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ICC Planning Online ADR System Clearinghouse
Stops Short of Offering Own Dispute Resolution System
By: Justin Kelly, ADRWorld.com
April 5, 2001 - The International Chamber of Commerce is developing an Internet-based system that will guide parties in e-commerce disputes toward an appropriate online dispute resolution provider, but has decided against providing online ADR services of its own for now, according to ICC officials.
Morgan Baker, policy manager for e-commerce and intellectual property at ICC, said the online system will provide parties with detailed information about online ADR providers -- those that settle disputes over the Internet rather than in person -- and help them identify the best mechanism, such as arbitration or mediation, for resolving their dispute. In addition, consumers or businesses could "submit their dispute to ICC" and have their case "referred to an online ADR provider with the right ADR processes and language abilities," Morgan said.
The chamber decided to develop the clearinghouse system rather than its own online ADR system because it "supports the idea of competition in the marketplace" and believes that "enough [online ADR] services exist already" to provide parties with the necessary redress mechanism for business-to-consumer disputes in e-commerce, Morgan said.
One year ago, ICC officials announced that they were developing a plan to get into the business of online dispute resolution for e-commerce transactions, hoping to capitalize on its reputation and worldwide network of affiliates to create a global dispute resolution system ("International Chamber of Commerce to Launch Online ADR System," ADRWorld.com, 4/12/2000).
There are now roughly three dozen active online ADR service providers, ranging from firms that specialize in resolving insurance disputes through Internet-based "blind bidding," to full-service providers that offer online arbitration and mediation for most commercial disputes.
According to Morgan, ICC has "reserved the idea of doing online ADR later," but he said this possibility would not be explored until after the facilitation system is up and running.
Founded in 1919, ICC's members include thousands of companies and business associations from over 130 countries. Among other things, the chamber promotes international trade and investment, promulgates voluntary rules for business transactions, and runs the International Court of Arbitration, one of the world's leading arbitral forums.
Partnerships to Be Explored
The online ADR clearinghouse has been given the green light by ICC's executive board, and the chamber plans to begin exploring potential partnerships with international consumer groups and academic institutions to put together "a global facilitation system for online ADR," according to ICC's Baker.
Baker said ICC will conduct surveys of online ADR providers, consumer groups and other interested parties to "identify online ADR providers and services" and to ensure the broadest coverage of the facilitation system. The system also will include providers not yet on the Internet, because not all parties will have online access in their region, he added.
According to Baker, varying standards exist for online ADR providers around the world, and the system "would probably not look to exclude providers in order to give people as broad a selection as possible." Online ADR providers will be examined for services and capabilities, but ICC does not intend to establish specific standards for inclusion in the system, he said.
The service ultimately will "boost consumer confidence in e-commerce and make sure consumers are confident" in particular of getting redress for Internet-based transactions that go awry, he said. ICC is "considering several different ways to fund the initiative" and hopes to have the system designed by the fall of 2001, Morgan said.
System Seen as Necessary to Online ADR Infrastructure
Ethan Katsch, co-director of the Center for Dispute Resolution and Information Technology at the University of Massachusetts at Amherst, said the proposed ICC system is "part of the ongoing building of a global infrastructure for widely available online ADR for consumers and others" and is "welcome" because it makes "more information available by an experienced organization."
According to Katsch, the system could be a positive addition because "online dispute resolution has some above the surface ventures and needs to be supported by less visible informational components," which this system seems able to provide.
Katsch said ICC likely chose to pursue the clearinghouse facilitation system instead of its own ADR system because it "would have taken some investment to get into consumer disputes," and ICC's involvement in ADR is centered on resolving business-to-business disputes through arbitration. ICC may have realized there are "already significant online ADR" providers and "didn't feel like competing," Katsh added.
David Johnson, an attorney with Wilmer Cutler & Pickering in Washington, D.C., said "any widely supported effort to call attention to online ADR is a good thing" and this system could help identify how the "various systems differ in how easy they make it to resolve disputes." For the ICC service to be truly effective it will need to "distinguish between the stronger and weaker providers" of online ADR services and processes and could "help catalogue the differences between the various online ADR providers," he added.
According to Johnson, it is "useful that it [ICC] is a neutral organization" and could help with the growth of online ADR because "ICC is a group that favors the growth of e-commerce and has an institutionalized desire to grow and promote e-commerce." The system also could "raise public awareness of the availability of online ADR and will help consumers ask for it [online ADR] by name" when dealing with business, he added.
Steve Abernethy, president and chief executive officer of online ADR provider SquareTrade, said the ICC system could be beneficial by "helping people understand the different ADR processes" and could act as a "check for the marketplace systems" designed to provide online ADR to consumers.
However, Abernethy said "given the amount of online ADR providers out there it would be difficult for them [ICC] to stay on top of things," and online "marketplaces will provide the services necessary" to resolve B-to-C disputes over e-commerce transactions. The marketplaces "will have the stronger influences on consumers and businesses" because they will be the place consumers look to when seeking redress for their e-commerce disputes, he added.
About SquareTrade
SquareTrade is the leading innovator in online trust development, reputation enhancement and dispute resolution for e-commerce transactions. SquareTrade's critical e-commerce infrastructure gives buyers and sellers--both consumers and businesses--the confidence they need to conduct transactions online. SquareTrade addresses the all-important issue of building trust in e-business relationships, which is one of the essential enabling factors required before there will be substantial transaction volume in online marketplaces. The digitally watermarked SquareTrade Seal establishes an online seller's customer service track record, helps build buyer confidence and serves as the first line of defense against fraud. The Seal is backed by SquareTrade's patent-pending Internet-based dispute resolution service and international network of 250 mediators and arbitrators. Founded in 1999 and today with over 60 full-time employees, SquareTrade is based in San Francisco, Calif. For more information, employment opportunities or to contact SquareTrade representatives, visit the Web site at www.squaretrade.com. |
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