Online Mediation: Its Uses And Limitations

This article was first published by the Missouri Lawyers Weekly (November, 2000)

A
cartoon appeared in the Louisville Courier-Journal commenting on the cancelled
eBay sale of an abstract painting attributed to the modern master Richard
Diebenkorn. The cartoon shows a rather
goofy looking guy saying to his much put-upon wife: “Look at this Picasso I
bought on eBay!” Proudly grasped
between the cartoon husband’s hands is a framed picture of five dogs playing
poker.

The
eBay bidding on the “Diebenkorn” started at a quarter and ended at
$135,805. When eBay cancelled the sale,
it alleged that the seller, sadly a lawyer, had violated eBay’s rules by
artificially inflating the sales price through “shill bidding.” This much- publicized sale shed light on the
exponential growth of bad faith and fraud on the internet.[1]

The
New York Times reported that
small-business owners spent more money online in 1999 than consumers did. They spent $25 billion online, up from only
$2 billion in 1998. Small-business online purchases are expected to increase to
$118 billion in 2001. Consumers spent
$20 billion online in 1999.[2]

My
boyfriend, Chris, spends many hours a week trading rock and roll LPs, tapes and
other memorabilia on eBay. On occasion,
he has paid for things he did not get.
I hear first-hand how ineffective eBay’s dispute resolution mechanism is
for smaller disputes. How do you track
down a seller in California who has cashed your $100 check and keeps telling
you by e-mail that the Beach Boys poster you bought should arrive any day now
by regular mail?

As
business moves to the internet, so do commercial disputes.

Online Mediation
and ADR Services

Websites
offering mediation and other online ADR services are proliferating. Generally, they fall into two categories: (1) blind bidding and (2) discussion based
processing of disputes.[3]

The
blind bidding websites, like Cybersettle, CyberSolve, ClickNsettle and
Settlement Now, can help settle the dispute when the only question is “how
much?” These sites are not helpful if
the question is “who is liable?” A
party may initiate the process by contacting the website, which in turn
contacts the other party to the dispute.
The service then begins collecting blind bids from both sides at its
password-protected site. The software
protects each side’s bid from disclosure to the other side. Some sites permit only three rounds of
bidding. Some sites offer unlimited
rounds of bidding.[5] The dispute settles if the blind bids are
within a pre-agreed dollar range (say $5,000) or within a certain percentage of
each other. The dispute settles
automatically for the median amount. If
the bids are too far apart, a party can walk away from the process without
having disclosed his or her “bottom line” to the other party. Since 1988, when Cyberrsettle went online,
parties have settled 5,000 disputes involving more than $20 million in claims.[6]

Discussion
based processing of disputes is also available on the internet at sites like
OnLineMediators or Resolution Forum.[7] These sites are helpful in more complex
disputes to convey information between parties who are located several hundred
or thousand miles apart. They also can
eliminate bias (by the other party or by the neutral) based on race, age, gender
or disability.[8] On the other hand, they do not capture as
effectively as face-to-face mediation the interests, needs, motives and
emotions of the parties. A full
understanding of these components of the dispute is often essential to its
resolution. And the written text of
e-mail puts a greater emphasis on literacy and written communication
skills. Some on-line practitioners also
note that parties feel more free to exchange inflammatory comments and ad hominem attacks that would not likely
occur if the parties found themselves in the same room. Some neutrals get permission at the outset
of the mediation to filter these types of comments by returning them to the
sender for re-drafting before the neutral exchanges them with the other side.

James
Melamed has described in detail how these discussion-based online mediations
work. J. Melamed, “Mediating on the
Internet: Today and Tomorrow,” www.mediate.com/articles/Melamed5.cfm. He also describes the online mediation
protocols recommended by The Mediation Information and Resource Center, governing
descriptions of the process for parties, suggested ground rules, pre-mediation
responsibilities, sending and receiving e-mail, delays in sending and receiving
e-mail, attachments, distribution of messages, management and disclosure of
information online, and protection of privacy.
Id. Rather than
summarize that discussion here, I want to turn to my use of the internet as an
adjunct to face-to-face mediations.

Using the Internet
in Multi-Session Face-to-Face Mediations

I
have now used the internet in several mediations to preserve the momentum
of face-to-face negotiations that have
adjourned overnight or to a later date.
The idea came to me from two directions. First, I have been a consumer of mediation services in three
complex reinsurance cases resulting in settlements of over $22 million. Each mediation took several days to
complete. Two of the mediations
resulted in settlements on the final day of the mediation. The third case settled the day of trial,
largely because the defendant’s CEO had had the opportunity to hear directly
from my client during the mediation.
Those experiences taught me that mediation sessions require much work
and concentration. In some disputes,
each party is processing a lot of factual and legal information. The parties may also be working through a
number of emotions, including anger, loss, frustration, exhaustion and even
outright dislike for the other party.
It takes time to build the deep understanding of the other party’s
perspective of the dispute and to build empathy for the other party’s
interests, both essential components, in most circumstances, to reaching a
mediated settlement. My client and I
certainly needed the breaks at the end of each day to process all the
information exchanged earlier. We needed
time to talk among ourselves and to determine how to proceed the next day. The cases would not have settled if the
mediator had used what I call “muscle mediation.”

Muscle Mediation

Some
mediators show concern that cases will not settle unless the parties are locked
into an uninterrupted mediation process.
These “muscle mediators,” as I call them, reach settlement by waiting
until one of the parties capitulates — out of exhaustion and even hunger –
screaming “UNCLE.” Admittedly, this
practice can work (although I recommend feeding the parties). And in some circumstances it is essential to
reaching agreement because an interruption in the process almost certainly will
be the end of it.

My
experience as a client of mediation services however suggests that parties who
go into the process expecting to spend the time needed to fully explore
settlement options, are willing to come back for more than one mediation
session. The trick for the mediator is
to maintain the momentum during the breaks.
The mediator must also build on the effect the sessions with him or her
have had on the parties.

Documenting
Progress

My
use of the internet as an adjunct to face-to-face mediation, also arose from
advice offered by J. Winslade & G. Monk in Narrative Mediaiton: A New
Approach to Conflict Resolution
(Jossey-Bass Publ. 2000). In a chapter entitled “Documenting Progress”
the authors suggest using written communications to the parties during the
mediation as milestones or signposts in the mediation journey. Id. at
228. These written communications can
secure the progress made by the parties and prevent slippage back into hardened
positions between mediation sessions.

Based on the
advice of the authors, my e-mails to mediating parties do the following: (1)
acknowledge the effects of the conflict on each person (e.g., emotional and
financial) without ascribing blame for the dispute; (2) describe each party’s
perspective of the dispute, which serves again as acknowledgment that I have
been listening carefully to each party; (3) acknowledge the best intentions of
each party and implicitly invite each person to join the mediator in
acknowledging the best intentions of the other party; (4) wonder about
possibilities of building on the progress made, which Winslade and Monk call
“flying in the face of hopelessness;” (5)
put the conflict in context, especially by highlighting the sequence of
events that led to the conflict; (6) summarize any unique outcomes suggested by
the parties during the session, including a summary of the kind of on-going
relationship the parties expressed an interest in achieving; (7) ask the
parties to reflect on what has happened, especially the parts of the mediation
that they have appreciated; (8) pose “what if…” questions designed to invite
them to consider the risks each party faces if he or she fails to reach
agreement; (9) remind the parties that they may wish to consult with a trusted
third party (including lawyers) before the next session about some of the “what
if…” questions; and (10) compliment them on their commitment to the process and
encourage them to continue with it. Id. at 233-242. I may close with
one of my favorite mediations quotes like: “All polishing is done with
friction.”[9] I invite comments to my e-mails and solicit
any questions they may have about the mediation.

Over
time, these e-mails can serve as a point of reference for noticing change in
the parties’ positions and interactions.
Id. 236.

In
the cases in which I have used these e-mails, the parties seem to settle more
quickly. In one case, a very defiant
plaintiff discovered overnight after receiving my e-mail that she was exhausted
by the litigation and she wanted to avoid going to court the next afternoon. She reached a reasonable settlement the next
morning with little further help from me. In another case, a multi-party
dispute involving an antique table, the parties settled the dispute after
receiving a very long e-mail from me that took me hours to draft. I feel that
the e-mails gave the parties a structure for looking at what they had heard,
learned and truly needed.

Obviously,
the same information could be exchanged by letter, but e-mail allows me to
continue to interact with the parties on a real-time basis.

The
use of the internet in helping parties resolve disputes is in its infancy. Lawyers, as providers and consumers of
mediation services, will play a critical role in the development of the
internet as a mediation tool. As Derek
Bok[10]
said, “If lawyers are not leaders in marshalling cooperation and designing
mechanisms that allow it to flourish, they will not be at the center of the
most creative social experiments of our time.”



[1] “eBay Cancels Sale and Suspends
Seller in Painting Auction,” New York
Times
(May 11, 2000).

[2] “Finding Deals, Small Businesses
Buy More Online,” New York Times (May
15, 2000).

[3] See K. Marquess, “Point,
Click – Settle Quick!” ABA JOURNAL 82
(April 2000); E. Katsh, “The New
Frontier: Online ADR Becoming a Global Priority,” DISPUTE RESOL. MAG. 6 (Winter
2000); D. Eidsmoe, “Calling Their
Bluff: Settlement Rates Low but Hopes Still High for Online Resolution of
Personal Injury Claims,” DISPUTE RESOL. MAG. 9 (Winter 2000); J. Melamed,
“Mediating on the Interenet: Today and Tomorrow.”
www.mediate.com/articles/Melamed5.cfm.

[4] See also J. Boskey, “Useful ADR Sites on the WorldWideWeb,”
www.mediate.com/articles/boskey.cfm

[5] U.S. Settlement Corp and
ClickNsettle offer unlimited rounds of bidding.

[6] E. Katsh, supra at 7.

[7] For a description of some of these
sites, see E. Katsh, supra at
7-8. See generally R. Bordone, “Electronic Online Dispute Resolution: A
Systems Approach – Potential, Problems and a Proposal,” 3 HARV. NEGOTIATION L.
REV. 175 (Spring 1998); G. Friedman, “Alternative Dispute Resolution and
Emerging Online Technologies: Challenges and Opportunities,” 19 HASTINGS
COMM/ENT. L.J. 694 (1997); E. Katsh, “Dispute Resolution in Cyberspace,” 28
CONN. L. REV. 953 (Summer 1996); E.
Lide, “ADR and Cyberspace: The Role of Alternative Dispute Resolution in Online
Commerce, Intellectual Property and Defamation,” 12 OHIO STATE J. ON DISP.
RESOLUTION 193 (1996).

[8] See discussion in C. Rule, “Online Mediation: The Next Frontier for
Dispute Resolution,” 23 SPIDR News 10 (Fall 1999).

[9] Mary Parket Follet, was a turn-of
the century woman who is now recognized as the “mother” of today’s ADR movement.

[10] Bok is the author of The State of
the Nation: Government and the Quest for a Better Society
; Higher
Learing
, The Cost of Talent: How Executives and Professionals are Paid
and How it Affects America;
and Beyond the Ivory Tower.

                        author

Paula Young

Paula M. Young is an associate professor at the Appalachian School of Law located in Virginia teaching negotiation, certified civil mediation, arbitration, and dispute resolution system design.  She received in 2003 a LL.M. in Dispute Resolution from the top ranked program in the U.S.   She has over 1400 hours of… MORE >

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