ADR

Introduction

Alternative Dispute Resolution (ADR) mechanisms are a substitute to the formal procedures used by judicial courts. Over the years, ADR has developed in a variety of directions and has come to encompass a range of procedures other than court litigation, including negotiation, mediation, conciliation, expert determination, and arbitration. These types of procedure are becoming increasingly popular in various legal systems around the world, even expanding into areas such as intellectual property (IP) and new technologies. While ADR comes in many variations, the most widely used ADR mechanisms are arbitration, mediation, and expert determination. In all three cases, parties agree to resort to a neutral third party, in order to resolve their dispute. Nevertheless, a broad distinction can be drawn between arbitration, which results in a binding and final decision,[1] and mediation, where a neutral third party assists the disputing parties in reaching a settlement of their dispute.[2] Unlike an arbitrator, a mediator cannot impose a decision. The settlement agreement has, in general terms, the force of a contract, and the parties may still seek remedies before state courts or arbitral tribunals. In other words, mediation cannot guarantee a final decision. This can be viewed as a disadvantage compared to arbitration, where there is usually a final and binding outcome through an arbitral award.[3] Some forms of ADR combine both binding and non-binding components; for instance, so-called “med/arb” is a mixture of mediation and arbitration proceedings.[4] Lastly, expert determination is often used in matters of a technical nature. This procedure allows the disputing parties to submit a specific matter (e.g., a technical question) to one or more experts who will then decide on this matter. The expert determination will usually be binding unless the parties have agreed otherwise.[5]

Advantages

The inherent advantages of ADR present a strong argument in favor of their suitability for the resolution of esports disputes.[6] Traditional litigation processes are often ill-suited to handle the complexities and rapid pace of the esports ecosystem, making ADR an attractive option for resolving disputes in this field. Sitting at the intersection of digital and physical worlds, and balancing between organized competitions and leisure, the industry can become fertile ground for a variety of disputes to grow. This mix is the reason why traditional dispute resolution facilities may not be a good fit for the resolution of esports disputes. Parties may wish to opt for adjudicators or mediators with technical expertise and experience due to the complex nature of these issues. In such cases, ADR mechanisms could be a useful tool. Moreover, the global nature of esports competitions and the diverse parties involved often necessitate a streamlined and internationally recognized method of dispute resolution, further highlighting the potential benefits of ADR in this context.[7]

ADR and eSports

In the area of esports, there is an ever-growing interest by stakeholders to consider ADR to solve disputes that may arise.[8] In 2021, the WIPO Arbitration and Mediation Center (WIPO AMC) published the WIPO-MCST Survey Report on “Alternative Dispute Resolution Mechanisms for Business-to-Business Digital Copyright and Content-Related Disputes”.[9] The Survey Report draws on more than 1,000 responses from a wide range of stakeholders[10] in 129 jurisdictions of all regions and provides some insights into the qualitative and quantitative features of disputes in the video gaming industry, including esports. The WIPO Survey showed that 77 per cent of the respondents who had been involved in video games disputes, including esports disputes, indicated that when faced with a contractual digital copyright- and content-related dispute, resorted to court litigation in their home jurisdiction. The second most preferable dispute resolution mechanism was mediation and/or conciliation (47 per cent), followed by arbitration (37 per cent). These percentages reveal a preference in favor of ADR mechanisms and can be summarized as follows:

Table I: Dispute resolution mechanisms in contractual disputes

The results are shown as the constituent percentages of the total number of respondents, who were involved in video games and esports, as well as in other digital copyright and content-related disputes. Respondents could select multiple options.

When it comes to non-contractual disputes, the situation is not so different. The experiences of the survey respondents who had been involved in video games or esports disputes showed that the most frequent mechanism used for resolving non-contractual disputes was notice and takedown (77 per cent). The second most preferable dispute resolution mechanism was court litigation in their home jurisdiction (67 per cent), followed by mediation and/or conciliation (44 per cent), and arbitration (23 per cent). A close reading of this breakdown reveals that ADR mechanisms are once again a preferred method. An overview of the different types of dispute resolution mechanisms in non-contractual disputes and their percentage is shown in the below table:

Table II: Dispute resolution mechanisms in non-contractual disputes

The results are shown as the constituent percentages of the total number of respondents, who were involved in video games and esports, as well as in other digital copyright and content-related disputes. Respondents could select multiple options.

Conclusion

In conclusion, as the video games and esports market expands, and the amounts in dispute may increase, the adoption of ADR practices is likely to become even more prevalent, compensating for the shortcomings of judicial systems, while serving as a tool for maintaining fairness, integrity, and stability within the industry. Nevertheless, it should be noted that there are circumstances, in which court litigation might be preferable to ADR. For example, ADR’s consensual nature makes it less appropriate if one of the two parties is uncooperative. In addition, a court judgment will be preferable for strategic reasons and especially if a party seeks to establish legal precedent rather than an award that is limited to the relationship between the parties. All these elements play an important role when parties must choose the dispute resolution procedure that best fits their needs.

[1] WIPO, ‘What is Arbitration?’ <www.wipo.int/amc/en/arbitration/what-is-arb.html> accessed 20 March 2024

[2] WIPO, ‘What is Mediation?’ <www.wipo.int/amc/en/mediation/what-mediation.html> accessed 20 March 2024

[3] L Shmatenko and B Campara-Kopeinig, ‘«Ready? Fight!» – Player vs. Player im eSport’ (2023) Fokus Sport – Das Recht, 2

[4] WIPO, ‘Recommended WIPO Contract Clauses and Submission Agreements’ <www.wipo.int/amc/en/clauses/med_arb/> accessed 20 March 2024

[5] WIPO, ‘What is Expert Determination?’ <www.wipo.int/amc/en/expert-determination/what-is-exp.html> accessed 20 March 2024

[6] L Shmatenko, ‘eSports – ‘It’s in the Game’: The Naissance of a new Field of International Arbitration’, in C González-Bueno (ed.), 40 under 40 International Arbitration 2021, 393-410

[7] World Intellectual Property Organization (2021), ‘Alternative Dispute Resolution Mechanisms for Business-to-Business Digital Copyright and Content-Related Disputes’, available at www.wipo.int/publications/en/details.jsp?id=4558, p. 24.

[8] L Shmatenko, ‘eSports – ‘It’s in the Game’: The Naissance of a new Field of International Arbitration’, in C González-Bueno (ed.), 40 under 40 International Arbitration 2021, 393-410

[9] World Intellectual Property Organization (2021), ‘Alternative Dispute Resolution Mechanisms for Business-to-Business Digital Copyright and Content-Related Disputes’, available at www.wipo.int/publications/en/details.jsp?id=4558.

[10] The survey was addressed to a wide range of stakeholders, including copyright- and content-intensive companies of all sizes, online intermediaries and platforms, creators, entrepreneurs, collective management organizations, in-house and external counsel, copyright offices and other government bodies, judges, museums and international organizations.