonstrated, but it still had to be embraced by the legal community if it was to be used in a more formal legal context. 16

The experiment ended in December 1999, when a new project was set-up: eResolution. CyberTribunal helped to resolve over a hundred disputes. In addition to making unprecedented use of secure environments for electronic exchanges in dispute resolution, the project was the first ODR experiment to integrate mediation and arbitration services into dedicated online delivery software. The CyberTribunal platform is now being used to initiate students to online dispute resolution. 17

eResolution

Disputes over domain names, which generally pit a trademark holder against a domain name owner, provided a life-size testing ground for ODR. The dispute resolution policy and rules adopted by ICANN in October 1999 apply virtually to all global domain name owners. Self-implementation and self-enforcement of the policy and rules are possible through contract because ICANN accredits all of the registrars (the companies in charge of registering names in the top-level domains such as '.com', '.net' and '.org'). 18 Since domain names give rise to real disputes and ICANN has a formal dispute resolution framework built into its contracts with the registrars, which must in turn include it in every registration agreement, it was possible to take online dispute resolution beyond the experimental stage. On 1 January 2000, eResolution was accredited by ICANN under the policy and thus became a certified dispute resolution service provider for domain name disputes. 19

At the outset, eResolution was the result of North American university researchers working together to prevent the World Intellectual Property Organization (WIPO) from gaining exclusive control over the domain-name dispute resolution process. WIPO, which had written the Final Report of the First WIPO Internet Domain Name Process20 at the request of the American government, was entertaining the notion [Page13:] of a monopoly over this freshly minted dispute resolution process, and was happy to put its brand new and so far unused Arbitration and Mediation Center to good use. Professors Michael Froomkin (University of Miami), David Post (Temple University), Ethan Katsh, Janet Rifkin (University of Massachusetts) and Karim Benyekhlef (University of Montreal) therefore decided in July 1999 to join forces to ensure that there would be competition with respect to the domain name dispute resolution process. 21 The CyberTribunal experimental system was employed by eResolution to build a software module integrating ICANN's policy. 22

The UDRP procedure happened to lend itself to online case administration and therefore offered a perfect opportunity for the real-life deployment of an ODR system. 23 First and foremost, it was a document-based procedure that does not involve hearings. At a time when web-based videoconferencing was not satisfactory and traditional videoconferencing was still relatively expensive (a situation which has not changed as quickly as most had predicted), a document-based system provided the ideal opportunity to test an online tool for managing dispute resolution processes. Second, the UDRP procedure had the rare dual advantage of relatively simple subject matter but very broad international deployment. On the one hand, potential results were limited to the cancellation or transfer of a domain name registration since the often more complex issues relating to the assessment of damages (which were not available under the system) had been set aside from the beginning. On the other hand, the international nature of a large proportion of the cases made it possible to experience problems specific to international proceedings, such as those pertaining to language and applicable standards. Finally, the procedure's self-enforcing nature eliminated all problems related to the implementation of decisions: the registrar is bound by contract to 'enforce' every decision, for instance by transferring the registration of the name to the complainant where ordered.

Yet the only dispute resolution provider that took advantage of the opportunity to transform the UDRP procedure into a veritable online process was eResolution. The technology set up by this service provider enabled the parties, decision-makers and case administrators to do online what others did on paper. This included registering cases, filing complaints, filing responses, uploading and consulting exhibits and evidence, exchanging correspondence and conveying decisions. Parties could upload non-digital documents at their convenience using the fax-server made available to them on three continents. Decision-makers could consult and take action on all of their cases remotely. All exchanges took place in a secure environment that required a user name and password for access and where information and documents were organized and arranged in accordance with the parties' specific needs. Overall, this fully online system was well received by users24 and was marked by a respondent participation rate that was systematically and significantly higher than that which prevailed with other providers. 25 One of the reasons given for this statistical difference is that the online system makes it easier to prepare and submit a response. 26 Whether or not this is the case, it is certain that use of electronic means of communication and remote records management in the UDRP procedure can only increase. [Page14:]

The reason why eResolution ceased administering domain name disputes in November of 2001 is the phenomenon of forum shopping, which was in turn caused by the apparent partiality of some providers. These are the two main sources of criticism levelled against the UDRP procedure. 27 A number of studies, the first of which was published in November 2000, 28 had gradually shown that the claimant success rate was considerably higher with some service providers than with others. For example, WIPO and NAF had higher rates of complainant success than eResolution. The difference can be explained by an 'open' interpretation of the texts, which was favourable to complainants at WIPO and NAF but closer to the letter and the spirit at eResolution. 29 Fear of forum shopping and the appearance of partiality were confirmed in August 2001 in an in-depth and widely distributed study by Michael Geist, who showed that a claimant had a significantly greater chance of winning with WIPO and NAF than with eResolution. This was reflected in the respective market shares of the providers: WIPO had 58%, NAF 34% and eResolution 7%.30 The numbers were disturbing in themselves, but the study went on to show that the WIPO and NAF panellists with the highest proportion of decisions in favour of claimants were on average appointed more often. 31 For example, according to the study, the six panellists most often appointed by NAF rendered decisions in 53% of the provider's cases, with an average of 94% of decisions in the claimant's favour! 32 These data have been confirmed with the passage of time. 33

There is little point in dwelling on the actuality of bias in the application of the UDRP because when it comes to justice the mere appearance of partiality is sufficient to render the process invalid. 34 Clearly, the system has to be reformed. The arguments in favour of having providers compete with one another originally had to do with better quality service, market-controlled prices and free choice for all users. The only way to meet these objectives while avoiding the problem would be to involve respondents as well as claimants in selecting the provider. This would require a larger number of providers and recourse to a third party (or the random choice of an algorithm) in case of disagreement. It would, most of all, require ICANN to do something about the problem. 35 Competition would then have the specific and commendable effect of encouraging providers to ensure that they favour neither one side nor the other.

But our focus here is online dispute resolution, the feasibility of which was clearly shown by eResolution with respect to international disputes involving business interests. [Page15:]

SquareTrade

Founded in 2000, SquareTrade operates almost exclusively in consumer-to-consumer (C2C) electronic commerce. It is a United States company which offers two levels of dispute resolution services: direct negotiation and mediation. When SquareTrade was launched in March 2000, it was a pilot project, but its partnership with eBay, one of the largest auction sites in cyberspace, quickly brought it a great deal of business. The agreement with eBay was changed into an exclusive contract in August of the same year, and the number of cases submitted to it has been growing steadily since then. Thousands of disputes have been resolved using the SquareTrade platform.

In order to submit a dispute arising out of an eBay transaction, the complainant has to create a user account in the SquareTrade system. The very user-friendly procedure encourages an out-of-court settlement at every step.

First, the buyer or seller submits the complaint to SquareTrade by entering all the relevant information on an electronic form. Next, the other party is informed by email that a complaint has been filed against him or her, and he or she is given the option to respond. Note that the other party has no legal obligation and is not bound to answer the complainant's claims. If the party chooses to respond, however, SquareTrade makes the complaint and response forms available on a secure site that can be accessed by a password and user name. At that stage, the parties can try to resolve the dispute out of court using SquareTrade's direct negotiation procedure and technology. SquareTrade's staff plays no part in any stage of the negotiations.

It should be noted that the negotiation process uses electronic forms designed to help the parties identify problems and solutions that could lead to resolution of the dispute.

If the parties are unable to find common ground, they can ask SquareTrade to assign a mediator, which involves paying a modest fee. The mediator helps the parties by suggesting solutions to the dispute in light of their interests and the specific circumstances of the case. The reasoning behind the suggestions is also conveyed to the parties.

If the parties come to an agreement before or after the mediator takes action, the dispute is resolved and the parties are sent a document notifying them of the solution. The agreement can become binding if both parties so agree. However, it remains confidential and is not posted on SquareTrade's public site.

The SquareTrade system has shown that disputes between consumers can be resolved online. It has also shown the usefulness of a structured negotiation system in which the consumer is, in a way, guided by technology. Better yet, SquareTrade continues to show that the simple intervention of a neutral third party, even if it is only a system that sends emails without human intervention, can help parties to resolve disputes. Indeed, according to the company, most of the disputes resolved using the system are settled before a mediator has to be assigned.

In the eyes of many, the CyberTribunal experiment, followed by those of eResolution with respect to business, and Square Trade with respect to consumers, confirmed the feasibility and utility of employing information and communications technology to solve disputes on the Internet. The number and [Page16:] variety of online dispute resolution service providers today tell the rest of the story. 36 But the above summary of ODR's first years fails to portray the sudden acceleration and passage from almost total scepticism to virtually unlimited faith, from confirmed reticence to wholehearted endorsement that have been witnessed. It is surprising to see the rapid acceptance of the principle of remote dispute resolution by almost all of the major stakeholders. Governments, international organizations, business associations and consumers' advocates now fully acknowledge the need to use ODR in establishing legal certainty and trust for e-commerce. But it would probably be a mistake to limit our analysis to the area of e-commerce, as is suggested below.

2. Prospects

The reservations that are expressed most often with respect to ODR, and which still remain in the minds of many lawyers, are related to the physical presence of the parties during legal proceedings. In the case of domain name disputes, for example, the proceedings took place in the parties' absence. The parties met neither each other nor the decision-maker in person. Obviously, they could contact each other by email, fax or even telephone, if required. However, communication passed first through a web site reserved for the case and which the parties, decision-maker and case administrator could access using a password. The parties could use the site to file complaints and responses, contact each other, the arbitrator and the case administrator, upload evidence, suggest settlements, manage their respective files, etc. Conducting the proceedings in the parties' absence is not, contrary to what one might think, an essential feature of ODR. The parties can meet, if required. This does not detract from the notion of ODR because putting even part of a procedure online saves significant amounts of time and money. Yet, why is physical presence a recurring theme among those who resist adoption of ODR?

From e-commerce to ODR

Beyond obvious and contingent arguments, such as the traditional importance of cross-examination in a common law process, a likely explanation for the persistence of physical presence as a theme lies in the deep ritualization of the legal process in general. If the parties are absent, there is a loss of theatricality, and this troubles some lawyers. Law remains even today one of the most ritualized functions of social life. 37 Ritualization lies at the very heart of the institution; it is an integral part of it and often provides a justification for the judicial act itself. The act of judging thus normally requires its own space, which plays an important role in the staging of justice. 38 Whence the central psychological hurdle which ODR comes up against: ADR mechanisms cannot escape ritualization because their purpose, particularly that of mediation, is primarily to reconcile the parties, and the behavioural grammar of reconciliation requires a physical meeting. 39 Such rituals still live on in the legal mind, and even though they are sometimes devoid of any practical rationality, 40 they operate so deeply in the collective psyche that they appear unavoidable and necessary. 41

That is perhaps the central reason why ODR was so quickly embraced by those who were primarily concerned with electronic commerce and the Internet. They were accustomed to - and even celebrated - the delocalization of activities and [Page17:] rituals traditionally performed in one physical place. That is also most likely why ODR was first conceived as a solution to problems caused or exacerbated by the development of the Internet. ODR was seen as a kind of justice made especially for a new place in need of trust and legal certainty. It was assumed in that context that by creating the sense of a formalized virtual space for a tribunal, access to which is heavily controlled, in which protocols are followed in the presentation and treatment of information, technology could reproduce and adapt the ritualistic aspects of justice and ensure that nothing essential would be lost.

The Internet-based marketplace is one clearly delineated virtual space where an ODR system might eventually play the role of the virtual court house. Virtual marketplaces are one of the most prominent forms of e-business. 42 Generally, they consist of a portal devoted to a specific sector of activity that links buyers and suppliers electronically to facilitate commercial exchanges between them. It is often a three-way relation between buyers, sellers and a 'neutral' third party operating the market place. 43 The model enables major savings by significantly reducing the cost of production and supply. To the extent that such marketplaces function like traditional trade associations, they are in a position to solve the conundrum of cross-border justice by integrating a compulsory dispute resolution system (culminating in arbitration where necessary) into the structure, legal and technical, of the market, thus making an ODR system the default jurisdiction of that virtual 'place'. 44 After all, it seems logical to offer those who sign electronic contracts the possibility of recourse in the same medium when disputes arise. Also, electronic solutions for resolving disputes can be developed to meet the specific needs of each type of electronic marketplace so that the details of the particular dispute resolution system are attuned to commercial practices of the relevant sector of activity, thus increasing the effectiveness of the ODR mechanisms deployed in each market.

Beyond e-markets, the potential for development of ODR in e-commerce is very significant indeed. But it concerns mostly consumer transactions, which I do not propose to address here, and business transactions involving small and medium-sized enterprises, to which I propose to revert presently.

If e-commerce forms one conceptual area in which the need for ADR in general and ODR in particular seems clear, traditional commerce forms another that should not be overlooked. As the distinction between e-commerce and commerce gradually fades away, so too will the relevance of the distinction between ODR and ADR. When all is said and done, there remains one concern for every stakeholder: to improve cost-efficiency using available means and tools without putting the fundamental principles of justice in jeopardy.

From ODR back to ADR

Traditional civil and commercial law is becoming less accessible because it is often too expensive and imposes unreasonable time frames. In recent years, the delivery of justice has become something of a booming industrial sector. The skyrocketing volume of litigation can be explained partly by population growth, increased trade and more crime, as well as by greater regulation of human relations. These realities translate not only into an increase in the number of disputes but also into longer case processing times in courts and a proportional increase in the cost of ensuring proper administration. The situation is such that some organizations, such as the United States Chamber of Commerce's Institute for Legal Reform, 45 have adopted a mandate to try to control the burgeoning [Page18:] growth in litigation. In the United States alone, over 10 million new cases are brought before the courts each year. 46 There alone, costs related to the administration of justice are estimated at over US$ 200 billion. 47 The resulting congestion in the courts and growing costs have to be dealt with, and there seem to be two available solutions.

In cases where recourse to the courts cannot be avoided, 48 the first solution - namely automation of various stages of the judicial process - makes it possible to increase the efficiency and speed of dispute management by the courts. As early as 1992, Henry Perrit noted that government use of new information technologies would increase the efficiency of the process, citizen participation and procedural guarantees. 49 Through an electronic network, it is possible to facilitate the management of cases before the courts so that all involved in the proceedings can communicate with one another, exchange information, consult files, make decisions and notify the others of those decisions, etc. Computers and secure networks are in fact today causing a veritable, albeit somewhat delayed, revolution in the administration of justice. The many shortcomings in the delivery of state justice today should be somewhat alleviated by electronic tools that take much of the administrative and procedural work off the hands of facilitators, lawyers and decision makers so that they can spend more time settling cases, which is after all their primary task. But let this not be our concern here. 50

The second solution involves ADR. More and more stakeholders are realizing that there is a wide range of alternatives to the courts when it comes to solving conflicts efficiently, and that some of them even complement court proceedings. As Nabil Antaki noted some time ago, 51 the apparent monopoly of state courts is a thing of the past:

Today, we are far from the time when legal recourse was considered the only way to guarantee rights and provide sufficient certainty and predictability. At that time, alternative methods were viewed with suspicion. It was claimed that they offered cheap justice and were unhealthy competition for the public legal system. This concept is outmoded. Several years ago we entered an era when a diversity of forums and procedures and a wide range of notions of law and justice are allowed . . . The new forms of justice are now just as recognized and legitimate as traditional justice.

There is a broad consensus on the advantages that ADR offers over a judicial system that is becoming less and less accessible owing to growing costs and delays. Alternative dispute resolution mechanisms decongest the courts and reduce the cost to society of administering justice while providing the parties with substantial savings in time and money because of the flexibility of the procedures. Indeed, that flexibility gives the parties greater control over the process, as is well known.

But with the spread of information and communications technology, alternative mechanisms are expected to become even faster, cheaper and more efficient. Though long confined to the physical world, negotiation, mediation and arbitration must now demonstrate the flexibility, malleability, speed, facility and economies that have always justified their existence and made them a success. In other words, it now seems primordial to adapt these much-touted institutions to electronic environments so that they can maintain all of the qualities that have made them the preferred means of resolving international trade disputes. In international arbitration circles particularly, the advantages conferred by the New York Convention upon arbitral awards over court judgements make the temptation of complacency very strong indeed. A discussion of ODR is a good occasion to recall that arbitration has other advantageous features that need to be preserved in [Page19:] order for it to remain attuned to the needs of commerce. These include, most obviously, speed and economy.

As traditional ADR institutions gradually acquire online case management capabilities, it is therefore well to point out that the international dispute resolution market is changing. Leaving aside the fast-increasing number of disputes that arise out of investment treaty provisions and concentrating on business-to-business issues, it can fairly be said that we have been witnessing a massive influx of new business operators on the international arena. 52 Thanks to trade liberalization on the one hand and the recent availability at low cost of information and communications technology on the other, small and medium-sized enterprises (SMEs) are going international in all areas where no rationale remains for localized markets. Given that business transacted by SMEs represent the bulk of all commerce on the planet, this is a very significant phenomenon indeed, one that will irreversibly change the make up and complexion of international commerce. 53 This means essentially a much greater number of international disputes than before, and a significantly lower average disputed value than previously known in international commerce. 54 This should require adaptation on the supply side of the dispute resolution services market, an adaptation that information and communications technology can greatly facilitate.

If it is clear that great benefits will be derived from using information and communications technology to manage large international cases, it seems even clearer that such technology, in the form of ODR, has the potential to open up a largely untapped dispute resolution market, one which, from the point of view of SMEs, badly needs to be catered to. 55 It is a matter of helping release tremendous economic potential at the international level. 56 In the long run, facilitating the resolution of small and medium-sized cross-border claims might very well turn out to be the greatest contribution of ODR to the world economy.

1
See <http://www.icann.org/udrp/>

2
<http://www.squaretrade.com>

3
<http://www.ebay.com>

4
See <http://www.squaretrade.com/>, click on 'About us'.

5
It should be noted that the project leaders, Henri Perritt and David Johnson, are both members of the Cyberspace Law Institute.

6
The Virtual Magistrate Project, 'Concept Paper' (26 February 1996), available at <http://vmag.org>

7
ibid.

8
The arbitrator's jurisdiction could be derived from the parties' consent.

9
See <http://vmag.org/>

10
See generally C. Jarrosson, La notion d'arbitrage (Paris: LGDJ, 1987).

11
ibid.

12
See <http://www.odr.info>

13
The project was initiated by Professor Karim Benyekhlef with the collaboration of Professor Pierre Trudel; both professors are members of the University of Montreal's Centre de recherche en droit public.

14
K. Benyekhlef & F. Gélinas, Le règlement en ligne des conflits : enjeux de la cyberjustice (Paris: Romillat, 2003) [hereinafter Benyekhlef & Gélinas] at 19.

15
ADR is used throughout this article to mean alternative dispute resolution, including arbitration.

16
See the Cyber Tribunal II web site at <http://www.cybertribunal.org.>

17
ibid.

18
Note that ICANN's monopoly over this type of domain is contested and that generic 'top-level' domains have been established in the private sector. See in particular the New Net web site at <http://www.new.net>. ICANN has also created a series of new top-level domains: .aero (for the aeronautics industry), .biz (for business activities), .coop (for co-operatives), .info (for various activities related to the media), .museum (for museums), .name (for surnames), and .pro (for professionals). The UDRP procedure is now in force with respect to all of these top-level domains. The administrators of domains reserved for certain categories of users have also established special procedures to resolve disputes arising out of their restrictions on registration. See Internet Corporation for Assigned Names and Numbers, 'New TLD Program', <http://www.icann.org/tlds>.

19
eResolution was first accredited by ICANN under the name Disputes.org.

20
World Intellectual Property Organization, 'The Management of Internet Names and Addresses: Intellectual Property Issues', Final Report of the WIPO Internet Domain Name Process, 30 April 1999, available at <http://www.wipo.int>.

21
See the web site run by professors Froomkin and Post at <http://www.icannwatch.org/>.

22
The author of this article also actively participated in the eResolution project.

23
Although it makes certain concessions to ODR, the procedure is not specifically designed to be conducted electronically.

24
eResolution ceased domain name-related activities on 30 November 2001. Seeing the usefulness of such a system, two of the three other UDRP dispute resolution service providers, namely WIPO and NAF, devoted some effort to promoting the use of electronic means in their procedures. These essentially amount to facilitated use of email and the possibility for the parties to complete HTML forms.

25
S. Donahey, 'The UDRP: Fundamentally Fair, But Far From Perfect' (2001), available at <http://brownwelsh.com/Archive/Donahey_UDRP.pdf >.

26
ibid.

27
As Annette Kur notes, there are others: 'Although the introduction of the UDRP has been a success story at least in regard of the number of conflicts which have been submitted for decision by UDRP Panels, the Policy was and remains the subject of concern and controversy. It was feared that the system might be misused by rightholders, in particular big companies, in order to obstruct the selection and use of domain names by small business and private parties, that the Policy was not formulated clearly enough, and that it did not furnish a sufficient "legal" basis for the settlement of conflicts. On the other hand, it was argued that the policy had too many loopholes to function properly from the point of view of rightholders. It was inter alia for the last-mentioned reason that WIPO initiated its second domain name process, in the course of which the possibility was investigated to amend the policy, e.g. by including more rights than just (registered) trade marks, etc.' A. Kur, 'UDRP: A Study by the Max-Planck-Institute for Foreign and International Patent, Copyright and Competition Law, Munich' (2002) at 4, source: <http://www.intellecprop.mpg.de/Online-Publikationen/2002/UDRP-study-final-02.pdf>.

28
M. Müller, 'Rough Justice: An Analysis of ICANN's Uniform Dispute Resolution Policy', Syracuse University School of Information Studies, November 2000, available at <http://legal.edhec.com /DTIC/ArticlesE/Article_dns_5.htm>. The study was the first to show that claimants win much more often with certain suppliers than with others. It concluded that the former suppliers could therefore receive a growing number of cases, giving rise to doubts about the impartiality of the system.

29
ibid. The number cases processed by the CPR was considered too small to be taken into account in a statistical analysis. See <http://www.cpradr.org/>.

30
'Simply put, complainants win more frequently with WIPO and the NAF than with eResolution. The statistical data, which has remained consistent since the introduction of the UDRP, shows that complainants win 82.2% of the time with the WIPO, 82.9% of the time with the NAF, but only 63.4% of the time with eResolution. Since outcome is what matters most to complainants, they have rewarded WIPO and the NAF with an overwhelming share of the UDRP caseload.' M. Geist, 'Fair.com? An Examination of the Allegations of Systemic Unfairness in the ICANN UDRP'(August 2001) at 6, source: <http://aix1.uottawa.ca/~geist/ geistudrp.pdf>.

31
ibid. at 8.

32
ibid.

33
M. Geist, 'Fundamentally Fair.com? An Update on Bias Allegations and the ICANN UDRP', source and updates: <http://www.udrpinfo.com>. Some believe that excessive use of statistics misinforms Geist's analysis of the UDRP. See International Trademark Association, 'The UDRP by All Accounts Works Effectively - Rebuttal to Analysis and Conclusions of Professor Michael Geist in "Fair.com?" and "Fundamentally Fair.com?"' (6 May 2002), available at <http://www.inta.org>. However, Geist's response convincingly refutes the arguments designed to defend the system. See M. Geist, 'A Response to INTA's Rebuttal of Fair.com', source: <http://aix1.uottawa.ca/~geist/geistintaresp.pdf>.

34
The dictum of Lord Hewart in R. v. Sussex Justices, [1924] 1 Law Reports (King's Bench Division) 256 at 260) is the most often cited formulation of what I would call an ancient and universal principle: 'it is not merely of some importance but is of fundamental importance that justice should not only be done, but should manifestly and undoubtedly be seen to be done'.

35
A UDRP Task Force was set up under ICANN's Names Council whose terms of reference were drafted in June of 2001. To the author's knowledge, the Task Force was never convened.

36
For a recent world survey, see M. Conley Tyler & D. Bretherton, 'Research into Online Alternative Dispute Resolution' (Report prepared for the Department of Justice, Victoria, 21 March 2003), available at <http://odrworkshop.org/odr2003.pdf>.

37
C. Gauvard & R. Jacob, 'Le rite, la justice et l'historien' in C. Gauvard & R. Jacob, eds., Les rites de la justice (Paris: Le Léopard d'Or, 1999) [hereinafter Gauvard & Jacob] 9.

38
A. Garapon, 'L'archéologie du jugement moderne' in Gauvard & Jacob, supra note 36, 230.

39
ibid. at 236.

40
Note that many legal forms are rationally grounded in the need for authentication in the exercise of authority.

41
Benyekhlef & Gélinas, supra note 14 at 25.

42
These are often referred to by other names, such as cybermarkets, electronic marketplaces, online marketplaces, online exchanges, etc.

43
There are also horizontal marketplaces involving a number of sectors. There are further categories, such as catalogue markets, barter markets, supply exchange markets and auction markets.

44
Following a period of severe rationalization, market operators are now looking anew at this possibility.

45
US Chamber Institute for Legal Reform, <http://www.legalreformnow.com/>.

46
The most pessimistic believe instead that a case is brought every two seconds. See US Chamber Institute for Legal Reform, 'America's Class Action Crisis', available at <http://www.legalreformnow.com/>.

47
C. Rule, Online Dispute Resolution for Business (San Francisco: Jossey-Bass, 2002).

48
T. Schultz, G. Kaufmann-Kohler, D. Langer, V. Bonnet, 'Online Dispute Resolution: The State of the Art and the Issues', E-Com Research Project of the University of Geneva, Geneva, 2001, available at <http://www.online-adr.org>.

49
H.H. Perrit Jr., 'The Electronic Agency and the Traditional Paradigms of Administrative Law' (1992) 44 Administrative Law Review 79.

50
Public initiatives now refer to IJIS (Integrated Justice Information Systems) and essentially cover all actors in the judicial process: government agencies, police forces, correctional services, parole boards, local, provincial, regional and state agencies, courts, bailiffs, judges, lawyers, etc. The purpose is to facilitate the construction of an electronic network that would allow all the stakeholders to communicate with one another, exchange information, consult files and render and notify decisions; in short, it facilitates the electronic management of the chain of information in court cases.

51
N. Antaki, 'Perspectives nord-américaines en médiation' in Service de la Formation Permanente, Barreau du Québec, Développement récents en médiation (Cowansville: Yvon Blais, 1995) 155 at 171.

52
See generally F. Gélinas, 'Arbitration and the Challenge of Globalization' (2000) 17 Arbitration International 117 at 118-119.

53
For the most recent statistics, see generally the background documents discussed at the Second OECD Ministerial Conference on Small and Medium Sized Enterprises, available at <http://www.oecd-istanbul.sme2004.org/bkg_doc.htm>.

54
OECD, Alternative Dispute Resolution Online Mechanisms for SME Cross-Border Disputes (OECD Publications, 2004), available at <http://www.oecd-istanbul.sme2004.org/bkg_doc.htm>.

55
ibid. With respect to fees, the ICC International Court of Arbitration can only be congratulated for leaving the lower part of its scale untouched when it last proceeded to an otherwise perfectly legitimate fee increase.

56
See generally OECD, Facilitating SMEs' Access to International Markets (OECD Publications, 2004), available at <http://www.oecd-istanbul.sme2004.org/bkg_doc.htm>.