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Property owners in Durham, N.C., upset about their tax bills now can go online and challenge them – often with a satisfactory result – without ever talking to anyone in county offices.

New Yorkers with insurance disputes soon will have them resolved in the cloud.

Those are just two examples of how online dispute resolution is changing and broadening the scope of mediation and arbitration. Where some see the awakening of a disruptive technology, others see an opportunity for mediators to assist in resolving a greater number of disputes.

“We believe we are going to bring more and more disputes to the mediation process and alternative dispute resolution professionals,” said Scott Carr, president and CEO of three-year-old Silicon Valley startup Modria. While there are other players in the marketplace such as Rezoud Corp. and Youstice, Modria appears to have become to online dispute resolution what Google is to Internet search engines.

henderson Henderson

Modria received a $5 million round of venture capital funding last year and since has parlayed that into contracts with municipalities including Durham County, N.C.; and agencies such as the American Arbitration Association, which processes more than 100,000 New York No Fault insurance disputes annually. The association announced that this quarter it will begin using Modria’s platform to mediate disputes.

In its short existence, Modria already claims to have processed more than 400 million disputes.

“I think it will be a necessary part of the skill set that mediators will need to do their work,” Ethan Katsh said of online dispute resolution. Katsh chairs the Modria board of advisors and is co-founder of the Center for Information Technology and Dispute Resolution at the University of Massachusetts.

From giant roots

Colin Rule and Chittu Nagarajan co-founded Modria and hold leadership positions in the company. Both have backgrounds in ADR and worked to develop the online dispute resolution systems at online commerce giants eBay and PayPal. Because of their sheer volume of customers, those companies had to learn to efficiently handle disputes to build trustworthy reputations.

Modria’s co-founders “really dedicated their careers to how to apply Internet technology to resolve disputes,” Carr said. Because eBay and PayPal had developed systems that were capable of resolving 90 percent of complaints without intervention of a neutral party, the founders believed the same strategies could be applied to a wider variety of disputes.

“The market itself is large. We estimate 1 to 3 percent of all transactions online and offline result in some dispute,” Carr said. Companies and organizations typically have in-house systems to deal with dissatisfied customers, but Carr believes those systems can gain efficiency and better resolve disputes through an always-accessible online platform.

“We’re all used to anytime, anywhere access to services and products, and we find disputes fall into the same category,” he said. “I don’t want to wait till 9 a.m. Monday,” to lodge a complaint.

People who use Modria’s dispute resolution platforms may never realize it, Carr said. For instance, the Durham, N.C., homeowner with a tax bill beef will go to the county’s website and use forms that Modria has developed for the county. The taxpayer also has the option of uploading exhibits and supporting information for an appeal.

The data is stored securely on cloud servers. In cases where online resolution isn’t possible, neutral mediators or arbitrators get involved, and the initial paper trail from the Web-based complaint will be available.

“What’s happening is we’re building an electronic case file,” Carr said. And in the case of government workers in Durham, their time is freed to focus on tougher tax-appeal cases that may be likelier to wind up in litigation.

Modria doesn’t currently have any clients in Indiana, but it’s pitching to them.

“I can think of many government agencies in Indiana that can benefit from online dispute resolution systems,” said Modria adviser Ruel Williamson, who has been in discussions with officials from public and private organizations in the state. Along with property tax appeals, he said public-health service claims and business-license disputes also could be well served.

“Many government agencies have taken the first step by allowing people to file claims and processes online,” Williamson said. “The next step is to fully embrace an online dispute resolution methodology that helps take a filing through resolution.”

What lies ahead?

Unresolved for alternative dispute resolution professionals is whether Modria and other online dispute resolution companies will bring new sources of business or undercut the work mediators currently do.

Rezoud, a St. Petersburg, Fla.-based startup, announced in March a proprietary “technology-enhanced dispute resolution” system that it promoted as a “disruptive innovation.”

“Dispute resolution and legal industries have become monolithic, ineffective, time-consuming, costly and non-consumer friendly,” the company said in a news release.

Indiana University Maurer School of Law Professor Bill Henderson has written about Modria and online dispute resolution’s portent for ADR, but he doesn’t quite envision such a sea change. “It’s a breakthrough when you think about it.”

A huge number of disputes don’t get resolved because of the small underlying value, Henderson said, and he sees Modria and others opening this latent market. “These are kind of low-stakes, highly voluminous types of transactions where disputes are going to arise,” he said.

Henderson said the minds behind Modria ran with protocols developed through the Harvard Negotiation Workshop, which found some near-universal bases for dispute resolution. “If we follow a few simple rules, most disputes go away,” Henderson said of the Harvard protocols.

It’s human nature to complain, pleasing when a complaint is heard, and rewarding when it’s resolved. “People are predictable,” Henderson said. “We think we’re special snowflakes.”

Simply asking a complainant what would make her happy can resolve a good number of complaints quickly and without complication, for example. Responses also may help organizations improve their processes and customer satisfaction.

Katsh said ADR practitioners should find Modria useful. “It will increase their effectiveness,” he said. “Technology, in general, in all our lives has provided something new that we have to live with; and a lot of it is complicated, and a lot of it is empowering.

“I think Modria has the technology to handle more disputes than any previous dispute resolution company, so it has a large investment in technology, and there’s a need for this technology,” Katsh said.

Henderson likened Modria’s entrance into ADR to an emergency room triage setting: The most serious cases are going to require the most personal attention. Modria and other online dispute resolution providers are situated to take care of those that just might need an aspirin or bandage, he said.

But he also noted that venture capitalists have been very receptive of Modria’s platform and promise.

“What maybe lawyers should be thinking about is Modria might move upstream and begin to eat into the business a little bit more over time,” Henderson said.•

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  1. I have been on this program while on parole from 2011-2013. No person should be forced mentally to share private details of their personal life with total strangers. Also giving permission for a mental therapist to report to your parole agent that your not participating in group therapy because you don't have the financial mean to be in the group therapy. I was personally singled out and sent back three times for not having money and also sent back within the six month when you aren't to be sent according to state law. I will work to het this INSOMM's removed from this state. I also had twelve or thirteen parole agents with a fifteen month period. Thanks for your time.

  2. Our nation produces very few jurists of the caliber of Justice DOUGLAS and his peers these days. Here is that great civil libertarian, who recognized government as both a blessing and, when corrupted by ideological interests, a curse: "Once the investigator has only the conscience of government as a guide, the conscience can become ‘ravenous,’ as Cromwell, bent on destroying Thomas More, said in Bolt, A Man For All Seasons (1960), p. 120. The First Amendment mirrors many episodes where men, harried and harassed by government, sought refuge in their conscience, as these lines of Thomas More show: ‘MORE: And when we stand before God, and you are sent to Paradise for doing according to your conscience, *575 and I am damned for not doing according to mine, will you come with me, for fellowship? ‘CRANMER: So those of us whose names are there are damned, Sir Thomas? ‘MORE: I don't know, Your Grace. I have no window to look into another man's conscience. I condemn no one. ‘CRANMER: Then the matter is capable of question? ‘MORE: Certainly. ‘CRANMER: But that you owe obedience to your King is not capable of question. So weigh a doubt against a certainty—and sign. ‘MORE: Some men think the Earth is round, others think it flat; it is a matter capable of question. But if it is flat, will the King's command make it round? And if it is round, will the King's command flatten it? No, I will not sign.’ Id., pp. 132—133. DOUGLAS THEN WROTE: Where government is the Big Brother,11 privacy gives way to surveillance. **909 But our commitment is otherwise. *576 By the First Amendment we have staked our security on freedom to promote a multiplicity of ideas, to associate at will with kindred spirits, and to defy governmental intrusion into these precincts" Gibson v. Florida Legislative Investigation Comm., 372 U.S. 539, 574-76, 83 S. Ct. 889, 908-09, 9 L. Ed. 2d 929 (1963) Mr. Justice DOUGLAS, concurring. I write: Happy Memorial Day to all -- God please bless our fallen who lived and died to preserve constitutional governance in our wonderful series of Republics. And God open the eyes of those government officials who denounce the constitutions of these Republics by arbitrary actions arising out capricious motives.

  3. From back in the day before secularism got a stranglehold on Hoosier jurists comes this great excerpt via Indiana federal court judge Allan Sharp, dedicated to those many Indiana government attorneys (with whom I have dealt) who count the law as a mere tool, an optional tool that is not to be used when political correctness compels a more acceptable result than merely following the path that the law directs: ALLEN SHARP, District Judge. I. In a scene following a visit by Henry VIII to the home of Sir Thomas More, playwriter Robert Bolt puts the following words into the mouths of his characters: Margaret: Father, that man's bad. MORE: There is no law against that. ROPER: There is! God's law! MORE: Then God can arrest him. ROPER: Sophistication upon sophistication! MORE: No, sheer simplicity. The law, Roper, the law. I know what's legal not what's right. And I'll stick to what's legal. ROPER: Then you set man's law above God's! MORE: No, far below; but let me draw your attention to a fact I'm not God. The currents and eddies of right and wrong, which you find such plain sailing, I can't navigate. I'm no voyager. But in the thickets of law, oh, there I'm a forester. I doubt if there's a man alive who could follow me there, thank God... ALICE: (Exasperated, pointing after Rich) While you talk, he's gone! MORE: And go he should, if he was the Devil himself, until he broke the law! ROPER: So now you'd give the Devil benefit of law! MORE: Yes. What would you do? Cut a great road through the law to get after the Devil? ROPER: I'd cut down every law in England to do that! MORE: (Roused and excited) Oh? (Advances on Roper) And when the last law was down, and the Devil turned round on you where would you hide, Roper, the laws being flat? (He leaves *1257 him) This country's planted thick with laws from coast to coast man's laws, not God's and if you cut them down and you're just the man to do it d'you really think you would stand upright in the winds that would blow then? (Quietly) Yes, I'd give the Devil benefit of law, for my own safety's sake. ROPER: I have long suspected this; this is the golden calf; the law's your god. MORE: (Wearily) Oh, Roper, you're a fool, God's my god... (Rather bitterly) But I find him rather too (Very bitterly) subtle... I don't know where he is nor what he wants. ROPER: My God wants service, to the end and unremitting; nothing else! MORE: (Dryly) Are you sure that's God! He sounds like Moloch. But indeed it may be God And whoever hunts for me, Roper, God or Devil, will find me hiding in the thickets of the law! And I'll hide my daughter with me! Not hoist her up the mainmast of your seagoing principles! They put about too nimbly! (Exit More. They all look after him). Pgs. 65-67, A MAN FOR ALL SEASONS A Play in Two Acts, Robert Bolt, Random House, New York, 1960. Linley E. Pearson, Atty. Gen. of Indiana, Indianapolis, for defendants. Childs v. Duckworth, 509 F. Supp. 1254, 1256 (N.D. Ind. 1981) aff'd, 705 F.2d 915 (7th Cir. 1983)

  4. "Meanwhile small- and mid-size firms are getting squeezed and likely will not survive unless they become a boutique firm." I've been a business attorney in small, and now mid-size firm for over 30 years, and for over 30 years legal consultants have been preaching this exact same mantra of impending doom for small and mid-sized firms -- verbatim. This claim apparently helps them gin up merger opportunities from smaller firms who become convinced that they need to become larger overnight. The claim that large corporations are interested in cost-saving and efficiency has likewise been preached for decades, and is likewise bunk. If large corporations had any real interest in saving money they wouldn't use large law firms whose rates are substantially higher than those of high-quality mid-sized firms.

  5. The family is the foundation of all human government. That is the Grand Design. Modern governments throw off this Design and make bureaucratic war against the family, as does Hollywood and cultural elitists such as third wave feminists. Since WWII we have been on a ship of fools that way, with both the elite and government and their social engineering hacks relentlessly attacking the very foundation of social order. And their success? See it in the streets of Fergusson, on the food stamp doles (mostly broken families)and in the above article. Reject the Grand Design for true social function, enter the Glorious State to manage social dysfunction. Our Brave New World will be a prison camp, and we will welcome it as the only way to manage given the anarchy without it.

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