Digital Dispute Resolution

44 Pages Posted: 6 Jul 2021

See all articles by Gerhard Wagner

Gerhard Wagner

Humboldt University School of Law; University of Chicago Law School

Horst Eidenmueller

University of Oxford - Faculty of Law; European Corporate Governance Institute (ECGI)

Date Written: June 22, 2021

Abstract

This essay identifies and analyses key developments and regulatory challenges of “Digital Dispute Resolution”. We discuss digital enforcement and smart contracts, internal complaint handling mechanisms, external online dispute resolution and courts in a digital world. Dispute resolution innovations originate primarily in the private sector. New service providers have high-powered incentives and face fewer institutional restrictions than the courts. We demonstrate that with smart contracts, digital enforcement and internal complaint handling, a new era of dispute resolution by contract without a neutral third party dawns. This development takes the idea of a “privatization of dispute resolution” to its extreme. It promises huge efficiency gains for the disputing parties. At the same time, risks of an extremely unequal distribution of these gains, to the detriment of less vigilant parties, and of undermining the rule of law loom large. The key regulatory challenge will be to control the enormous power of large, sophisticated commercial actors, especially platforms. We suggest regulatory tools to address this problem.

Keywords: Digital Dispute Resolution, Artificial Intelligence, Blockchain, Smart Contracts, Digital Enforcement, Internal Complaint Handling, Online Dispute Resolution, Courts

JEL Classification: K4, K12, K2

Suggested Citation

Wagner, Gerhard and Eidenmueller, Horst G. M., Digital Dispute Resolution (June 22, 2021). Available at SSRN: https://ssrn.com/abstract=3871612 or http://dx.doi.org/10.2139/ssrn.3871612

Gerhard Wagner

Humboldt University School of Law ( email )

Unter den Linden 9
Berlin, 10099
Germany

University of Chicago Law School ( email )

1111 East 60th Street
Chicago, IL 60637
United States

Horst G. M. Eidenmueller (Contact Author)

University of Oxford - Faculty of Law ( email )

St Cross Building
St Cross Road
Oxford, OX1 3UL
United Kingdom

European Corporate Governance Institute (ECGI) ( email )

c/o the Royal Academies of Belgium
Rue Ducale 1 Hertogsstraat
1000 Brussels
Belgium

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