Online Dispute Arbitration

With millions of people using online services, disputes over postings are inevitable. The Virtual Magistrate offers arbitration.

by / August 31, 1996
Taking a dispute to a courthouse can cost a lot of money and a lot of time, and may not even lead to a conclusive resolution to the problem. Enter the Virtual Magistrate, an online arbitration project aimed at providing Internet users with a neutral third party to solve disputes without going to court. As an added bonus, there could be times when a lawyer may not be involved in a case at all.

A clear advantage to the Virtual Magistrate over traditional courts is the speed and efficiency with which a dispute can be resolved, said George Friedman, senior vice president and national director of online services for the American Arbitration Association. "There is no telephone tag or faxes. It becomes expeditious."

It could also provide a place for disputes to be handled. Access to civil courts has generally been decreased as limited court resources are spent on trying criminal cases.

A guiding principle of the Virtual Magistrate, said Robert Gellman, project director, is to "keep it out of the courts, and find a calm, rational way to solve disputes."

The Virtual Magistrate, which began earlier this year, doesn't award damages. "Our decisions are about if a posting should stay," Gellman said.

All case matters are handled online, with briefs and rulings distributed by
e-mail. When someone submits a dispute, the facts are collected and a committee decides if it is an appropriate case for the Virtual Magistrate. If so, a $10 processing fee is paid by the plaintiff and the case is assigned to one of eight magistrates.

Some submissions have been rejected, Gellman said, because they would be better for mediation, where a third party tries to persuade the opposing parties to make an agreement, rather than arbitration, where a decision is handed down by a third party, such as the Virtual Magistrate. There have also been some cases raised, then resolved on the proverbial courthouse steps, which didn't proceed to Virtual Magistrate arbitration.

"This is a pilot project, and we're not sure what will come about or how they will use it," Gellman said. "We don't know if there is a market for this."

The project welcomes copyright infringement cases, Gellman said. Challenging what could be considered an obscene posting is another dispute which could be brought, he explained. The magistrate would judge such a case based on the rules of a particular forum. If it is a sex-oriented forum, it would be less likely to be considered inappropriate than if the message is posted in a children's forum. This could be the online equivalent to local standards, which is a test used in regular courts in obscenity cases.

Bringing a case before a Virtual Magistrate requires voluntary agreement by both sides to participate and abide by the decisions, just like regular arbitration. Because it is an extra-court process, the Virtual Magistrate has few enforcement mechanisms beyond peer pressure and the agreement of the parties.

Noncompliance could, in some circumstances, be taken to civil court under breach of contract or other state laws by a party, but nothing like this has even been threatened with the project. "There has to be a degree of good faith for this to work," Gellman said.

The project has already executed its first case, Tierney and Email America, which had to do with a posting that the plaintiff asserted violated his right to privacy. An online company posted a notice on America Online (AOL) offering to sell e-mail address lists of as many as 20 million accounts.

James Tierney asserted that this was an invasion of privacy and an offering that could encourage excessive junk mail, and wanted the posting removed. The company which did the posting did not respond to repeated invitations by the Virtual Magistrate. But AOL, to its credit, agreed to participate in the Virtual Magistrate and abide by the decision.

Arguments and evidence were sent electronically to a magistrate, who narrowly ruled within a few days that it was appropriate for AOL to remove the message based on AOL's own rules.

"The subject matter was not earth-shattering, but we showed that it can work," said N.M. Norton, who acted as magistrate and is a partner with Wright, Lindsey & Jennings in Little Rock, Ark. He also served on the National Information Infrastructure Advisory Council.

One potential group which could benefit from the project would be systems operators, or sysops, who are often caught in the middle of a dispute between a poster and a person offended by the posting. There could be demands to remove the message and/or kick the poster from the online service, while the person or company that makes the post could argue that such removal could violate the service agreements, free speech protections, or other things. A sysop could be caught in the middle of such a dispute, and welcome a third-party arbitrator.

Another scenario could be someone running a discussion group for profit. If a person repetitively makes what some participants consider inappropriate postings, it could sour other forum customers. Then the sysop would have to balance the interest of the posting customer and the rest of the participants. In that case, again, the sysop may want a third party to intervene.

While no governments had applied to use the magistrate by early summer, the potential to be helpful in a dispute is there. With the rapid increase in government online systems, disputes over postings are bound to occur. "As state and local government increasingly asserts its copyright interests, there could be a concern," Gellman said. "They are on the Net like anyone else, and a lot of things can go wrong."

Gellman noted that a lot of local governments are getting on networks in a generally informal way. Disputes could arise in constituent chat areas, for example, and there may not be any formal rules on how to handle a situation, such as what some may consider an inappropriate posting. "This is a way to solve disputes without lawyers and courts," Gellman said.

The program could be an excellent forum for some types of cases, said Judge Bert Glennon Jr. of the Los Angeles Superior Court. "In my view, it is the wave of the future."

Glennon said an online magistrate could work on disputes where the facts are agreed upon and there is no question of witness credibility. "In those kinds of situations, it could have an impact" on the regular courthouse docket, said Glennon, who conducts and writes about alternative dispute resolution, but is not connected with the Virtual Magistrate project. "In cases that don't require witnesses," he said, "it would be a good forum."

The project is physically located on a server at Philadelphia's Villanova Law School. But the people running it are at various locations, and some participants have never even met in person. Gellman is in Washington, D.C., and magistrates are located around the country. Contributors to the project include the Cyberspace Law Institute, the National Center for Automated Information Research and the American Arbitration Association.

If enough disputes are brought to the Virtual Magistrate, precedent and other rules could be generated over time. "If we get enough of one kind of case," Gellman said, "we could end up with some Netiquette, or even a common law of the Internet."

It could also help our litigious society resist the temptation to go to court over some online matters. "This may be a way for the Net to police itself," Gellman said. "We are not suggesting that this is a magic solution. But if it can be something useful, then it has been successful."

For information on ground rules and how to submit disputes, contact Virtual Magistrate at: .