American Bar Association E-Commerce and ADR Task Force Summer 2002 Karol K. Denniston Task Force Vice Chair karolkden

1. American Bar Association E-Commerce and ADR Task Force Summer 2002Karol K. DennistonTask Force Vice Chairkarolkdenniston@paulhastings.com

2. Task Force Members • Chair: Bruce Meyerson • Vice-Chair: Karol Denniston • Members: Jeremy Mishkin, Paul Dubow, Terry Trantina, Denis Rice, David Larson, Sandra Sellers, Louise Ellen Teitz, Harry Endsley, Leonard Mackey, Lawrence Graves, and Roderick Mathews

3. Task Force Overview • Genesis • Formation • Mission • Issue Identification • Approach & Activities • Task Force Recommendations

4. Genesis • Outgrowth of ABA Business Law Section’s Global Cyberspace Jurisdiction Project • July 2000 Report Examined Internet Related Dispute Jurisdictional Issues • Report Saw Need to Address E-Commerce Transaction Dispute Resolution Issues • Report Foresaw Need for Resolution of E-Commerce B2B & B2C Disputes On-line

5. Task Force Formation • Five ABA Sections: Dispute Resolution, Business Law, Litigation, International Law and Practice, and Intellectual Property • Partnership between ABA and the Center for Law, Commerce & Technology at University of Washington Law School

6. Mission • Examine E-Commerce Dispute Resolution • B2C • B2B • Domestic • International • Identify Issues Requiring Solutions • Determine ABA’s Appropriate Role & Contributions to Solutions

7. Issues • New, Developing & Changing E-Commerce Environment • No Sure Workable Existing Models • New Approaches Untested • Some Promising, e.g., Trust Marks • Gov’t Trying to Determine Role (Foster v. Regulate) • Consumer Confidence Lacking • E-Business Needs Certainty and Rational Economics • Lack of Data about E-Commerce Dispute Avoidance & Dispute Resolution Processes • ODR Provider Need & Practices Developing

8. Task Force Activities • Review Existing Business and Legal Literature • Issue Identification and Analysis • B2C and B2B Issues • Initiate Broad Contacts with Business, Consumer Groups, Gov’t Agencies and On-line Dispute Resolution (ODR) Providers • Outreach through Open Meetings & Dialog • Establish Website: http://www.law.washington.edu/ABA-eADR

9. Public Meetings • January 27, 2001 - New York • Included AAA, CPR, BBB, FTC Bureau of Consumer Protection, U.S. Attorneys General, Square Trade, eResolution,Online Resolution

10. Public Meetings • February 17, 2001- San Diego • iCourthouse; ICC; Deputy Director, Ministry of Economy, Trade and Industry, Japan; JAMS/eJams; Webmediate; Squaretrade; Geotrust; Resolveitnow; SettlementOnline; MyCounsel; PrivateJudge; OnlineResolution; Hewlett-Packard; and 123Settle

11. International Outreach • Paris ICC Meeting -- May 29, 2001 • London Meeting -- May 30, 2001 • Teleconferences with Pacific Rim and Latin/South America – September 2001 • Circulate Online Foreign Language Surveys • Outreach to International Bar Associations

12. Task Force Trial Balloon • Initial Draft Report Focused on Promising “Trust Mark” Approach & Provider Standards • Either ODR Provider or Vendor Trust Mark • Provider Due Process Standards Built In • Public Input • Trust Marks Valuable • No On-line E-Business or ODR “Industry” • Don’t Get in the Way, Be Contributor • Jurisdiction Issue Still Roadblock to International ODR • Consumer Needs Start Before “Dispute Resolution” • EU and FTC Making Parallel Efforts

13. New Focus: Consensus • Task Force Reacts to Input • Look to Players to Develop Areas of Consensus in Changing Environment • Focus on Current Consumer Needs • Explore Means of Providing Consumers with Necessary Dispute Resolution Information • Identify E-Business Pre & Post-Dispute “Best Practices,” including ODR Provider Best Practices • B2B Taking Care of Itself, Far Fewer Issues • Task Force Will Not Draft ODR Provider “Standards”

14. FTC Parallel Efforts • Starts Consumer Website “eConsumer.gov” • Seeking Public Input on FTC Role • Consumer Education • Domestic • International • On-line Shopping Tips • ODR Provider Standards • ODR Recommendations

15. Example No. 1 Alternative Dispute Resolution What is Alternative Dispute Resolution (ADR)? ADR involves a process through which you can contact an ADR provider, file a complaint online, have the other party respond online, and resolve the entire dispute from the comfort of your own home with no need to travel and minimal cost. What kinds of online ADR are available? Mediation and arbitration are already well known and used in the offline world, and are increasingly available online. Automated negotiation is a new form of ADR that takes special advantage of the online environment. What is mediation? In mediation, a neutral third party - a mediator - helps you and the other party try to resolve the problem through facilitated dialogue. However, it's up to you and the other party to reach an agreement. What is arbitration? Arbitration involves a neutral third party - an arbitrator – who gathers information from you and the other party and makes a decision. Sometimes, you are legally bound by the decision. What is automated negotiation? Automated negotiation is a computerised process, mostly designed to settle disputes over cash amounts. It is often based on a system of blind bidding, through which the parties enter successive bids in an attempt to reach agreement, but without knowing what the other party has offered. The process concludes when the bids become sufficiently close to one another and the computer program can propose a solution. Read the terms and conditions of an automated negotiation carefully, as the outcome generated by the computer can be a legally binding contract.

17. Example No. 6 Alternative Dispute Resolution The following ADR providers have been selected by econsumer.gov to help you resolve your complaint without having to go to court. econsumer.gov members cannot guarantee any provider’s reliability. Each of these providers has agreed to meet certain basic criteria for resolving disputes between consumers and businesses. ! For usual B2C disputes • ACME Dispute Resolution Company ! For cross-border disputes only • Anytime-Anywhere Resolution ! For online auction disputes • Stuck-with-it.com

18. Example No. 6 Basic Criteria for econsumer ADR Providers Each ADR provider listed has agreed to: ! Allow consumers to resolve disputes completely online ! Allow consumers to resolve their disputes at no cost, or very low cost ! Render decisions in a prompt and independent manner ! Render only decisions that will not be binding on the consumer ! Disclose on a yearly basis: - the number of cases initiated - the number of cases resolved - the percentage of cases resolved in favor of the consumer - the percentage of cases resolved in favor of the business ! Refer to law enforcement information related to those involved in fraud or a pattern of unlawful conduct

19. Task Force Recommendations • E-Businesses Should Educate Customers Before Purchase Regarding “Issue” Resolution Processes • E-Business Should Focus on Pre-Dispute Customer Inquiry & In-House “Problem” Solving • E-Businesses Should Subscribe to E-Business Codes of Conduct & Trust Marks • Codes & Standards for ODR Providers Are Less Important than ODR Provider “Best Practices” • Suggest Creation of New “iADr” Information Center

20. “iADR” Center • Web-Based Non-Profit Entity • Disseminate Domestic & International Consumer Protection Information • Disseminate E-Business and ODR Provider “Best Practice” Information • List & Describe Available ODR Providers • Provide Internet Links to Other Websites (e.g., FTC eConsumer.gov)

21. ODR Provider “Best Practices” • Like E-Business, Emphasis on ODR Provider Disclosures, Not Minimum Standards • Minimum Disclosures (Contact Info, Ts & Cs, Informal & Formal Complaint Processes, Dispute Resolution Costs, Information Privacy & Security, Choice of Law, Trust Mark Compliance, etc.) • Demonstrate Neutral Qualifications, Impartiality, Ethics & Process Fairness • Provider Accountability for Neutrals

22. Contacts • Reporter: Anita Ramasastry • Assistant Reporter: Benjamin Davis • WEBSITE: • eADR@u.washington.edu or • www.law.washington.edu/ABA-eADR