When negotiations break down over a contract, a sales transaction, or a business or personal relationship, both parties usually want to avoid going to court. The court process can be costly, it can be nerve-wracking, and it will expose the details of the dispute in public records. For these reasons, mediation or arbitration is often a more attractive alternative to filing a lawsuit. Mediation differs from arbitration in that is a non-binding agreement, whereas a decision from an arbitrator is final. Online mediation (also known as online dispute resolution) is becoming increasingly popular as a method of resolving problems between feuding parties.
There are numerous reasons parties might seek out online mediation over traditional mediation. The disputants may live many miles from one another or in different countries, making face-to-face mediation either cost-prohibitive or impossible. Possible issues about which court would have jurisdiction in a case might also be a factor. Scheduling or travel difficulties could prevent the parties from attending traditional mediation sessions. When tempers are hot and one or both parties are concerned about suffering violence or retaliation from the other side, use of an online mediation process may be a more civilized way to resolve the dispute through a neutral, unbiased third party.
Online mediation is often used to reach settlements in civil and domestic cases such as employment disputes, marital separations, and child custody matters. Feuds over property and land transactions, as well as landlord/tenant issues can often be resolved short of litigation through the mediation process. Contractual arguments — particularly those involving only two parties and amounts of money less than $5,000 to 10,000 US Dollars (USD) — are frequently mediated online instead of in small claims courts. Some online mediation services specialize in more complex legal problems, such as those involving large sums of money or multiple plaintiffs.
Buying and selling on the Internet is sometimes a risky proposition with few avenues for legal recourse when something goes wrong. For example, a person may purchase a product on an Internet auction site, send the money to a total stranger located across the country or on the other side of the world, only to find the product never arrives or is not as advertised. Sellers run the same risks doing business with unknown persons long-distance: non-paying customers and credit card chargebacks can have a tremendous negative impact on a small business' bottom line. As a result, a host of online mediation services have sprung up in recent years to assist e-commerce sellers and customers in resolving conflicts without getting a court involved.