The internet brought the once rarefied world of international commerce into our living rooms. While one can now order wine directly from a vineyard located in Tuscany, this convenience has led to a precipitous rise in international litigation. One of the primary risks in transacting business internationally is the uncertainty in dispute resolution. Both parties will claim that their law governs the dispute. Naturally, this almost always results in protracted litigation over jurisdictional issues. While there are many methods to avoid such a situation, a savvy international lawyer, will negotiate favorable terms into the governing contract. There are a number of approaches an attorney can consider to resolve problems across national frontiers.
Drafting the Contract
Preliminarily, an equitable dispute resolution begins with prevention. This entails drafting a solid and well thought out contract. I touched on this topic in earlier posts here and here. Before transacting with anyone online, it is essential that you are fully aware of their terms and conditions of service and ensure you clarify anything you’d like to see in the contract. If your proposals aren’t accepted, you’re far better to avoid transacting to avoid problems, particularly where substantial money is at stake.
Alternatively, if you are drafting an agreement from scratch it is imperative that you decide mutually on the terms, particularly what is known as the choice of law clause. Choice of law refers to a particular designation in the contractual terms which stipulates that in the event of a dispute, both parties submit to an exclusive jurisdiction. This is usually to the favour of the seller’s knowledge, although may even be a neutral jurisdiction to avoid perceived bias. Provided that the choice of law is stipulated in advance, it is a particularly effective way of ensuring disputes are properly resolved to the satisfaction of both parties.
Another highly effective way to tackle online litigation is to submit to the exclusive jurisdiction of some online adjudication service in the terms and conditions. This involves a third party, usually a totally independent party, which is designed to regulate and prevent bias or unfavorable outcomes. This eventually leads to a definite ruling one way or the other, which is helpful in ensuring that justice is done. Again, this is all down to the agreement and the way in which it is drafted. By good drafting, many of the problems of litigation can be weeded out before they arise, leading to a more fluid and resolved business relationship in general.
In addition to contractual disputes, much of international litigation is taking shape online, as more and more parties find problems in dealing with others in foreign jurisdictions. Primarily, the issues of copyright and theft of intellectual property becoming commonplace, as issues that strike to the very core of business online. Through establishing more regulatory online framework, it is possible, and indeed encouraged, for more efforts to be injected in regulating the way in which most of our business is conducted. In the coming years, there will likely be much development in Internet law, particularly of a trans-national ilk, which will have a natural knock on effect on offline litigation to the benefit of business and trade.
Online litigation has risen to the forefront of legal thinking in recent years with the rise of the Internet. As business becomes naturally more global, it is important to consider how disputes can be resolved, and indeed how this will pan out in the future. There are suggestions of further developments of voluntary online courts, which will hear cases and establish a code of ethics, and this can only be good news for those parties feeling aggrieved by the system. With each transaction, the Internet is becoming a more stable environment in which to conduct business, and a more regulated forum for marketing and commerce.
Trend to Watch: Look for an increase in litigation arising out of online transactions and a contemporaenous increase in alternative dispute resolution regimes such as online courts.