VOLUME 11, ISSUE 1: ARTICLE SUMMARY
Technology and the Future of Dispute Systems Design
By Orna Rabinovich-Einy & Ethan Katsh
Originally Published in Volume 17 of the Harvard Negotiation Law Review
Summary by Patrick Noonan
The World Wide Web (Web) and Dispute System Design (DSD) were both developed in the late 1980s. While they have largely existed in separate realms, it seems only natural that the information-intensive process of DSD would pair well with the remarkable information processing abilities of the Web. Combining the technological advancements of the Web with DSD should lead to new, more effective, and more efficient dispute resolution and prevention systems.
Both DSD and the Web came from humble beginnings, with modest expectations for creating solutions to everyday problems. The Web addressed the cost of communication by providing an instantaneous means of sharing information across vast distances. Since the early 1990s, the Web has expanded exponentially in both size and functionality. DSD originated as an intra-organizational tool to help identify sources and patterns of conflict and institutionalize dispute resolution through ongoing communication within the organization.
Although the scope of DSD has greatly increased, its digital applications have been somewhat limited. Such applications typically revolve around disputes that arise over the Web between distant parties, which can only be resolved online. The use of Online Dispute Resolution (ODR) is generally an adaptation of traditional ADR processes but is not, as of yet, transformational.
While DSD generally involves boundary-setting, technology is fighting in the opposite direction by creating new means and opportunities for communication. As information technologies and DSD begin to come together, it is likely that the ever-changing information technologies will support and direct the future of DSD.
Part I: The Origin and Evolution of Dispute Systems Design (DSD)
DSD can be traced to the 1988 publication of the Ury, Brett, and Goldberg (UB&G) book “Getting Disputes Resolved: Designing Systems to Cut the Costs of Conflict.” The authors of that book looked primarily at wildcat strikes in the mining industry and found that dispute patterns could be identified in closed settings and that conflicts could be addressed more effectively ex ante, rather than ex post, through institutionalization of dispute systems. UB&G initiated a shift of perspective on ADR from an individual to a structural one by providing a framework for more effective dispute resolution and prevention systems in organizations.
UB&G developed a framework for the design of conflict management systems, involving six elements: (1) focusing on interests, (2) offering low-cost, rights-based and power-based processes when interest-based processes fail, (3) building loop-backs from rights-based processes to interest-based ones, (4) preventing disputes by building in consultation before and feedback after, (5) arranging procedures from low (interest-based) to high (rights or power-based) cost, and (6) providing the necessary motivation, skills, and resources. UB&G also developed a four-stage communications-intensive design process involving diagnosis, design, and implementation, followed by exit, evaluation, and diffusion.
Costantino and Merchant (C&M) adopted UB&M’s framework in their book, “Designing Conflict Management Systems: A Guide to Creating Productive and Healthy Organizations.” C&M focused on the systemic aspects of dispute resolution, focusing primarily on the instance of dispute patterns in organizations as a means of enhancing learning and prevention system-wide. C&M also emphasized the importance of disputant involvement in the design process as well as in disputant control over the choice of process.
Since C&M’s book, the DSD field has become relevant through additional books and articles outlining the specific systems developed in particular organizations. Professional dispute systems designers have offered a new expertise in conducting organizational dispute analysis, design, and evaluation by expanding the permutations of professional, physical, and conceptual boundaries of DSD. Additionally, it became widely accepted that, along with system design professionals, the presence of professional dispute resolvers was also imperative for the operation of the new systems.
As dispute systems were developed, it was often the situation that the dispute resolution system was physically separated from the rest of the organization to ensure neutrality of the dispute resolver, as well as to maintain confidentiality of the process. In maintaining the integrity of the processes, very little information is shared with individuals outside the process. In general, however, internal processes had defined characteristics and typologies, such as mediation, arbitration, or counseling.
Recently, the field of DSD has ventured into discussing how different organizational structures, beyond the workplace setting, could influence dispute resolution systems. Little has been said, however, about how technology within organizations could impact DSD. Similarly, significant attention has been given to the emergence of DSD in other settings, such as courts and the international setting, where information had to be shared among the parties involved in order to reach a decision, even if there was no dispute at issue. Ultimately, the focus on traditional processes and interest-based dispute resolution remained.
Expanded research in DSD has explored the trend towards the privatization of justice, how design choices impact individuals and outcomes, and the ethical issues relating to DSD. Additional research has deconstructed the notion of control over DSD and distinguished between stakeholder involvement in design and control over the process itself. Despite the expanded applications of DSD, technology has not been a driving force for change in the field. Nevertheless, the connection between the information intensive process of DSD and the information gathering capabilities of technology necessitates the marriage of DSD and information management technologies.
Part II: ODR and DSD
E-commerce has exploded since its meager beginnings in 1994, creating a vast forum where disputes may arise. As such, ODR has been implemented to effectively resolve disputes that arise online and has been implemented as an additional tool for third parties. Notwithstanding, technology itself is a force that will critically impact the field of dispute resolution both on and offline. The following three case studies provide insights into the impact of technology on the future of DSD.
First, eBay, the online auction company, has implemented a highly successful, high-volume, ODR program. After a small test group, which confirmed the possibility of positive outcomes through ODR, eBay outsourced its ODR needs to the company SquareTrade in 1999. SquareTrade sought to design a system where a human third party was not necessary but that would mimic the substance of mediation in that the parties would reach a consensus-based outcome that the parties felt was fair and unbiased. As a result, SquareTrade developed software that served as an information gatherer and organizer, which structured the communication between the parties.
SquareTrade was able to collect information with every click of a party’s mouse, which meant it was collecting massive amounts of data that could be stored, organized, and analyzed in order to adjust and improve the system. While still ensuring confidentiality to the parties, SquareTrade was able to monitor the success and failure of dispute and solution typologies as well as mediators. The constant feedback on the system allowed for significant amounts of refinement.
Since 2003, eBay has used an in-house ODR mechanism, under the direction of Colin Rule. eBay was able to create software that effectively dealt with the repetitive, simple conflicts that arose in the context of its online marketplace. Due to the consistent nature of disputes, which fall typically into one of several categories, such as item not as described, item not received, unpaid item, and feedback related dispute, the system was able to streamline the transfer of key information that had been found to be beneficial in resolving such disputes. Since launching its internal ODR system, eBay has expanded the use of its ODR system to other websites such as Paypal and has even created an online community court, where 21 uninterested eBay users serve as the fact finder and decision maker.
Second, SmartSettle and CyberSettle are two software systems that focus on key points in the dispute resolution process where the use of information is often ineffective or inefficient. CyberSettle uses a system of blind bidding, allowing parties to make a blind settlement offer and agree that, if their amounts are within a certain percentage, the parties would split the difference and settle. SmartSettle uses more complex software, which allows parties to rate their interests, creating a spectrum of possible settlement options. The parties are then able to refine their offers based on their interests and are able to optimize their offer, which allows for increased value to one side without having a negative effect on the other. While SmartSettle and CyberSettle can be useful tools for ADR professionals, they do not capture data that can be used to provide insight into the disputing environment or institution.
Third, The Mediation Room provides an application that is able to guide parties through communications that may be disorganized if held over email. The software is unable, however, to help facilitate or guide parties to a resolution. Additionally, the software does not collect data that can be used to reveal elements in the larger system that could be changed to avoid disputes in the future or reduce the number of disputes.
While institutional environments are growing faster then ever and becoming more complex, with larger numbers of client and supplier relationships, greater demand for services, and the critical need for real-time communications, technology is also expanding to meet those needs. New technological tools can allow institutions to grow in complexity while remaining both efficient and effective through the finding, evaluating, creating, and communicating of information. Designing systems for constantly changing economic, political, and social contexts is the current challenge of DSD.
It is now well accepted that the presence of disputes is not necessarily a sign of poor management, but is the product of highly complex situations with large numbers of transactions and relationships. Online markets such as eBay or Amazon.com, which host millions of customers and transactions every week, must develop trust among their customers in order to facilitate the large number of transactions and relationships. These companies are also able to receive and analyze huge amounts of data that allow them to understand how disputes surface and identify approaches to how they may be resolved.
Institutions have begun to use the lessons learned from the all-online entities and implement similar information gathering systems through DSD. The following two case studies provide examples of how technology has already impacted DSD.
Benoam has collected information from all communications and arbitration rulings, which has led to increased consistency and transparency in the insurance claim realm. With mostly repeat players of fairly similar power, the fairness-increasing features are only further enhanced. Additionally, the arbitrators are professionals who are familiar with the field and who have very little incentive to try to appease the parties, as they often switch from plaintiff to defendant from case to case. Rather than focusing on the direction of the decisions, the participants in the system are more focused on the development of a clear and predictable rule, thus challenging some of the common perceptions about ADR systems.
Overall, Benoam has been a success and has facilitated the free-flow of information to, from, and among insurance companies, thus creating a more efficient system. Benoam has essentially made legal expertise irrelevant through its clear and consistent development of the norms and precedent within the system. Technology allowed for the easy, efficient sharing of information, thereby strengthening efforts to enhance consistency across cases. The availability of digital databases that allow for effortless connections between financial data and resources on the one hand, and resolution outcomes on the other has allowed Benoam to operate completely autonomously of the court and legal systems. Further, the nuanced confidentiality system, which allows for the anonymous publication of arbitration awards, has challenged the formal law/ADR dichotomy. Benoam has provided an example of how ADR systems are social constructs free from conceptual barriers or super-imposed categories.
Second, the U.S. Office of Government Information Services (OGIS) is in place to mediate disputes involving Freedom of Information Act (FOIA) requests that were turned down by an agency and rejected on appeal, thus reducing the amount of FOIA litigation. OGIS is also allowed to issue advisory opinions, review agency compliance, and recommend policy changes. The original plan for OGIS was to provide ODR services to individuals with disputes arising out of FOIA. Instead, the initial mass of contacts to OGIS revolved around grievances (in contrast to disputes) arising out of the FOIA request process. The solution for OGIS was to create an online application addressing grievant concerns while also collecting data about where people were having difficulties. OGIS’ new systems promise to break down the bureaucratic boundaries that separate the dozens of independently operating government agencies. OGIS found success by focusing on the prevention of disputes, rather than the resolution of current disputes, by obtaining and analyzing information from individuals before they had an actual dispute. OGIS has highlighted the importance of communication in resolving disputes and possibly opened the door to a new field of online dispute prevention (ODP).
Part III: An Alternative understanding of DSD
Technology will lead to many fundamental changes in the field of DSD. Dispute systems designers will have to be more aware of new technologies and, thus, our understanding of dispute systems designer training, qualities, and capabilities may undergo significant change. The designers will also need to be able to cooperate with technical experts to develop ODR systems and connect the dispute system to the goals and incentives at the heart of an organization. Technology may open the door to increased user involvement through the design of, and participation in, the dispute systems, but may also serve to subject individuals to power. Designers must be aware of the potential for technology to reflect certain values over others and create biases within the systems. Finally, technology is blurring the lines between the prevailing conceptual boundaries of different dispute resolution processes within DSD, which calls for continual reevaluation of the assumptions and conceptions that underlie DSD.
Similar to the shift from the legal profession’s monopoly on information, the dispute resolution field is adjusting to the impacts of technology. Dispute system designers will have to now demonstrate their relevance and understanding of digital communication in this new information era, where expertise is shifting and traditional intermediaries are being displaced. Dispute systems designers can get ahead of the curve if they recognize the opportunities provided by technology, but, if they do not, they will become increasingly obsolete.
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Posted in: Volume 11, Issue 1