Novojustice

From OUT-LAW News, June 9th, 2011:

“In a statement issued prior to the European Parliament vote Diana Wallis MEP, who reported to the European Parliament’s Legal Affairs Committee in April on the issue of a European contract law, said an optional element within the law would stimulate economic growth.
"It has to be the right optional instrument; we have to get it right," Wallis said in a statement.

"In this case ‘right’ means a high level of consumer protection (indeed higher than in many Member States) an easy and user-friendly system for SMEs to incorporate in their business model as a badge of good practice and service and most importantly no adverse effects on national law. Those are the criteria we have set out for the Commission," the Liberal MEP said.”

Europe is close.  I think they’re going to issue a clarion call for voluntary ODR and contract enforcement schemes in the very near future.

Diane Cardwell in today’s NYT:

“A Web site purporting to expose “the under-belly of the Manhattan Real Estate Market” by reporting on bad broker behavior, lousy landlords and run-down apartments quickly became a bitter forum for accusations against landlords, brokers, real estate industry co-workers and even roommates.

One entry, from February 2007, described a rodent-infested building in the East Village where the super “breaks into the apartments and steals food and money.” Another, that August, complained of an agent who had someone pose as a prospective renter and “pretend to be super excited” about a subpar apartment to make it seem attractive. And another, in January 2008, reported a fight, refuted in the comments section, between Prudential Douglas Elliman agents at a holiday party.

But when the Web site, whose name is too scatological to be published here, began posting items about Christakis Shiamili, the founder of Ardor New York Real Estate, that accused him of anti-Semitism, domestic violence and mistreating his employees, it did not sit so well with him. In a case that went all the way to the state’s highest court, he sued the operator of the site, who turned out to be Ryan McCann, a competitor from the Real Estate Group of New York, now part of MNS.

“I was never subject to such an attack on a personal level,” Mr. Shiamili said, while sitting in his Midtown Manhattan offices last week. “They seemed to be very vindictive people. And they were putting stuff not only on me but my managers. A lot of my managers were freaking out.”

Mr. Shiamili lost that case in a close decision handed down last week from the State Court of Appeals, which held that Mr. McCann and his co-defendant, Daniel Baum, are protected under the Communications Decency Act, which shields Web site operators from liability when they publish and edit material, rather than author it. Through a lawyer, Mr. McCann and Mr. Baum declined to speak about the case. But it opens a window on the gossipy and cutthroat world of residential real estate on the Internet, a place where the cloak of anonymity can help escalate harsh commentary.

“Certainly in residential real estate it’s very gossipy — people want to know what’s going on in each building,” said Steven D. Sladkus, a lawyer at Wolf Haldenstein Adler Freeman & Herz. “People want to know if someone sneezes differently.” The court decision, he said, “could certainly open the doors for a lot of people to say a lot of nasty things.”

Recently, he said, he had asked Curbed to take down negative comments about a real estate board president that he said were untrue; the site’s operators agreed, but made it clear they did not have to, he said…

Chief Judge Jonathan Lippman, writing for the dissent, struck a note of caution, suggesting that the Web site was more than “a passive conduit of this defamatory material,” adding, “An interpretation that immunizes a business’s complicity in defaming a direct competitor takes us so far afield from the purpose of the CDA as to make it unrecognizable.”

Mr. Shiamili has not decided what steps, if any, to take next. He said his business had suffered because of the commentary on the site, and that a prospective employee had decided not to join the company because of things she saw written.

“They weren’t only attacking me, they were attacking other companies,” he said of the site, which is no longer active. “It was a means to diminish their market share.”’

I think the comment of the Judge is particularly interesting: “An interpretation that immunizes a business’s complicity in defaming a direct competitor takes us so far afield from the purpose of the CDA as to make it unrecognizable.”

We’ve got to come up with a means of protecting individuals and businesses like these from being so vulnerable to online slander, especially when there are such clear indications that the posters have conflicting interests in sharing the information.

Paul Sullivan in today’s New York Times:

“…there are children graduating from high school this month and heading to college far from their parents’ watchful eyes. They have the ability to both damage their own reputations and expose their parents to lawsuits if they damage other people’s reputations.

The extreme example of this is Dharun Ravi, the former Rutgers University student accused of using a webcam to spy on his roommate’s intimate encounter with another man. The roommate committed suicide several days later. Mr. Ravi is now facing criminal charges in the case. Whatever the outcome of the trial, Mr. Ravi’s online reputation will be forever affected.

“What we see when kids do something stupid is the target of the attacks going after the parents,” said Peter Piotrowski, senior vice president for claims in the private client division of Chartis.

Even though children are living at college, their primary residence is assumed to be their family home. The lawyer for the person suing can claim that the parents should have been better monitors of their children’s Internet activity, Mr. Piotrowski said.

If your reputation is damaged, the economic consequences can be substantial. But there are steps people can take to alter their online reputation and protect themselves against lawsuits for defamation and libel. What follows is a discussion of the options…”

Seems like this issue is getting a higher profile by the day.  I credit the reputation.com media push for surfacing it.  But this game of raising some content and lowering others is no-win.  Some people promote content, others demote it.  It’s an arms race approach to a problem that should be about justice and truth.

Just put up a new article on Mediate.com talking about the Dutch Innovating Justice awards:

“The largest Online Dispute Resolution platform in the world, the eBay and PayPal Resolution Center, is up for an award from the Dutch Innovating Justice competition. The final three candidates will be selected by online popular vote, so If you’ve got time, please visit the program site and vote for “Modria: The eBay/PayPal Dispute Resolution Center.”

Voting requires simple registration, intended to combat fraudulent votes, which takes a maximum of one minute. (A direct link to the eBay page to vote is http://www.innovatingjusticeawards.com/View-Idea/165?idea=1265.)

The eBay and PayPal Resolution Centers resolve more than 60 million disputes per year in more than a dozen different languages around the world. It is the largest Online Dispute Resolution (ODR) system in the world, resolving disputes in areas as diverse as item payment, item receipt, and item condition. Buyers and sellers who have never met each other face to face can use the Resolution Center process to reach amicable agreements that are enforced immediately. More than 90% of the disputes filed are resolved without requiring the intervention of a third party to render a decision. This system saves time, money, and increases customer satisfaction and trust in transactions…”

Had an interesting exchange with a commenter on the innovatingjusticeawards.com website earlier today – check it out.  Clearly not everyone is as enthusiastic about the Resolution Center as I am.  I guess it’s inevitable, considering how many people have taken cases to the Resolution Center and lost.

Sean Yoong on msnbc.com:

“A Malaysian social activist is apologizing 100 times on Twitter in an unusual settlement with a magazine publisher in a defamation case, his lawyer said Thursday.

The penalty has sparked debate among Internet users about the pitfalls of social media in Malaysia, where authorities have repeatedly warned people to be more cautious about they write on blogs, Facebook and Twitter.

Fahmi Fadzil, an opposition politician’s aide and respected commentator on social issues, claimed on Twitter in January that his pregnant friend had been poorly treated by her employers at a magazine run by BluInc Media.

Fahmi wrote an apology to BluInc on Twitter a few hours after making that allegation, but the company’s lawyers later sent him a letter demanding unspecified financial damages for defamation and another apology in major newspapers, said Fahmi’s lawyer, Syahredzan Johan.

Syahredzan said Fahmi settled the case this week by agreeing to apologize 100 times over three days on Twitter, where he has more than 4,200 followers. Syahredzan declined to say who suggested the terms.

"I’ve DEFAMED Blu Inc Media and Female Magazine. My tweets on their (human resource) policies are untrue. I retract those words and hereby apologize," Fahmi tweeted in a series of identical postings that started Thursday and were repeated about every 30 minutes.”

This seems very cultural, not very effective, and not scalable.  But it is interesting.  I don’t think you could get many complainants to abide by a decision like this in the US.  But I know from my eBay experience that what people really want is often an admission of fault, and an apology, and an assurance that it won’t happen again.  I don’t know if I’d urge other judges to try solutions like this – it’s kind of akin to making people wear a signboard on a street corner stating their crime – but in some geographies it might help to restore trust.

I keep having people tell me they’ve heard a reputation dot com ad on the radio – maybe because they know I’m interested in review accuracy and ODR.  Now my friend Monroe just sent me an article on a competitor to reputation dot com called “Main Street Hub” – here’s the details, from the Forbes blog:

“A pair of Stanford MBAs, Matt Stuart and Andrew Allison, decided to dedicate their not inconsiderable intellects to solving this problem. Their solution is dubbed Main Street Hub (MSH). It charges local businesses between $199 and $299 to do what Stuart called “manag[ing] social media and spread[ing] word of mouth online.”

Small businesses outsource the management of their online presence to MSH.  MSH writes posts on Facebook and Twitter and responds to online reviews. For example, if a negative comment pops up on a social media website, MSH notifies the customer and emails a proposed response that acknowledges the commenter’s pain and discusses how the business will do better in the future. MSH also sends its customers periodic reports on the status of their social media presence.

I thought that MSH’s monthly fees sounded high. But according to Stuart and Allison, competitors charge more. Moreover, MSH customers think that they are getting a good value.

How so? One indirect competitor charges far more — $1,300 to $1,800 a month for “social media management.” And Stuart estimates that small business owners value their time at $100 an hour and believe that MSH is doing far more than two hours worth of work a month.”

I still don’t think this is the best way to handle these issues – shouldn’t inaccurate content be removed instead of buried?  Gaming google and facebook is not the best way to address this challenge.  But it certainly seems like there’s a burgeoning industry out there.  We’ll see how it pans out.

One of the last things I worked on at PayPal was the creation of an animated video offering best practices to sellers on how to avoid and resolve disputes.

It just came out today, and I think it looks great!  Note how we avoid any mention of disputes, conflicts, problems, etc. – we learned that focusing on the positive is much more effective and persuasive for most non-expert viewers.

Let me know what you think in the comments.  Kudos are due to Kate Wambach and Claire Erickson, who were the real brain trust behind the video, and who made it a reality.

Very interested gathering taking place in The Hague at the end of this month – the Law of the Future conference.  And they’re going to have a session on ODR with my friends Graham Ross and Orna Rabinovich-Einy.

From the website:

“The Law of the Future Conference is the culmination point in the long-term Law of the Future Joint Action Programme initiated by HiiL in 2010. A process in which creative thinkers from academia and practice join to reflect on alternative futures for law and legal systems. The programme is based on the premise that prospective thinking about law is not only desirable but also required in order to ensure that law and legal systems do not become obsolete, ineffective or unjust. The aim is to set a world standard in thinking ahead, to guide decision makers today. The outcome of the Law of the Future Joint Action Programme, Law Scenarios to 2030, will be presented at the Law of the Future Conference on 23 & 24 June 2010.”

I wish I could be there!  Hopefully there will be good online participation options…

My friend David Larson has been on the leading edge in thinking about how technology will transform ADR for the last 10 years.  He just let me know about a new piece he wrote for the Nevada Law Journal exploring the topic further.  Here’s the summary:

“Abstract:
Cost reduction is one of the desirable results frequently attributed to Alternative Dispute Resolution (ADR) processes. Although it is reasonable to assume that businesses always are interested in saving money, this goal takes on added importance when the economy is struggling. The cost savings inherent in ADR, which already are significant, can be increased substantially through the strategic adoption of technology. Although I generally do not urge caution when it comes to expanding the ways in which we use technology, we nonetheless must recognize not only technology’s potential benefits but also its possible pitfalls. It is relatively easy to identify some of the cost savings that can be achieved through greater reliance on technology. It can be somewhat more difficult, however, to identify the circumstances in which technology can create unanticipated costs. Fortunately, many of those costs can be avoided.
This article identifies cost efficiencies that technology can bring to dispute resolution processes and also suggest how potential costs can be minimized or avoided. The article begins by examining the Technology Revolution. The emergence of technology mediated dispute resolution (TMDR) as an efficient and cost-effective means of resolving disputes illustrates the significant impact the Technology Revolution has had in the area of ADR. This article suggests why TMDR has not been embraced more enthusiastically. It then explores how we can use technology to make dispute resolution more effective and efficient and explains why, in light of a rapidly maturing technology savvy generation, we might have little choice but to embrace TMDR.
The article next discusses Cybersettle and Smartsettle, two of the established TMDR programs available today. The following section provides additional reasons why the use of TMDR will increase, including the assertion that foreign nations’ decisions to expand TMDR will compel the United States to rely more heavily on TMDR. The article then examines the challenges raised by TMDR. These challenges include power imbalances; the possibility that TMDR software and platforms may exercise greater influence over the dispute resolution process than expected; and questions as to how we can involve artificial intelligence devices, robots, and avatars in our dispute resolution processes. Ideas for integrating artificial intelligence devices into TMDR processes are based upon the manner in which these devices already are being used in the health care industry. The article concludes by examining the dangers and financial costs of relying on avatars and robots, identifies sectors well positioned to use TMDR, and briefly raises the issue of whether we need to regulate TMDR.”

The PDF is available for free, so you should definitely check it out.  “The Technology Revolution is changing the way we interact and inevitably will change the way in which we resolve disputes.”  I couldn’t have said it better myself.

From ComputerActive in the UK:

“The European Commission wants member states to introduce online alternative dispute resolution (ADR) schemes consumers can use when in dispute with traders.

The Commission is concerned about an absence of ADR schemes in some market sectors. It also said the lack of information available to both traders and consumers about ADR schemes needed to be addressed.

John Dalli, EU Health and Consumer Commissioner, said: "All EU consumers should have at their disposal a simple, quick and inexpensive way to resolve their disputes with traders."

UNCITRAL was out front on this, but the Europeans are moving much faster.  I think something big is going to come out of Europe this year, while UNCITRAL will probably produce next year.