Online Dispute: Resolution or Creation?

Among the many shiny new ideas of the Future of the #ReinventLaw of the New Normal crowd is online dispute resolution. This may come as a surprise to many, since most of us find our time online to give rise to the creation of disputes about, well, everything.



In a  comment to her own post at Legal Ethics Forum, Renee Knake mentioned an Online Dispute Resolution service called Modria, which offers what it calls an online small claims court.  As I am of the view that for most minor legal disputes, the courts are overly expensive, technical and take too damn long, the notion of a simplified dispute resolution process that could quickly address relatively low-value and cross-jurisdictional disputes, a huge but neglected problem with the law, was very interesting.

Even though Renee, one of the founders of #ReinventLaw, to which I’ve been somewhat unkind, likely thinks I’m just a hater of all things new, I decided to use my time to look around Modria.  I soon stumbled upon a claim to fame they thought worthy of promotion, that Richard Susskind, the head cheerleader of shiny, loved the idea. I persisted in trying to give Modria a fair shake nonetheless, because Renee’s point struck a chord.


My concern is that if the legal profession refuses to liberalize in these ways, others will provide the tools that the public demands/needs (Modria is a good example of this – called by the Wall Street Journal “the small-claims court for the 21st Century” – founded by ODR pioneer Colin Rule, a nonlawyer).
When she described Colin Rule as an ODR “pioneer” and a non-lawyer, I have no doubt she meant it as a positive. Non-lawyers, to the Future of the #ReinventLaw of the New Normal crowd have the virtue of not being constrained by the limits of education or precedent. They are free to imagine new ways to do things without having to concern themselves with the past couple hundred years of trial and error.  I get it.

But being all pioneer-y and non-lawyer-y isn’t enough to suggest that Colin Rule has any bona fides for the job, so I checked out his profile.


Colin has worked in the dispute resolution field for more than two decades as a mediator, trainer, and consultant. From 2003 to 2011 he served as the first Director of Online Dispute Resolution for eBay and PayPal…
For anyone who has any depth of experience with eBay and Paypal, this isn’t necessarily a good thing.  They deal with a ton of disputes, because people do a lot of things that are definitely dispute worthy on eBay and Paypal (and a lot of good too. I love and use both).  But the virtue of their dispute resolution mechanism is that it exists.  It’s not particularly fast, and it remains a deep, abiding mystery what “law” is applied by the elves working deep in the bowels of a bunker in San Jose, but by playing their game, you have to play by their rules.

This does not extend to the rest of the world, however.  And so it leads me to ask a bunch of questions, the answers to which are utterly missing on the Modria website despite the cool marketing lingo that is meant to sate the curiosity of the believer.

1. Who is deciding things at your small claims court?
2. What are their qualifications? Are they lawyers? Are they nice folks you’ve trained with your special sauce and we should just trust you because you have a cute smile?
3. What makes them neutral, reasonably unbiased, especially with regard to potential corporate account users who might require all disputes be handled there?
4. What “law” is applied in determining disputes? You have no jurisdictional limits, which is good, but then that comes without law. So is there law, or are decisions whatever happens to strike the fancy of one of those nice folks trained with your special sauce?
5. How does a party submit evidence? How does the “judge” know it’s real?
6. How does the opposing party get to see the evidence in advance of being put to the test of disputing it?
7. How does the inarticulate litigant overcome the limits of his skills? Is this done in writing or via live video?
8. Is there an appeal process? Is there anyone to go to when the dispute resolution process falls into the toilet?
9. Does anyone review the “judge’s” determination to make sure it isn’t batshit crazy?
10. What assurance is there that this process can provide a fair, rational and honest means of determining disputes?

There are plenty of other, smaller, questions within these, but since all the futurist types love lists of 10, I’ll stop here.

Is the idea of online dispute resolution a worthwhile idea to pursue? Absolutely. There is a huge gap in the legal system for low-value cross-jurisdictional disputes, and given the flat world of the internet, the gap really needs to be filled.  But is Modria the solution?

Beats the heck out of me. It doesn’t appear likely to be capable of doing the job now, as it seems to have massive failings in its concept and format that need to be overcome before it can fulfill its promise. In other words, right now it fails miserably in execution despite the shininess of its concept.  Does that mean I hate it? Well, yes, unless and until it can do what it purports to do fairly, adequately and properly. Otherwise, it’s just another idea that has found a problem and done a half-baked job of solving it. 

We may well have a troubled system, one that doesn’t work particularly well for the world as it exists, but that doesn’t mean we embrace any change without scrutiny.  As I responded to Renee,


The allure of shiny new ideas when things are looking rather dim is understandable, but change isn’t always for the better. Just trying to help.
The new emperor can be just as naked as the old one. The Future of the #ReinventLaw of the New Normal crowd really needs to understand this.

3 comments on “Online Dispute: Resolution or Creation?

  1. Antonin I. Pribetic

    Scott,

    Modria’s TOS contain answers to some of your pertinent questions: http://www.modria.com/terms-of-service/

    “Arbitration Rules and Governing Law. The arbitration will be administered by the International Institute for Conflict Prevention and Resolution (“CPR”) in accordance with the Commercial ADR Rules then in effect, except as modified by this “Dispute Resolution” section. (The ADR Rules are available at http://cpradr.org/Resources/ADRTools/ADRRulesEthicsCodes.aspx or by calling CPR at 212-849-6490.) The Federal Arbitration Act will govern the interpretation and enforcement of this Section.”

    You may share my bemusement that Modria’s TOS also include a Controlling Law and Jurisdiction clause specifying California law and N.D. California as choice of forum. Further, the Dispute Resolution clause reads in part:

    “You acknowledge and agree that you and Modria are each waiving the right to a trial by jury or to participate as a plaintiff or class member in any purported class action or representative proceeding.”

  2. SHG

    Ah, you’re right. California law it is. Hear that, you guys from Indiana, who thought you could rely on Indiana law?  Modria is here for you, provided you don’t mind that the law where you are won’t be the law they use.

    Though it still doesn’t answer the question of who is deciding California law, given its non-lawyer pedigree, but if you think Modria hasn’t applied the law properly, there is always jurisdiction and venue in the United States District Court for the Northern District of California. Provided you don’t mind waiving a jury and proceeding as part of the dreaded class of unhappy campers.

    Yes, it does answer some questions. Not quite an answer that provides much confidence.

  3. Nigel Declan

    Well said, SHG. I hope that some young lawyers read this and realize that, contrary to their belief, you are not some cantankerous 21st-Century Luddite. You deftly balance the recognition that new internet technology may be the solution to the existing problem of international low-value commercial arbitration with the potential problems, both those that currently exist with commercial arbitration and potential new difficulties arising from online-versus-in-person hearings.

    The #ReinventLaw crowd and the Slackoisie would be well-served to take the necessary time to consider how technology might be used to best serve the law and the interests of clients, rather than as an end unto itself (“Law 2.0: Because Law 1.0 Seemed Like Too Much Work, Man”).

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