A relatively new type of litigation alternative called Crowdsourced Online Dispute Resolution (CODR) has the potential to offer an even faster and cheaper means of resolving disputes than traditional Alternative Dispute Resolution (ADR – which includes mediation and arbitration).
In June of 2006, Jeff Howe first coined the term “crowdsourcing”, when referring to tasks that were being performed by ‘crowd outsourcing’ that previously would have been outsourced to other companies. In essence, harnessing the power of group intelligence.
Crowdsourcing isn’t just a fad. Many large corporations have jumped into crowdsourcing head-first. Some of the best examples have been through social media channels where big brands like Domino’s Pizza, Coca Cola, Heineken and Sam Adams have crowdsourced a new pizza, song, bottle design and beer. GE has conducted multiple million dollar open innovation projects. Amazon built one of the largest crowdsourcing platforms called Mechanical Turk. General Motors, Procter & Gamble, and PepsiCo continue to execute crowdsourcing projects – not just one-off publicity stunts.
Crowdsourcing is still in the early adoption phase with smaller businesses and individuals. A very small percentage of people are familiar with everything crowdsourcing can do. Threadless.com is just one example: it selects the t-shirts it sells by having users provide designs and vote on the ones they like, which are then printed and available for purchase. These examples use a form of CODR called “crowdvoting”.
Crowdvoting takes advantage of what is known as the “wisdom of the crowd” which is based on the idea that under the right circumstances a group of people is often more intelligent than an individual. This idea of collective intelligence proves particularly effective on the web because people with very diverse backgrounds can contribute. There is a body of literature asserting that a diverse untrained crowd can outperform experts under certain conditions (Page 2007; Surowiecki 2004)
Financial journalist and staff writer of “The Financial Page” for the “New Yorker”, James Surowiecki explains how large groups of people are often smarter than an elite few in his book “The Wisdom of Crowds“. He says that four elements are required to form a wise crowd:
- Diversity of opinion – Each person should have private information even if it’s just an eccentric interpretation of the known facts.
- Independence – People’s opinions aren’t determined by the opinions of those around them.
- Decentralization – People are able to specialize and draw on local knowledge.
- Aggregation – Some mechanism exists for turning private judgments into a collective decision.
Based on Surowiecki’s book, Prof. Harri Oinas-Kukkonen – Professor of information systems at the Department of Information Processing Science, University of Oul in Finland – captures the wisdom of crowds approach with the following eight conjectures:
- It is possible to describe how people in a group think as a whole.
- In some cases, groups are remarkably intelligent and are often smarter than the smartest people in them.
- The three conditions for a group to be intelligent are diversity, independence, and decentralization.
- The best decisions are a product of disagreement and contest.
- Too much communication can make the group as a whole less intelligent.
- Information aggregation functionality is needed.
- The right information needs to be delivered to the right people in the right place, at the right time, and in the right way.
- There is no need to chase the expert.
CODR may be the beginning of a new era in affordable and effective dispute resolution. It could be an era in which dispute are solved by the collective intelligence of your ‘community’, whatever that community may be. Whether you are involved in a family or neighborhood dispute or a potential lawsuit involving many thousands of dollars, these processes should be considered. They are often more affordable and effective methods of dispute resolution and can result in a fair, just, reasonable solution for both you and the other party.
(Contributions to this post were made by Danel Dimov – PhD Student at Leiden University)
Other Resources of Note:
- Crowdsourcing: How the power of the crowd is driving the future of business. Jeff Howe. Random House, 2008.