The past and future of crowdsourced online dispute resolution (CODR)

Bloomberg has recently reported that Visa has 90 million disputes annually. The resolution of so many disputes requires an innovative dispute resolution method: CODR. CODR can be defined as a term that encompasses some forms of Alternative Dispute Resolution (ADR) and court proceedings using the internet and crowdsourcing as parts of the dispute resolution process. The term “crowdsourcing” means an act of outsourcing a job, previously done by workers, to a large group of people in the form of an open call.

One of the first implementations of the idea of CODR was eBay's Community Court which was later updated and renamed eBay’s Community Review Forum (ECRF). The ECRF allowed sellers to appeal non-positive feedback left by buyers. The sellers’ claims were sent to 21 randomly selected members of the eBay community who were responsible for rendering a decision. The aggregate decision was enforced by eBay's support staff. The procedure’s length was about 22 days. The ECRF stopped operating in January 2012, allegedly because eBay changed its seller’s performance evaluation system. If this is true, the fact that eBay did not implement any other initiatives similar to the ECRF clearly indicates that the idea of CODR was not mature enough to become a paradigm changer in the field of dispute resolution. However, the ECRF did not remain unnoticed and one Dutch website (Marktplaats.nl) and one Chinese website (Taobao.com) launched their own CODR procedures in 2010 and 2012, respectively. Similarly to the ECRF, Marktplaats allowed sellers to appeal feedback disputes by sending those disputes to a group of users of the website. Taobao’s CODR allowed the resolution of all kinds of e-commerce disputes. Taobao’s CODR resolved more than 238,000 disputes in 2013 alone. Companies, such as Taobao, who have a large number of disputes have little dispute resolution options as using traditional legal services for the resolution of such disputes may not be cost-efficient.

However, many important technological advances are preceded by a number of failures. For example, long before the appearance of the first planes, people made wings of feathers or lightweight wood and tested their ability to fly. As the National Aeronautics and Space Administration (NASA) points out, the results of such efforts were disastrous because: “the muscles of the human arms are not like a bird’s and can not move with the strength of a bird”. Deep Thought, one of the most powerful chess computers at that time, lost a match against the chess master Garry Kasparov two times in 1989. IBM, the creator of Deep Thought, updated the computer and the new version was called Deep Blue. In 1996, Deep Blue lost against Kasparov, but managed to win one out of six games. Later in 1997, Deep Blue won a match against Kasparov with 3½–2½.

CODR in action

The field of Crowdsourced Online Dispute Resolution (CODR) is not an exception from the trend mentioned above. Despite the clear potential of CODR for quickly and cost-effectively resolving a large number of disputes, it still remains a rather unknown and nonstandard type of dispute resolution. Kleros, a decentralised arbitration service which allows lay people to act as jurors and receive in exchange for their jury service a crypto token called pinakion (PNK), had the ambition to make a breakthrough in the field of dispute resolution by combining the idea of CODR with blockchain technologies. Kleros even won the Blockchains for Social Good Prize from the European Union’s Horizon 2020 research and innovation programme. PeopleClaim.com, an online platform that allows one of the disputants to publish their claim online and invite the other disputant to reply to the claim, also implemented an ambitious blockchain solution which provides any user of the platform with crypto tokens called Rhubarb (RHU) if one of the disputants likes the proposed solution. Despite the fact that both Kleros and PeopleClaim are helpful and well-designed platforms, they have not (yet) succeeded in revolutionising the way people resolve disputes.

At the same time, the idea of CODR is travelling around the world and was implemented in Iran. In 2022, Tehran Times publicly announced that the government of Iran launched its first CODR centre for the resolution of consumer disputes.

In the light of the aforementioned considerations, it is clear that the idea of CODR is getting an impetus and, similarly to the ideas of inventing a flying machine capable of carrying humans and the idea of a computer chess player, it passes through various transformations, some less or more successful. However, the major breakthrough is still to come and, taking into account the high costs associated with the traditional dispute resolution and its lengthy duration, the idea of CODR will most likely be implemented as a logical solution to address those two major issues. First, however, it needs to evolve and find its place.

CODR requires time to develop

The reason why CODR is not widely popular yet is not its innovative nature. Actually, there is nothing too innovative in allowing a group of lay people to resolve disputes. In the United States and many other countries, a group of randomly selected people called jurors have tremendous power and may even sentence people to death through an electric chair or a lethal injection. Thus, giving a group of internet users the capacity to resolve disputes does not seem too radical.

The actual reason for the lack of popularity of CODR is that it is an unestablished way to resolve disputes. Therefore, there is (i) little research with regard to it, (ii) little actual implementations of CODR initiatives, and (iii) little awareness about the existence of CODR. However, taking into account that more and more CODR platforms started appearing after the launch of the pioneer ECRF and more and more scholars devote their time to studying CODR, we can expect a groundbreaking CODR initiative soon which will make CODR popular. For example, if a new CODR procedure resolves cost-efficiently the 90 million disputes which VISA has, that procedure will become widely known and may trigger an avalanche of similar disputes. Only in this way humanity can have affordable and quick dispute resolution processes conducted by humans.

AI is not a threat for CODR

Some scholars speculate that artificial intelligence (AI) will revolutionise the field of dispute resolution. In the field of dispute resolution, artificial intelligence can be exceptionally helpful in (i) clarifying contractual and other legal provisions, (ii) making suggestions to the disputants on how to resolve their disputes, (iii) providing the disputants with an analysis of their best alternative to a negotiated agreement (BATNA), and (iv) facilitating or even leading negotiation or mediation proceedings. Thus, the importance of AI in the field of dispute resolution will continue growing. However, it will never replace humans as artificial intelligence does not have human emotions and cannot, for example, imagine what emotional pain a claimant may suffer out of a certain event (e.g., a contractual breach or a crime). Hence, a decision made by AI that awards damages to a victim of a crime may not accurately reflect the actual damages suffered by that person.

CODR, in turn, relies on human intellect but can be heavily computerised as it is conducted through the internet. Furthermore, due to its digital nature, CODR can well be combined with artificial intelligence tools. Thus, CODR can be at the intersection between traditional juries and artificial intelligence, while at the same time being more effective than the often slow and costly jury proceedings and providing solutions rendered by human intellect. A CODR procedure which has current artificial intelligence functionalities (similar to ChatGPT) and relying on blockchain (similar to Kleros and PeopleClaim) may revolutionise the field of dispute resolution in an unprecedented way.