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The role of the Joint Research Centre of the EC is to provide scientific support to the
EU policy-making process by acting as a reference centre of science and technology
for the EU. This report has been prepared by the Joint Research Centre in the frame
of its institutional support programme to the EC DG Information Society. The opinions
and views expressed in this report do not represent the official opinions and policies
of the European Commission.
Marc Wilikens
Joint Research Centre
Marc.Wilikens@jrc.it
ADR: Technological challenges 3
1 Introduction
Efficient out-of-court dispute settlement mechanisms are crucial for building
consumer confidence in e-commerce, i.e. building e-confidence. Technology
plays an important role as facilitator in this process. The Internet will become
increasingly accessible to larger parts of the public. Moreover, the ubiquity of
open Web-centred technologies (browsers, downloadable code), facilitates
information access and Internet navigation from the desk top and mobile
terminals. These on-line developments provide unprecedented opportunities
that when properly harnessed could provide citizens and enterprises, in
particular SME’s with effective and easy access to redress mechanisms. There
are, however, technological challenges that need to be overcome if there is to
be a swift and successful deployment of on-line redress mechanisms,
particularly in a cross-border environment. On-line systems are still in their
infancy and new concepts need to be further developed and assessed against
commonly agreed quality criteria.
This report provides a digest of technological challenges related to the
deployment of on-line out-of-court dispute settlement systems in an e-
commerce environment. It is derived from the following information:
• The Joint Research Centre (JRC) study and related EC workshop held on
21st March, 2000 on “Out-of-court dispute settlement systems for e-
commerce”. The report describes the regulatory framework, provides a
survey of on-line initiatives and a description of emerging business models
for the deployment of out of court dispute settlement systems. The study
report also identifies an initial classification of technological criteria for
ensuring accessibility and trustworthiness in online dispute settlement
systems. A description of these technical criteria is contained in the annexe
of this document.
• Conference on the launch of EEJ-NET: towards a European Extra-Judicial
Network for resolving consumer disputes, Lisbon on 5-6 May, 2000. In
particular the workshop on communications issues focused on technology.
• International forum on Alternative Dispute Resolution of Commercial
disputes, Milan 1 June, 2000. The forum, organised by the Italian Institute
for foreign commerce and ADR Center, Rome, focused on mediation and
conciliation procedures for dispute management in International commerce.
• The US Department of Commerce/Federal Trade Commission Conference
on “Alternative dispute resolution for consumer transactions in the
borderless online marketplace”, held in Washington on June 6-7, 2000.
Chapter 2 describes the drivers that shape the context in which alternative
dispute settlement systems are being deployed and that impact the
technological challenges.
Chapter 3 outlines technological challenges that are grouped under three
categories: business modelling, tools for stakeholders, large-scale on-line
platforms.
ADR: Technological challenges 4
1
ADR- Analysis of experiences, requirements and requests from Italian export companies. Study in Italian
language by Istituto nazionale per il Commercio Estero, Rome, January 2000.
ADR: Technological challenges 5
3 Challenges
3.1 Business modelling
Comprehensive business models for on-line confidence building are needed
that guide the consumer through the different options available for redress in a
visible and transparent way. These models must cope with integration aspects
with:
• Emerging B2C e-commerce models. This implies on the consumer side,
integration with the stages in the consumer transaction processes and on
the business side, integration with internal procedures for consumer
support and with third-party dispute resolution services. Both for consumer
and business, integration with next generation (micro) payment systems
should be investigated.
• Emerging cross-border initiatives for resolving consumer disputes that are
sector specific and of a more generic nature such as EEJ-NET.
Cost/benefit analysis models need to be developed to further business cases
for consumer relationship management in an on-line environment and for on-
line dispute settlement services.
Empirical evidence on the nature and volume of disputes and performance
measures of working systems would support cost/benefit analysis, e.g. based
on incident collection exercises with results published in anonymous manner.
3.2 Tools for parties involved in dispute resolution
Within existing prototype on-line tools2 there is currently a wide range of levels
of computer support. They can be broadly categorised under the following
types:
• Web sites with simple communication facilities such as e-mail.
2
Refer to JRC study report for an inventory of online initiatives. http://dsa-isis.jrc.it/ADR
ADR: Technological challenges 7
• Blind bidding tools that allow two parties to reach an agreement on financial
claims without any human intervention. Their scope is limited to certain
kinds of disputes (e.g. insurance claims).
• Group process support and decision aid tools, including structured case
filing, interactivity between parties (e-mail, web conferencing) so far
predominantly applied to niche markets or particular dispute resolution
mechanisms.
In a levelled “hierarchical” approach to resolving consumer disputes, a number
of complementary consumer redress mechanisms could provided. These
mechanisms range from complaint resolution mechanisms (e.g. organised
internally) to third-party mediation and to the more formal proceedings that
involve third-party decision makers (e.g. arbitration). A number of generic
functions for managing the various stages of a dispute that accommodate the
different mechanisms can be defined (filing of complaint, processing,
settlement) but each mechanism will have its specific functional requirements.
For reasons of cost-effectiveness, tools for managing the various stages of a
dispute should be integrated in cheap and extensively deployed Internet access
tools such as web-browsers. This implies that the various parties involved in
dispute settlement (consumers, traders, third-parties) would need to upload
from a remote site their relevant applications within their web browser, perhaps
by mobile code such as Java applets. This will also promote widespread
accessibility for large segments of the public.
In the above context, the challenge for tool providers lies in integrating tools
simple to use by all the parties and that can be easily configured and
customised according to the business process needs of particular sectors and
to specific needs of a particular dispute resolution mechanism. Moreover a
number of unresolved issues need to be addressed:
• As the transition to on-line systems will be gradual, access needs to be
ascertained by a seamless combination of traditional means of
communication and electronic means.
• Traceability of status of complaint/dispute by the consumer to better control
the finality of the process.
• Better useability for consumer by means of on-line forms combined with
translation facilities.
• Interactivity aspects in a virtual environment must be studied and reviewed
carefully, in particular for mediation in which face-to-face contact is still
considered important.
• Personalised environments, combined with appropriate security protection,
where parties can access a particular case and find all necessary
information, status of the case, etc.
• Evidence collection, fact finding by third party in an environment of multi-
stakeholder and tightly coupled e-commerce transactions. Checking of
applicable rules in multi-jurisdictional environments. Agent technology could
be experimented for these issues.
Related to security functions, issues include:
• Application of e-signature for authentication purposes of the dispute
submitted by the consumer and the settlement agreement/award by the
involved parties considering the scalability and cost-effectiveness of
solutions.
ADR: Technological challenges 8
authentication
confidentiality
interoperable
Interactivity/
integration
anonymity
affordable
scaleable
traceable
language
available
useable
control
secure
visible
minimum
guarantees
independence X
transparency X
adversarial X X X
effectiveness X X X X X X X X X
legality X X X
representation X X X
liberty X
3
http://dsa-isis.jrc.it/ADR/report.html
ADR: Technological challenges 10
The parties should be given on-line tools to trace the status, time history as
well as position in the process, of a complaint/dispute.
• Evidence traceability: Fact finding, evidence collection and their traceability
are a few examples of tasks that might become complex in out-of-court
dispute settlement processes and are usually very context dependent. An
E-commerce transaction in itself involves more parties than just the seller
and buyer. For instance, a typical retail transaction would include processes
of the financial institution and/or credit card company for payment, of the
logistics company for delivery of goods, etc. New types of intermediaries in
e-commerce, such as brokers or automated shopping agents increase the
novelty or complexity of transactions. All these processes individually could
be at the origin of a dispute. It is conceivable that the creation of advanced
computer tools, such as artificial software agents, may support decision-
makers in the fact finding in a multi-party environment.
available and timely: Expectations for timely response from the complaint or
dispute handling body will rise in an Internet environment. As the number of
transactions increases and the ease with which disputes may be resolved, the
numbers of complaints will rise significantly. This may impose significant
constraints on the availability of on-line processes and increase pressure for
swifter resolutions.
useable: Use-ability might be substantially improved through making available
to the consumer simple electronic complaint forms perhaps linked to automatic
translation facilities. E-mail, chat conference rooms, videoconferencing are
communications means that some on-line out-of-court dispute settlement
services provide on a single service basis. Usually they are not integrated.
Web-based multi-media tools would better exploit convergence of media into
an integrated tool-set.
language: Cross border disputes will invariably involve businesses and
consumers with little or no knowledge of each other’s languages. Although
cost-effective and timely dispute resolutions would undoubtedly be enhanced
by fully automated computer translation between the concerned languages,
some guarantee of semantic equivalence between the translations may be
required before trust can be placed on such techniques. As first measure,
automatic translation of complaint forms could be aimed for.
affordable: It is generally accepted that the costs for the parties engaging in
out-of-court dispute settlement, in particular for low-value transactions should
be low. This is particularly the case for consumers. To ensure that the systems
are as cheap as is possible from the technical point of view for the consumer,
affordable off-the-shelf commercial technologies should be used for user
access such as standard web browsers;
interoperable: Different aspects of various existing and newly developed
systems need to be reconciled. On-line systems will have to co-exist with off-
line systems and be deployed on international scale in a distributed way. Also,
so far, out-of-court dispute settlement schemes for consumers have been set
up predominantly in a localised or national environment. In cross-border
environments, existing schemes need to operate together and act as a
network. Moreover, existing schemes need to inter-operate with clearing house
systems of a generic nature and with sector specific and specialised schemes
(e.g., financial services, advertising);
scaleable: Large-scale systems would have to be developed not just from the
infrastructure point of view but also in terms of potentially large numbers of
complaints/disputes to be handled.
ADR: Technological challenges 11