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What You Should Know About Online Dispute Resolution
Online dispute resolution (ODR) has all of the advantages of other forms of ADR-and it is faster and more cost-effective.

LESS THAN 15 years ago the legal community struggled to implement alternative dispute resolution (ADR) into the case management programs of federal and state trial courts. This effort was largely motivated by overcrowded trial dockets which allowed cases to remain pending four and five years before a trial date. Now ADR is an accepted component of most case management programs of any trial court and reaches into almost every segment of our lives. Schools, prisons, communities, businesses, consumers, and families now have ready access to alternative dispute resolution training and specialists. Many state courts have established conflict resolutions programs such as the highly effective and award-winning Mediation and Conflict Resolution Office (MACRO) of the Maryland Judiciary. See http://www.courts.state.md.us/macro/.
ADR has been around in commerce since the 1920’s and the founding of the American Arbitration Association. Many date ADR to biblical times and King Solomon. Originally the focus was on providing commercial entities with alternatives to adjudicating their disputes in the court. During the next eight decades many barriers have been overcome; however, the paper- based alternatives of the past that paved the way for ADR have become expensive and time- consuming: in some cases it’s as if a new ADR bureaucracy has replaced the old judicial bureaucracy. Although face-to-face and paper-based alternative dispute resolution is not as time- consuming and expensive as litigation in the courtroom, the time and expense of paper and face-to-face meetings denies many parties the opportunity of a fair and neutral resolution of a genuine dispute.
The ability of technology-especially the Internet-to make many business processes more efficient is now making it clear that online dispute resolution (ODR) is the next frontier of ADR. The internet promises to make more disputes reachable by ADR and to facilitate the resolution of disputes faster and at a lower cost. But like many shifts from paper to technology, a clear strategic pathway has yet to appear.

WHAT IS ONLINE DISPUTE RESOLUTION ? • ODR provides the ability for two (or more) disparate parties to settle their dispute using the Internet. Sometimes this involves lawyers and mediators and sometimes it does not. It depends on the vehicle/provider that the parties agree to utilize to resolve their claim.

History Of Online Dispute Resolution
The concept of ODR has been discussed in academic circles since the mid 1990’s. See www.odr.info.Professor Ethan Katish was a leading researcher and developer of concepts of ODR. From 1997-1999, Professor Katish mediated a variety of disputes online, involving domain name/trademark issues, other intellectual property conflicts, disputes with Internet Service Providers, and others. In the spring of 1999, he supervised a project with the online auction site eBay, in which over 150 disputes were mediated during a two week period. During the summer of 1999, he co-founded Disputes.org, which later worked with eResolution to become one of four providers accredited by ICANN to resolve domain name disputes. He is also an adviser to SquareTrade.com, an Internet start-up focusing on online ADR. There are over 20 internet companies listed on the ODR.info site which provide ODR online services.
As a Judge of the Circuit Court for Prince Georges County, Maryland in conjunction with my activities directing the nation’s first electronic filing pilot project and managing the courts civil docket I realized that dispute resolution could be aided by the Internet. The ideas were first published in a series of on-line articles by VirtualCourthouse beginning in 1996. See http://www.montyahalt.com/vc.htm. VirtualCourthouse.com™ was founded in 2001.
The VirtualCourthouse dispute resolution process models a court dispute resolution process delivered on the Internet using Web-based technologies:
A case is initiated and a list of Neutrals is selected and the Neutrals are ranked;
A system generated email is sent to the other party, inviting them to join the case;
The other party joins the case and a Neutral is agreed upon;
The Neutral reviews the case initiation, and sends an email to both parties, confirming the type of proceeding and the fees;
The claimant prepares a case presentation and uploads the scanned documents into the online case;
Once complete, a system generated email is sent to the respondent, advising them the claimant has completed their presentation, and now it is time for them to submit their case presentation;
Once the case presentations are complete, a system generated email is sent to the Neutral advising them to review the evidence and render a decision;
Once reviewed, a verdict is submitted online, and a system generated email is sent to both parties notifying them a verdict has been rendered.

VirtualCourthouse creates a marketplace by recruiting the neutrals, administering the electronic case file, and providing access to the system to members of the plaintiff and defense bar, including insurance staff counsel, claims agents, and the parties. It also VirtualCourthouse provides an independent forum by enabling parties to select qualified neutrals (typically judges or attorneys with specific experience), submit digitized materials, schedule an ADR event and track other activities throughout the effort to resolve the claim. Critical to the design of this service is its neutrality: VirtualCourthouse impartially facilitates neutral selection by providing structured communication among parties via a controlled and secure message service. Any party can attach digital exhibits such as digital photographs or scanned images of medical records. The Neutral can use the message service to communicate with parties. VirtualCourthouse streamlines every step in the process and minimizes the need and costs of unnecessary face-to-face meetings, mailing, and copying.
The VirtualCourthouse Dispute Resolution Engine (DRE) is a combination of multimedia technologies and business processes, integrated with a customer-friendly user interface. The DRE replicates the current process of dispute resolution in an online environment, removing constraints of time, expense and distance. The engine is a sequence of events utilizing Internet-based media technologies that are designed to resolve conflicts between two or more parties. The DRE enables the resolution of disputes by functioning as a middleware to connect the disparate business processes of attorneys, claimants and neutrals. The DRE permits the exchange of data between these business processes which would otherwise lack the technology interfaces essential to working together electronically. The engine, centralized through VirtualCourthouse.com™, is the electronic “glue” that binds these users of otherwise unrelated systems into a virtual private data and business process network.
The Internet creates an online marketplace for dispute resolution by bringing together parties with disputes and neutrals seeking a storefront for their services. Registered users are able to visit the “virtual” court 24/7, review the docket and conduct any proceedings under way. Lawyers are able to check on the status of their cases, view documents and make filings at any time. Case administration for the parties and the neutral by a case administrator is minimized as case administration activities are automated through the virtual private data and business process network

How Can ODR Help ADR?
ODR promises to enable ADR to become more efficient, faster and less expensive. By achieving those three improvements ODR will make ADR a real alternative to a greater number of disputes thereby bringing all of the advantages of ADR to a greater number of people. An examination of the ADR process and barriers to ADR will allow a deeper examination of the potential of ODR. The ADR process usually unfolds this way:
One party decides to pursue ADR, an existing agreement requires it, or a court or other authority requires it;
A neutral is selected. (This can be by suggestion and negotiation of the parties, identification of the neutral in an exiting agreement, or appointment of the neutral by a court or other authority);
The parties provide the neutral with written documentation of their respective positions;
An ADR session is scheduled;
An ADR session is held and conducted; and
A decision or report is rendered by the neutral.

Each of these steps can be automated by technology and the Internet. The goal of ODR is to reduce the time and cost of each step thereby making it available to greater number of people.

Change, Not Technology
The adoption of technology by businesses and individuals over the last two decades is astounding. Just 10 years ago managers of the nation’s largest law firms were struggling to get their lawyers to put computers on their desks and then actually use them. One manager of a firm found a creative strategy. He announced at a firm meeting that he was conducting a pilot to determine how best to use a computer in the practice. He was going to conduct the pilot with the 10 brightest lawyers in the firm. Anyone who was interested was advised to call his office. One by one, every lawyer in the firm called, and as soon as they did, a computer showed up on each lawyer’s desk. Adoption of the computer in the everyday life of that firm was well underway.
Today only a few laggards in the legal profession fail to use a computer. Interestingly enough, the leaders are not always the younger generations as many senior lawyers lead the way. Take Judge Richard Rombro, a retired Judge in Maryland (having been forced to retire because the Constitution requires retirement at age 70). Judge Rombro managed the entire asbestos docket for the Circuit Court for Baltimore City using Lexis-Nexis File and Serve-sometimes even from his winter office in Florida. The legal profession has fully embraced technology including the Internet to help become better lawyers. Those who have not embraced technology are losing the competitive battle.
So why is it that disputes are still largely resolved with a dependency on paper and face-to-face meetings? It is all about change. Old ways are not put aside easily. Who hasn’t heard a lawyer say, “I know that is the way it will be done in the future, but I am not going to change now.”
Change requires strong and great leadership. And great leaders always have a vision, a strategy, and they are enthusiastic and work really hard. I learned these attributes of leadership from basketball great Jim Valvano. I was riding in my car to a Maryland basketball game against North Carolina State listening to Johnny Holiday’s pre-game radio show. Johnny was interviewing the State coach Jim Valvano. Valvano had just won a National Championship the year before. Shortly into the interview Johnny ask Coach Valvano what his secret to success was. Coach Valvano said rather nonchalantly and quickly, “Well Johnny you have to have a vision, then a strategy and you have to be enthusiastic, then you have to work like crazy to make sure that you accomplish the vision.” Coach Valvano said that his vision was to win the game on a shot at the buzzer. His strategy was to get to the last two minutes of the game no more than six points down. He was sure that his team could play strong enough defense in the final two minutes to make sure the other team did not score and he was sure his team could execute and score over that relatively short period of time. Sure enough over the years Coach Valvano executed his plan for success and he wound up being one of the most successful coaches. His life was cut short by a tragic and fatal fight with cancer, but the coach never gave up. His lesson and legacy will live on for years. Valvano’s formula for success has four parts: vision, strategy, enthusiasm, and work. In developing a strategy it is essential to identify the barriers. The following are but a few:
The neutral “needs to see the parties”;
Scanning and uploading documents;
“It’s easier to do it the old way:; and
“My computer is too slow.”

As VirtualCourthouse approaches the 1,000th case filing it has become obvious that ODR requires adoption by three separate constituencies-the claimant, the respondent and the neutral. Much like a stool, if one leg is absent the stool falls. Thus, the challenge of change is multiplied or as the mathematician might say-“cubed.”
Most all practitioners have successfully overcome the barriers to change which were presented with the advent of court ordered ADR in the 1990’s. The benefits have become obvious: time savings, cost savings and “resolution satisfaction.” Yet the court dockets keep growing so much more remains to be accomplished.
Students of the dynamics of change will testify that change does not occur unless there is leadership, strategy, and management. Over the past four years VirtualCourthouse has demonstrated that technology can elevate ADR to higher levels, but it requires the participation of all three legs of the stool: the claimant, respondent, and neutral. Leadership is key and the leaders in each constituency are stepping forward as the pioneer’s did and they are establishing new territory.
Eric Frye, a lawyer in Upper Marlboro, Maryland, continues to file his cases in VirtualCourthouse before he files in Court. Jeff Wigodsky with Karp Frosh, in Washington, D.C. has successfully adopted the same policy. Several insurance claims department have successfully integrated VirtualCourthouse into their claims examiner training process. The neutrals have had an easier time adopting as Judge Vincent Femia, Alan Feld and Cy Pickens will attest. The common denominator with all of these folks is their ability test the vision of VirtualCourthouse and overcome the reluctance to change.
Most people are risk-averse and they therefore resist change. “I have been doing just fine without all of this technology” is a familiar refrain. However, the evidence now is overwhelming that ODR will pay significant dividends to those willing to give it a try. The VirtualCourthouse team does a formal evaluation on every case filing and the results are truly exceptional. Over 90 percent of those responding are “very satisfied”-a “5” on a five-point scale-with VirtualCourthouse as a method of dispute resolution. About 90 percent are also “very satisfied” with the customer service. Now this does not mean that everyone is thrilled with the result, because as in all dispute resolution, expectations are not always achieved. And yes, there are occasional “technological” glitches and challenges. But that is where the ODR provider excels by its experience in overcoming these challenges. Even in the “paper world” not all is perfect and there are occasional problems and challenges to overcome. Who hasn’t had the experience of a paper file that has been lost or destroyed or a letter that was somehow lost in transit?

WHAT WORKS BEST IN ODR? • In developing a strategy to successfully implement an ODR project it is helpful to analyze what has been successful. What is becoming clear is that certain case criteria lend themselves to online activity, while other criteria lend themselves to the physical or “bricks-and-mortar” world.
Online activity works best when there are only two parties and when the substance of the dispute is only monetary. ODR also has been effective when the dispute arises out of Internet commerce. ODR is difficult when there are many parties, the substance of the dispute is emotional or there is a large amount of money in controversy.
Square Trade has handled thousands of disputes which have arisen between the buyer and seller of goods on eBay. Using this online solution a neutral mediates the dispute in an online chat format. While Square Trade no longer offers ODR for eBay it demonstrated that ODR is a viable and effective alternative.
Cybersettle has successfully settled thousands of disputes, mainly involving personal-injury claims. Using the Cybersettle online process, the parties submit blind monetary demands and offers and agree that if they are within certain limits the case is settled at the midpoint of the last demand and offer.
The American Arbitration Association has settled several thousand cases digitally, but it still remains a very small percentage of the AAA caseload.
VirtualCourthouse.com™ has successfully settled hundreds of personal-injury, real estate, construction and contract claims through an online binding arbitration process. The parties select a neutral though an online negotiation. Once the neutral is selected each party presents their case online – uploading supporting medical bills, doctor reports, pictures and other relevant evidence. The neutral then reviews the presentations and renders a binding decision.
Neutral-Focused ODR Providers
Services like VirtualCourthouse.com specialize in providing neutrals a market place in addition to taking the parties through the entire ODR process. VirtualCourthouse.com comes closer to mimicking the actual court process than most of the services outlined above. VirtualCourthouse allow exhibits and supporting materials to be submitted electronically and case information is shared among the parties and the assigned neutral in a secure environment. The lowest cost for a simple case brought to VirtualCourthouse.com is less than $400.When shared by the parties that results in a dispute resolved for $200 a major cost saving to either ADR or court.
Mediate.com is a site that helps one locate a mediator in a particular geographical area and practice type. Unlike the VirtualCourthouse.com outlined above, Mediate.com does not offer a Web interface to enable one’s case to be submitted and adjudicated online.

Paper-Based Organizations In Transition
The American Arbitration Association offers a lot of information on their Website, including PDF forms. You have the ability to file your case electronically through AAA Webfile. The AAA offers both mediation and arbitration services and is the oldest ADR organization outside of the courts in the U.S.
JAMS, founded by Hon. H. Warren Knight in 1979, provide mediation and arbitration services across the country. They specialize in a variety of claims including bankruptcy, mass tort and international. The JAMS Website allows the visitor to file an initial claim and select a location and neutral. But beyond that, JAMS does not offer the automated case monitoring that the other services outlined above do.

Regional ADR Service Providers
There are several regional ADR providers, like ADR Systems of America, LLC, headquartered in Chicago. ADR Systems has many retired Cook County Circuit Court judges on their roster of neutrals and specialize in complex personal injury cases. The ADR Systems’ Web interface is limited but they focus on being a regional provider and therefore the need for automation is not quite as great as in a case involving geographically diverse parties.
Other ODR Providers
The ElectronicCourthouse.com, run by a Canadian company called iVentures, provides services to companies that must offer dispute resolution. They specialize in companies that manufacture and distribute internationally.

Developing A Successful Strategy
Transferring an existing process from the bricks-and-mortar world to the Internet is a daunting undertaking. The process is fraught with barriers of change involving multiple parties and multiple processes. Developing a strategic approach is therefore essential. It is similar to “eating an elephant”: You do not want to plan this event for one meal or you will surely fail. You need to start small but you need to start. It is necessary to strategically identify a starting point where the existing barriers are not overwhelming and where efficiencies of online business will bring the greatest bottom line result.

CONCLUSION • The last 50 years have seen enormous growth in the use of ADR. The growth has been championed and led by the judges and the lawyers of the many state courts. Judges have led the way by incorporating ADR in case-flow management, adopting standards and criteria for the certification of neutrals. Lawyers have led the way by forming professional organizations and adopting ethical standards. ODR promises to take ADR to the next level: meeting the dispute resolution needs of a greater number of people in a way that is both faster and less expensive. By using a technologically sophisticated process over which they have substantial control, litigants will have greater confidence in the legal community and experience a higher level of justice.

PRACTICE CHECKLIST FOR
What You Should Know About Online Dispute Resolution
The ability of technology-especially the Internet-to make many business processes more efficient is now making it clear that online dispute resolution (ODR) is the next frontier of ADR.

The VirtualCourthouse dispute resolution process models a court dispute resolution process delivered on the Internet using Web-based technologies:
__ A case is initiated and a list of Neutrals is selected and the Neutrals are ranked;
__ A system generated email is sent to the other party, inviting them to join the case;
__ The other party joins the case and a Neutral is agreed upon;
__ The Neutral reviews the case initiation, and sends an email to both parties, confirming the type of proceeding and the fees;
__ The claimant prepares a case presentation and uploads the scanned documents into the online case;
__ Once complete, a system generated email is sent to the respondent, advising them the claimant has completed their presentation, and now it is time for them to submit their case presentation;
__ Once the case presentations are complete, a system generated email is sent to the Neutral advising them to review the evidence and render a decision;
__ Once reviewed, a verdict is submitted online, and a system generated email is sent to both parties notifying them a verdict has been rendered.

The VirtualCourthouse Dispute Resolution Engine (DRE) is a combination of multimedia technologies and business processes, integrated with a customer-friendly user interface. The DRE replicates the current process of dispute resolution in an online environment, removing constraints of time, expense, and distance. The engine is a sequence of events utilizing Internet-based media technologies that are designed to resolve conflicts between two or more parties.

ODR works best when there are only two parties and when the substance of the dispute is only monetary. ODR also has been effective when the dispute arises out of Internet commerce. ODR is difficult when there are many parties, the substance of the dispute is emotional or there is a large amount of money in controversy. Providers include:
__ Square Trade;
__ Cybersettle;
__ The American Arbitration Association;
__ VirtualCourthouse.com™ (which comes closest to mimicking the actual court process);
__ Mediate.com;
__ JAMS;
__ ADR Systems of America, LLC;
__ The ElectronicCourthouse.com, run by a Canadian company called iVentures.

The ability of technology-especially the Internet-to make many business processes more efficient is now making it clear that online dispute resolution (ODR) is the next frontier of ADR. The internet promises to make more disputes reachable by ADR and to facilitate the resolution of disputes faster and at a lower cost. But like many shifts from paper to technology, a clear strategic pathway has yet to appear.

by Judge Arthur M. Monty Ahalt ( Ret.) – April 1, 2009

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Digital Footprint – What’s That ?
Who Controls Your Digital Footprint ?
Ten years ago, a large percentage of the legal profession-lawyers, judges, administrators and marketing experts were consumed by the privacy debates. The fear, in some cases paranoia, was that “bad people” would misuse personal data. Even public data in public files at the courthouse were thought to be protected in some sort of cloak of confidentiality. After all, real estate marketers were doing “bad things” with online court data; they were obtaining foreclosure records and marketing their services to the distressed homeowner, many of who were no doubt embarrassed by their financial plight. Never mind that those “bad things” were happening in newspaper ads and handmade signs on the community telephone poles.

Consider what has occurred over the past ten years; the amount of information about an individual which is accessible on the internet, without the specific permission of that individual, is astounding. Try googling your own name and see how much information you find about yourself; you will be shocked!

This is your “digital footprint”; information about an individual, law firm or business which resides on the World Wide Web. This information can be used to your benefit, or it can be used in an unfavorable manner. It is collected from content on a website, and it is collected from your browsing history. Think of the various search engines you visited just today; Google, Yahoo, Bing. Check it for yourself and see how much information is revealed in a single month of history.

One company Executive put it this way; “They leave a data footprint. They tell me what they are interested in. They tell me what kinds of things they are searching on. They tell me what kinds of article they are reading. They tell me whether a user is interested in preparing for the tax season next year. They tell me…….” – the list goes on and on. Put several years together and it is possible to paint a very relevant picture.

How to monitor your digital footprint.
Monitoring your digital footprint is really very easy.
1. Perform a google search of your name, your law firm or your business.
2. Schedule a monthly or quarterly google search.
3. Create a google alert on your name, your law firm or your business.

How to manage your digital footprint.
There are three principles to managing your digital footprint: content, content, content. The best and surest way to manage a digital footprint is to create content on the world wide web. Rather than allowing others to create this content, take a proactive approach.

1. Create and manage a personal website.
2. Create a professional profile on a professional networking site such as Linkedin or Plaxo.
3. Create a business/profession page on Facebook, Linkedin, Avvo, and Lawyers.com.
4. Publish articles in your area of expertise for other professionals and the general public.

The more information that you put on the web about yourself, your practice and your law firm, the more the web will reflect what you say, not what others say for you.

Rules of Professional Conduct and Ethical Consideration

What about the Rules of Professional Conduct and Ethics? Currently, the discussion traffic about ethics is heavy and the speed of response is “warped speed”. Blogs and Twitters on the subject abound. One side says you cannot do much; the State Bar Counsel and Ethics Panel says you are ethically responsible for what others might be saying about you on sites like Avvo, Linkedin. The other side says all options are open. As usual, the truth and practice will lie somewhere in the middle – although the “middle” is still being defined.

When dealing with technology and the Internet, the tendency is to forget the occurrences and problems in the regular non-technology universe. For instance, social networking for a legal professional is as old as the profession. Lawyers are social by nature; they have neighbors, join country clubs, belong to churches, service organizations, community associations. Their friends and families are interconnected often by several generations. They call each other, meet with each other, and talk over the back fence or on the front porch. All of these activities must comport with ethical standards, yet are impossible to track or trace.

So what is different about this new and evolving technological Internet world? How is Facebook different from the community bulletin board and the local telephone tree? How is Linkedin different than the Rotary Club, Kiwanis or Lions Club? How is Avvo different than the yellow pages? A close look will lead to the conclusion of – not much. Yes, the speed and distance by which information and connections travel is multiplied and sometimes cubed. But at the same time, the tracks are easier to find and follow.

For the legal professional, the pathway seems pretty clear – get involved, use these new tools, learn about them, experiment with them, find out their strengths and weaknesses. While conducting activities, continue to guide them by basic ethics.

1. Don’t give legal advice.
2. Don’t solicit work.
3. Don’t let people think you are representing them and creating a lawyer client relationship.
4. Make sure your words are not misleading.
5. Make sure you protect client confidences.
6. Watch out for conflicts of interest situations.

We should adapt our technology and internet use to the ethical standards that have always guided our conduct. We should not create a new set of rules in reaction to new technology

by Judge Arthur M. Monty Ahalt ( Ret.) – February 17, 2010

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On Line Dispute Resolution – Where We Have Been and Where We Are Going
Online Dispute Resolution (ODR) is Still Alternative Dispute Resolution (ADR)

On Line Dispute Resolution
Where We Have Been and Where We Are Going
By
Judge Arthur M Monty Ahalt (ret.)
David Glynn

Online Dispute Resolution (ODR) is Still Alternative Dispute Resolution (ADR)
Less than 15 years ago the legal community struggled to implement alternative dispute resolution (ADR) into the case management programs of federal and state trial courts. This effort was largely motivated by overcrowded trial dockets which allowed cases to remain pending 4 and 5 years before a trial date. Now ADR is an accepted component of most case management programs of any trial court and reaches into almost every segment of our lives. Schools, prisons, communities, businesses, consumers and families now have ready access to alternative dispute resolution training and specialists. Many state courts have established conflict resolutions programs such as the highly effective and award winning Mediation and Conflict Resolution Office (MACRO) of the Maryland Judiciary.

ADR has been around since the 1920’s and the founding of the American Arbitration Association. Originally the focus was on providing commercial entities with alternatives to adjudicating their disputes in the court. During the next eight decades many barriers have been overcome, however, the paper based alternatives of the past which paved the way have become expensive and time consuming – in some cases it’s as if a new bureaucracy has replaced the old judicial bureaucracy. While face to face and paper based alternative dispute resolution is not as time consuming and expensive as litigation in the courtroom, the time and expense of paper and face to face meetings denies many parties the opportunity of a fair and neutral resolution of a genuine dispute.

The ability of technology- especially the internet – to make many business processes more efficient is now making it clear that online dispute resolution is the next frontier of alternative dispute resolution. The internet promises to make more disputes reachable by ADR and to facilitate the resolution of disputes faster and at a lower cost. But like many shifts from paper to technology, a clear strategic pathway has yet to appear.

What is Online Dispute Resolution

Online Dispute Resolution provides the ability for two (or more) disparate parties to settle their dispute using the Internet. Sometimes this involves lawyers and mediators and sometimes it does not. It depends on the vehicle/provider that the parties agree to utilize to dispute their claim.

Traditional cases can be settled using the Internet, but the most common use these days involves disputes that have come out of the business of the Internet, e.g., Square Trade, used by eBay to mediate eBay trading disputes online and ICANN, the internet domain registration coordinator, vehicle for settling disputes over rights to domain names.

Outside of the embedded ODR vehicles that eBay and ICANN provide, there are several different models of dispute resolution provided by public and private entities. Some simply assist with negotiation and some completely automate negotiation where an arbitrator or mediator is not required. When arbitrators and mediators are involved, the systems are more sophisticated and many times representation will also take place either before the process starts or during the preliminary stages of the process.

Some ODR systems provide weight balancing mechanisms on terms. This will assist parties with analyzing the disparity between the parties and offer hints as to how the parties can attempt to meet half-way. Sometimes when one sees a more scientific presentation of the facts, it may make it easier to come to terms. This indeed may be one of the strengths of ODR over traditional ADR and will play out as a future feature of ODR systems.

Calculating the BATNA (Best Alternative to a Negotiated Agreement) for a party after they submit their claim may help to overcome the strongest psychological barrier that drives the party to dispute resolution in the first place. According to de Vries, Berend R., Ronald E. Leenes & John Zeleznikow of Tilburg University in the Netherlands, in their article entitled, “Fundamentals of Providing Negotiation Advice Online: the Need for Developing BATNAs” iv, most parties have an unrealistic view of the potential outcome of their case. Weight balancing of negotiation points could play a key role in the future of ODR.

It is All about Change Not Technology – Overcoming Barriers

The adoption of technology by businesses and individuals over the last two decades is astounding. Just 10 years ago managers of the nation’s largest law firms were struggling to get their lawyers to put a PC on their desk and then actually use it. One manager of a firm found a creative strategy. He announced at a firm meeting that he was conducting a pilot to determine how best to use a PC in the practice. He was going to conduct the pilot with the 10 brightest lawyers in the firm. Anyone who was interested was advised to call his office. One by one every lawyer in the firm called, and as soon as they did, a PC showed up on their desk. Adoption of the computer in the everyday life of that firm was well underway.

Today only a few laggards in the legal profession fail to make use of the PC. Interestingly enough the leaders are not always the younger generations as many senior lawyers lead the way. Take Judge Richard Rombro, a retired Judge in Maryland (having been forced to retire because the Constitution requires retirement at age 70). Judge Rombro managed the entire asbestos docket for the Circuit Court for Baltimore City using Lexis-Nexis File and Serve – sometimes even from his winter office in Florida. The legal profession has fully embraced technology including the Internet to help become better lawyers. Those who have not embraced technology are losing the competitive battle.

So why is it that disputes are still largely resolved with a dependency on paper and face-to-face meetings. It is all about change. Old ways are not put aside easily. Who hasn’t heard a lawyer say – “I know that is the way it will be done in the future, but I am not going to change now.”

Change requires strong and great leadership. And great leaders always have a vision, a strategy, and they are enthusiastic and work really hard. Judge Ahalt learned these attributes of leadership from basketball great Jim Valvano. He was riding in his car to a Maryland basketball game against North Carolina State listening to the Johnny Holiday’s pre-game radio show. Johnny was interviewing the State coach Jim Valvano. Valvano had just won a National Championship the year before. Shortly into the interview Johnny ask Coach Valvano what his secret to success was. Coach Valvano said rather nonchalantly and quickly–“Well Johnny you have to have a vision, then a strategy and you have to be enthusiastic then you have to work like crazy to make sure that you accomplish the vision.” Coach Valvano said that his vision was to win the game on a shot at the buzzer. His strategy was to get to the last two minutes of the game no more than 6 points down. He was sure that his team could play strong enough defense in the final two minutes to make sure the other team did not score and he was sure his team could execute and score over that relatively short period of time. Sure enough over the years Coach Valvano executed his plan for success and he wound up being one of the most successful coaches. His life was cut short by a tragic and fatal fight with cancer–but the coach never gave up. His lesson and legacy will live on for years.

Valvano’s formula for success then is:
1. Vision
2. Strategy
3. Enthusiasm
4. Work

In developing a strategy it is essential to identify the barriers. The following are but a few:
1. The neutral needs to see the parties
2. Scanning and uploading documents
3. It is easier to do it the old way

As VirtualCourthouse approaches the 1,000th case filing it has become obvious that Online Dispute Resolution (ODR) requires adoption by three separate constituencies – the claimant, the respondent and the neutral. Much like a stool, if one leg is absent the stool falls. Thus, the challenge of change is multiplied or as the mathematician might say – “cubed”.

Most all practitioners have successfully overcome the barriers to change which were presented with the advent of court ordered ADR in the 1990’s. The benefits have become obvious – time savings, cost savings and “resolution satisfaction”. Yet the court dockets keep growing so much more remains to be accomplished.

Students of the dynamics of CHANGE will testify that change does not occur unless there is;
1. Leadership
2. Strategy
3. Management

Over the past three years VirtualCourthouse has demonstrated that technology can elevate alternative dispute resolution to higher levels – but it requires the participation of all three legs of the stool. Leadership is key and the leaders in each constituency are stepping forward as the pioneer’s did and they are establishing new territory.

Eric Frye, a lawyer in Upper Marlboro, Maryland, continues to file his cases in VirtualCourthouse before he files in Court. Jeff Wigodsky with Karp Frosh, in Washington, D.C. has successfully adopted the same policy. Several insurance claims department have successfully integrated VirtualCourthouse into their claims examiner training process. The neutrals have had an easier time adopting as Judge Vincent Femia, Alan Feld and Cy Pickens will attest. The common denominator with all of these folks is there ability test the vision of VirtualCourthouse and overcome the reluctance to change.

Most people are risk-averse and they therefore resist change. “I have been doing just fine without all of this technology” is a familiar refrain. However, the evidence now is overwhelming that ODR will pay significant dividends to those willing to give it a try. The VirtualCourthouse team does a formal evaluation on every case filing and the results are truly exceptional. Over 90% of those responding are “very satisfied” – a 5 on a 5-point scale – with VirtualCourthouse as a method of dispute resolution. 90% are also “very satisfied” with the customer service. Now this does not mean that everyone is thrilled with the result, because as in all dispute resolution, everyone’s expectations are not achieved. And yes, there are occasional “technological” clichés and challenges. But that is where the ODR provider excels by its experience in overcoming these challenges. Even in the “paper world” not all is perfect and there are occasional problems and challenges to overcome.

Technologies used in ODR

Embedded Technologies

All of the technologies used in ODR stem from the Internet. The parties will initiate the ODR process on a Website and tools are provided on the Website as the negotiation moves forward. The majority of ODR proceedings take place utilizing the Web browser exclusively and plug-ins will be provided by the ODR provider in the form of communications, i.e., chat, messaging (emails), conferencing (both telephone and video) and processing.

If it’s the case of blind negotiations, i.e., an offer is made and accepted or rejected, minimal tools will be needed. As the issue or case escalates, and/or other participants get involved, there may be a wider use of technology. Email and/or instant messaging may be required, a teleconference, or in the case of face-to-face contact, video-conferencing will be utilized. Most of these services should be self-contained within the provider’s package.

Throughout the process, automated steps will be followed that will be driven by the ODR provider’s Web program. This may include calendaring, case management, automatic payment processing and other programs typically associated with court and case management.

Use of Technology Outside of the ODR Website

In some cases, depending on the provider, going outside the Website might be required. That may involve using business or personal email, instant messaging software and/or WebEx, NetMeeting or Live Meeting for video-conferencing and traditional use of teleconferencing services. The conferencing services may make use VOIP vs. traditional land telephone lines.

What works Best in ODR
In developing a strategy to successfully implement an ODR project it is helpful to analyze what has been successful.

What is becoming clear is that certain case criteria lend themselves to online activity, while other criteria lend themselves to the physical world. Online activity works best when there are only two parties and where the substance of the dispute is only monetary. ODR also has been effective where the dispute arises out of Internet commerce. ODR is difficult when there are many parties, the substance of the dispute is emotional or there is a large amount of money in controversy.

Square Trade has handled thousands of disputes which have arisen between the buyer and seller of goods on eBay. Using this online solution a neutral mediates the dispute in an online chat format.

Cybersettle has successfully settled thousands of disputes, mainly involving personal-injury claims. Using the Cybersettle online process, the parties submit blind monetary demands and offers and agree that if they are within certain limits the case is settled at the midpoint of the last demand and offer.

The American Arbitration Association has settled several thousand cases digitally, but it still remains a very small percentage of the AAA caseload.

VirtualCourthouse.com™ has successfully settled hundreds of personal-injury claims through an online binding arbitration process. The parties select a neutral though an online negotiation. Once the neutral is selected each party presents their case online – uploading supporting medical bills, doctor reports, pictures and other relevant evidence. The neutral then reviews the presentations and renders a binding decision.

Current ODR Providers

Business-to-Business/Online Enterprise ODR Models

One of the most well-known ODR providers is Square Trade. They are responsible for handling eBay disputes. A fairly simple process is followed to present the case and the parties have the ability to bring in an arbitrator if necessary to settle the case. An example of the steps followed is illustrated below on the SquareTrade.com Website:

Square Trade Process – Figure 1

ICANN (Internet Corporation for Assigned Names and Numbers) recommends several ODR providers to assist in disputes over Internet domain names. One of those providers is the WIPO (World Intellectual Property Organization) and another is the National Arbitration Forum. Each recommended organization follows the rules and guidelines set by ICANN although they may supplement those rules with their own to best facilitate the process.

Below are the steps involved in the National Arbitration Forum’s dispute process:
Domain Name Disputes Process

A party files a domain name Complaint with the FORUM in accordance with the appropriate policy and Supplemental Rule set. This party is known as the Complainant. A copy is sent or transmitted to the Respondent and the disputed domain name’s registrar.

Once the case is filed, the FORUM reviews the Complaint for administrative compliance. The Complainant has 5 days to bring the Complaint into compliance with the rules or the Complaint will be dismissed.

Once the Complaint has been processed and accepted by the FORUM, the case is commenced. In most cases the Respondent has 20 days to file a response with the FORUM in accordance with the appropriate policy and Supplemental Rule set.

The Respondent files a written response with the FORUM. If the Respondent does not provide a written response, the deciding panel will only consider the Complainant’s submissions.

Each party may submit one additional submission following the FORUM’s acceptance of the Response; refer to the Supplemental Rules for instructions, restrictions and fees.

The FORUM assigns a panel (or arbitrator[s]) to hear the case.

The panel reviews the Complaint and the Response, and has the discretion to review any additional submissions from the parties.

The panel issues a decision. The decision is published by the FORUM and communicated to the parties, the registrar, and the appropriate Internet body (such as ICANN or NeuStar).

CyberSettle holds patents for several automated dispute resolution processes including the “double-blind bid” automated process. CyberSettle was begun in 1996 by two lawyers and has since grown into a company that claims to have handled enough cases to exceed $1 billion in settlements. Their clients are insurance companies, municipalities (New York City is listed among their clients) and other entities that would benefit from ODR. CyberSettle is a private company that also has a spin-off called Debt Resolve, Inc. that focuses on debt collection disputes.

Neutral-Focused ODR Providers

Services like VirtualCourthouse.com specialize in providing neutrals in addition to taking the parties through the entire ODR process. VirtualCourthouse.com comes closer to mimicking the actual court process than most of the services outlined above. They allow exhibits and supporting materials to be submitted electronically and case information is shared among the parties and the assigned neutral in a secure environment. The lowest cost for a simple case brought to VirtualCourthouse.com would be less than $400.

Mediate.com is a site that helps one locate a mediator in a particular geographical area and practice type. Unlike the VirtualCourthouse.com outlined above, Mediate.com does not offer a Web interface to enable one’s case to be submitted and adjudicated online.

Paper Based Organizations in Transition

The American Arbitration Association offers a lot of information on their Website, including PDF forms. You have the ability to file your case electronically through AAA Webfile. The AAA offers both mediation and arbitration services and is the oldest ADR organization outside of the courts in the U.S.

JAMS, founded by Hon. H. Warren Knight in 1979, provide mediation and arbitration services across the country. They specialize in a variety of claims including bankruptcy, mass tort and international. The JAMS Website allows the visitor to file an initial claim and select a location and neutral. But beyond that, JAMS does not offer the automated case monitoring that the other services outlined above do.

Regional ADR Service Providers

There are several regional ADR providers, like ADR Systems of America, LLC, headquartered in Chicago. ADR Systems has many retired Cook County Circuit Court judges on their roster of neutrals and specialize in complex personal-injury cases. The ADR Systems’ Web interface is limited but they focus on being a regional provider and therefore the need for automation is not quite as great as in a case involving geographically diverse parties.

Other ODR Providers

The ElectronicCourthouse.com, run by a Canadian company called iVentures, provides services to companies that must offer dispute-resolution. They specialize in companies that manufacture and distribute internationally.

Developing a Successful Strategy

Transferring an existing process from the bricks-and-mortar world to the Internet is a daunting undertaking. The process is fraught with barriers of change involving multiple parties and multiple processes. Developing a strategic approach is therefore essential. It is similar to “eating and elephant” – you do not want to plan this event for one meal or you will surely fail. You need to start small but you need to start. It is necessary to strategically identify a starting point where the existing barriers are not overwhelming and where efficiencies of online business will bring the greatest bottom line result. To commence your ODR learning you need to register as a neutral or initiate a claim online.

Register as a Neutral

Currently only three providers allow for online registration. SquareTrade.com, Mediate.com and VirtualCourthouse.com.

To register with Square Trade go to – http://stn.squaretrade.com/

Mediate.com charges a membership fee.
Mediate.com Membership includes:
• Locate A Mediator Directory Listing at Mediate.com
• Optional Participation in Mediate.com’s Qualifications Disclosure Program
• Eligibility for Professional Liability Insurance
• All MediateInside content, including News, Jobs, Archives, Video and more
• The Bi-Weekly Mediate.com Newsletter
Mediate.com Membership is only $17.95/month or $179.95/year!
Apply for membership by going to –www.mediate.com/membership/
VirtualCourthouse.com does not charge for membership or for listing. To register as a neutral with VirtualCourthouse.com go to – www.virtualcourthouse.com/system/neutral_register/neutral_register.asp
Initiate an Online Claim
To start a claim with Cybersettle you must first register –www.cybersettle.com/user/usersignupstart.aspx
A fee is charged only if a settlement results and will range from $100 to $700 depending on the amount of the settlement.
To initiate an ODR activity with VirtualCourthouse.com – go to –
www.virtualcourthouse.com/system/start_case/start_case.asp. There is no fee to initiate an ODR activity and an online arbitration fee is $200 per party.
Conclusion
A few years ago eFiling in the courts was considered far off and challenging, now it’s a reality in most federal courts and many state courts. ODR may appear to be as far-off as eFiling did, and similarly will be an accepted norm for cases appropriate for the ADR process in the near future. So take some steps in preparation of ODR.

Less than 15 years ago the legal community struggled to implement alternative dispute resolution (ADR) into the case management programs of federal and state trial courts. This effort was largely motivated by overcrowded trial dockets which allowed cases to remain pending 4 and 5 years before a trial date. Now ADR is an accepted component of most case management programs of any trial court and reaches into almost every segment of our lives. Schools, prisons, communities, businesses, consumers and families now have ready access to alternative dispute resolution training and specialists. Many state courts have established conflict resolutions programs such as the highly effective and award winning Mediation and Conflict Resolution Office (MACRO) of the Maryland Judiciary.

by Judge Arthur M. Monty Ahalt ( Ret.) and David Glynn – March 13,2008

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E-Lawyering: The Need, The Promise, The Challenge
This paper was presented at the 2008 ABA TechShow
The Need
What is eLawyering ?
eLawyering is a term used to refer to the practice of law over the Internet. It is more than Internet based advertising. eLawyering iniatives undertaken by the organized bar are usually focused on reaching a “latent market” of lower and middle class citizens in need of legal services.

Cost of legal services does not equal value of the service
The cost of litigation has exploded in the last ten years. Much of the cost of litigation is the product of inefficient and antiquated business processes. A major contributing factor to the cost is litigation’s dependence on paper. The dependence on paper starts with the litigants is perpetuated by their lawyers and is required by the courts.

The paper volume in just one court, the Circuit Court for Prince George’s County, Maryland, is an excellent example of this over-dependence on paper. There are 23 judges in this Circuit Court. In 1994, there were 42,700 cases filed, representing 1.7 million pieces of paper.

One of the great anomalies the advent of the personal computer has brought to the legal community is the creation of more paper without a change in the business processes which create the paper. The costs and inefficiencies of the overwhelming paper volume is requiring decision makers to examine the alternatives offered by the electronic world. Other businesses and institutions have successfully addressed their paper problems with electronic solutions, why can’t the litigation world and the legal profession?

Richard Susskind goes so far as to predict radical changes in the way lawyers will work. “The market will determine that the legal world is over-resourced, it will increasingly drive out inefficiencies and unnecessary friction and, in so doing, we will indeed witness the end of outdated legal practice and the end of outdated lawyers.” Professor Susskind contends that the delivery of legal services will follow other industries that have been radically reformed by the Internet. The weakness in this argument is that no authority can compel it and the legal services market is not efficient. This is evident when well thought out delivery models such as Legal Advice Line are met with considerable resistance from the bar, the courts and consumers.

The explosion of litigation over the last decade cannot be blamed on the legal profession and over-zealous lawyers as some would claim. The causes are much deeper and more reflective of the moral and cultural environment of the entire country. Part of the problem can be traced to the increasing diversity and separation of the country’s communities. As the notion of community has disappeared from major population centers people have resorted to the courts to resolve their differences rather than traditional community structures of family, church, and school. Part of this dynamic may also be attributed to a growing desire for privacy and anonymity in major urban population centers.

One needs to look no farther than pro se litigation to discover that the legal profession is not the cause of the communities’ run to the courthouse to solve almost every problem.

Linda Morris, Administrator for the Prince Georges County, Maryland, Family Court, put it best when she said, “Large numbers of Americans are choosing to represent themselves even when they can afford an attorney. They choose to be ‘lawyer less’ (pro se or pro per).” As Ms. Morris points out, “Income-qualified pro se litigants can get pro bono or some form of legal assistance from an attorney.” However, those who can afford legal services but choose not to hire a traditional lawyer because of cost have no where to turn when they need legal advice. Court administrators and clerks are prohibited from giving advice as they must remain impartial and are not authorized to practice law. This phenomenon of “I can do it myself” makes current pro se litigant procedures inadequate for the numbers and types of customers choosing to self-represent.

But this phenomenon is not limited to the pro se population as many consumer conscious groups have pointed out. Institutional litigators such as insurance companies and large corporations also regularly challenge the legal community to reduce the cost of legal services. They also require law firms to adopt integrated technologies the make the transfer of necessary information more efficient, less repetitive and less expensive.

The Promise
eCommerce
What is e-commerce? How will it impact dispute resolution and the business of dispute resolution? According to MIT professors Chris Westland and Ted Clark, “Electronic commerce, or e-commerce, is the automation of commercial transactions using computer and communication technologies.” E-commerce is in essence the computerization of markets whereby buyers and sellers are matched, a price determined and payment and delivery arranged. E-commerce is providing increasing opportunities because: (i) technology is user friendly; (ii) networks exist in stable forms; and (iii) business is reorganizing and re-engineering production and managerial processes.

What are the implications of the dynamics of e-commerce on the dispute resolution process? On the courts? The implications will manifest themselves on the substance and the process of litigation. The substance of litigation is the subject matter of the dispute. The process of litigation is the manner and method of filing and pursuing a claim in court.

Over the past decade we have witnessed an unrelenting marching evolution from purchasing EDI, to ATM dispensed cash, to pay at the pump ATM gasoline stations, to point of sale cash register computers, to Internet renewal of drivers’ licenses, to the purchase of books on the Internet. Simultaneously, it is becoming clear that the world is becoming borderless in the sense that time and space are no longer significant barriers to a business transaction.

So how do the courts and law firms fit into this electronic commerce picture? According to MIT e-commerce professors Westland and Clark in their textbook Global Electronic Commerce, there are three major types of electronic commerce: Business to Consumer, Business to Business, and Closed Group Networks. Industrial age goods and services are made available to the consumer through marketing channels. The information age has taken these channels out of the paper world into the electronic world. For the most part, courts and law firms fit the model of business to business (B2B) electronic commerce. The fit is not 100 percent because there are definite elements of business to customer involved in the businesses of both courts and lawyers. However, to the extent that courts and lawyers transact the business of dispute resolution, a clear case can be made for the B2B e-commerce model.

What is the dispute resolution channel of commerce? The channel begins with the facts of the dispute. That may be a simple automobile accident or a broken promise. Those underlying facts become the basis of a claim. Usually the claim takes a written form such as a letter, but many times the claim is made orally by an individual to an organization. If the claim is not finally resolved, then a lawyer is usually consulted. The lawyer then makes contact with the individual or organization and attempts to resolve the dispute. If the dispute is not resolved at this point then the lawyer typically will file a lawsuit in a court. Ultimately the court renders a judgment and the suit is finally resolved.

How does e-commerce and the information age affect this channel of commerce? Generally speaking, e-commerce changes a service-related channel of commerce to a transactional-related channel. In the transactional world, time, space and location become less significant. Therefore, a channel’s hierarchy is reduced and sometimes flattened as many steps in a process are removed or combined. The result is that lawyers, judges and clerks can concentrate on their core competencies becoming less distracted by exterior matters. Thus, the availability of networked information and high-speed computers allows for smaller, more nimble competitors to operate more profitably by focusing on their core competencies. In the industrial age, location was a driving consideration. For example, the three rules of the value of real property, location, location and location, make it clear how important the geography of a business was during the industrial age. In the information age, however, location is becoming insignificant as networked individuals and organizations compete from any place in the world.
If we can apply what is happening in other industries to lawyers and the courts in the dispute resolution channel of commerce, we can expect the following changes to occur:

• Time delays will be reduced
• Post office delays will be eliminated
• Time uncertainty can be reduced in financial transactions as a migration to electronic billing and purchasing occurs
• Immediate acknowledgment of receipt of information will allow for a better and more trusting relationship between lawyer and client and lawyer and Judge
• Communication of service completion to clients will allow clients to plan other business transactions in a timelier manner
• The one time entering of information will allow for greater efficiencies, reduced costs and increased profits
• Paper and mail costs can be reduced or eliminated
• Financial transactions can be automatically placed into proper accounting categories
• The danger of lost or destroyed paper can be eliminated

E-commerce makes location insignificant. So if a law firm in Hawaii can do a better, cheaper job, then they will compete for business in Georgia. E-commerce also changes distribution channels and creates new distribution channels. Peter Drucker, the management expert for the information age, points out that new distribution channels change the identities of customers. These distribution channels change how and what customers purchase. They change consumer interaction, patterns of financing and business structures. In essence, these channels change the entire economy.

Two Examples of eLawyering
Legal Advice Line
Legal Advice Line (see www.legaladviceline.com) has been providing assistance to this market since 1997. They have served almost 200,000 clients and prepared over 50,000 documents. The company uses state of the art Internet and document assembly tools to make unbundled legal assistance available to consumers at extremely low fixed prices. Its Internet virtual office ties together lawyers in all fifty states who are immediately available to clients for consultation over the telephone. This Internet technology makes it possible for the company to acquire the under-utilized time of lawyers and make it available to clients who need their help. The system makes it possible for attorneys to serve the needs of pro se clients from anywhere and on their own time schedule. Client intake records, record keeping, payment records, case notes, document review and pleading preparation are all handled through one integrated system. All that a court system needs to give pro se litigant’s access to these services is a telephone.

At the heart of this system is Legal Advice Line’s call center and proprietary case management website called CATS – the Client-Attorney Telephony System. At the center, triage attorneys and staff screen cases and set up client files on the website.

A database keeps automatic real time records of every client interaction. In the field service attorneys have access to these files through the password-protected website. Once a case is set up the service attorney is notified by instant message or by telephone. A conference call then links the client with the counselor in his state.

The attorney accesses the client file through a discrete and secure web page. He or she makes notes on the matter, categorizes the nature of the client’s concern and determines what action might be beneficial.

Case records are constantly monitored by senior staff at the call center to make sure nothing is overlooked.

An important part of the company’s pro se capability is the proprietary DASH document assembly system. Through it, either the telephonic consultation attorneys or, where appropriate, the pro se litigants themselves can prepare complete and accurate pleadings.

From the virtual office either the attorney or the caller can select the appropriate form from a simple electronic list. DASH is completely resident on the website and requires no downloads or plug-ins to operate correctly.

DASH will create completed legal forms in Word or WordPerfect format, which can be edited by the user at a later time. The system eliminates the need for the user to read and understand the legal form. Rather it asks the client to supply information in response to a series of questions. Carefully constructed decision trees automatically populate the form. The program will not permit necessary information to be omitted.

Payment can be handled through a variety of means. Online checks, credits cards or prepaid subscriptions, which generate PIN numbers for the client’s use.

Once payment is completed, accurate and complete sets of pro se pleadings can be downloaded at any location chosen by the user.

In combination with low cost access to attorneys licensed in each state, the document assembly system provides a complete answer to the needs of pro se litigants.

For more information about Legal Advice Line, contact Neil Ruther or Mark Cauchon at 1-888-367-5252.

VirtualCourthouse™

Founded in 2001 VirtualCourthouse™ ( see www.virtualcourthouse.com) is a breakthrough service in the legal alternative dispute resolution (ADR) process. VirtualCourthouse.com™ is an Internet-based service that enables parties to submit disputed claims, responses and supporting material in digital form for resolution by a neutral provider of Alternative Dispute Resolution (ADR) services. VirtualCourthouse provides all of the traditional ADR processes including arbitration, mediation, neutral case evaluation and settlement conference, however, VirtualCourthouse’s multimedia, internet-facilitated service and panel of highly qualified neutrals offer a more efficient, effective, and flexible process. VirtualCourthouse has developed the Dispute Resolution Engine (DRE) which has been deployed for several significant pilots with insurance companies, lawyers and neutrals. Almost 1,000 cases have been filed and adjudicated. Customer evaluations which are conducted on each case reveal a high level of user satisfaction with the technology and service. A dispute can be resolved for as little as $200 per party – considerably less than the time and expense involved in going to court.

A key benefit specific to institutions is VirtualCourthouse™’s flexible decision-making tools that access VirtualCourthouse™’s databases for providing statistical analyses on rulings trends by category, by geography, by neutral, by reward. Thus, VirtualCourthouse™ is itself a key tool in effective business planning. These ADR services can include arbitration, mediation, neutral case evaluation or a settlement conference by members of a panel of pre-qualified neutrals. VirtualCourthouse™ creates a marketplace by recruiting the neutrals, administering the electronic case file, and providing access to the system to members of the plaintiff and defense bar, including insurance staff counsel, claims agents and the parties. The service allows customers to rank neutrals and evaluate results, providing statistical analysis of trends in rulings and results. It also tracks cases, provides management reporting and oversight to institutional customers such as commercial companies, governmental agencies and courts. The system also provides a mechanism to refer cases to ADR programs.

VirtualCourthouse™ provides an independent forum by enabling parties to select qualified neutrals (typically retired judges or attorneys with specific experience), submit digitized materials, schedule an ADR event and track other activities throughout the effort to resolve the claim. Critical to the design of this service is its neutrality and independence: VirtualCourthouse™ impartially facilitates neutral selection by providing structured communication among parties via a controlled and secure message service. The system thereby assures the parties that ex-parte communications do not occur. It also allows the parties to communicate independently of the neutral in a secure private fashion. All communications relating to a case are recorded in a communication report. Any party can attach digital exhibits such as digital photographs or scanned images of medical records. The Neutral can use the message service to communicate with all parties thereby avoiding any potential of ex-parte communications. VirtualCourthouse™ streamlines every step in the process and minimizes the need and costs of unnecessary face-to-face meetings, scheduling conferences, mailing, and copying. The system allows institutions to choose customized elements to monitor the caseload, trends in case results and rulings by the neutrals. The increased predictability created by VirtualCourthouse™ provides a compelling value proposition to institutions facing increased pressure to use ADR services to reduce dispute resolution costs.

VirtualCourthouse™ is easy to use. Claimants and respondents submit their claims along with relevant supporting material in digital form. The most a user is required to have is a computer, if necessary a scanner, and Internet connection, and an e-mail account.

VirtualCourthouse™ delivers value to three separate constituencies – the claimant, the neutral and the respondent.

The VirtualCourthouse.com™ Internet process
The VirtualCourthouse.com™ process is simple and straightforward.
• A case is initiated and a list of Neutrals is selected and the Neutrals are ranked
• A system generated email is sent to the other party, inviting them to join the case
• The other party joins the case and a Neutral is agreed upon
• The Neutral reviews the case initiation, and sends an email to parties, confirming the type of proceeding (online or face to face) and the fees
• The claimant prepares a case presentation and uploads the scanned documents into the online case
• Once complete, a system generated email is sent to the respondent, advising that the claimant has completed the presentation, and now it is time to submit their case presentation
• Once the case presentations are complete, a system generated email is sent to the Neutral advising them to review the evidence and render a decision
• Once reviewed, a verdict is submitted online, and a system generated email is sent to both parties notifying them a verdict has been rendered

The Challenge
The legal profession has struggled to evolve its business processes and the delivery of legal services to channels of eCommerce. Only a few examples exist. So what is standing in the way of this evolution? Why can’t the legal profession keep pace with other business models?

There are many factors that inhibit and deter a true coordination of all of the elements necessary to allow for the virtualization of the legal profession. The people involved in the legal process, traditional legal institutions, and the types of information needed are all variables that prevent the legal world from solving its problems by electronic means. The participants in the legal process are the largest block to virtualization of the law. More often than not the lawyer – client views the delivery of legal services as a product of a relationship which often is personal as well as professional.

The litigants are a problem because of their geographical diversity, political diversity and institutional diversity. They have competing goals and they are usually participating in an adversarial capacity. The litigants do business and have disputes in different cities, different counties, different states, different regions and even different nations. No individual court, legislator or executive has authority to compel their action.

The courts, where disputes are resolved, are also geographically, politically and institutionally diverse. There are federal courts, state courts and county courts. Each court is created by a separate constitution and separate legislation. Each court is also funded by a different executive/legislative budget process. County courts in some states are funded entirely by the state budget, while others are financed only by the county budget. Some courts even receive funding by a combination of state and county budgets.

The Washington-Baltimore metropolitan area is just one example of the many metropolitan regions which have legal systems that are not currently conducive to virtualization. The Washington-Baltimore region is composed of two states, Maryland and Virginia, and the District of Columbia. Within this region, the Federal court system is composed of four separate courts: (i) the U.S. District Court for Maryland-Baltimore; (ii) the U.S. District Court for Maryland-Southern Division-Greenbelt; (iii) the U.S. District Court for the District of Columbia; and (iv) the U.S. District Court for Northern Virginia. There are nine state trial courts: (i) Fairfax; (ii) Arlington; (iii) DC Superior Court; (iv) Prince George’s County; (v) Montgomery County; (vi) Howard County; (vii) Anne Arundel County; (viii) Baltimore City; and (ix) Baltimore County. These fifteen separate trial courts have separate computer systems and separate databases and separate ways of doing business. Moreover, no one jurisdiction has the capacity to compel another to subscribe to their way of doing business. These characteristics prevent the courts and the attorneys from unifying legal business by electronic means.

It is all about change
Change is an inevitable product of the technology offered by the information age infocosm. Ordinarily, people resist, fight or ignore change. When those dynamics of resistance occur, change in people’s work patterns occur very slowly and productivity decreases. On the other hand, when change is embraced with an attitude of acceptance, people’s work patterns change very fast and productivity dramatically increases.

Change is the master of all productivity improvements. Without change, there is little room for improvement. With change, the foundation for improvement is set. Change, however, does not guarantee improvement and success. Many people have examined the elements of change over the last decade. While some businesses have taken a radical approach, others have taken a methodical approach. Both approaches are probably needed to effectuate efficient change.
Re-engineering guru Michael Hammer represented the radical approach in the early 1990s when he said: “It is time to stop paving the cow paths. Instead of embedding outdated processes in silicon and software, we should obliterate them and start over.” Hammer advocated a “re-engineering” of our businesses using the power of information technology to radically redesign our business processes in order to achieve dramatic improvements in their performance. He maintains that the heart of re-engineering is the notion of discontinuous thinking or recognizing and breaking away from outdated rules and fundamental assumptions. Hammer’s principles of change are:
(1) Organize around outcome not tasks;
(2) Have those who use the output of the process perform the process;
(3) Subsume information-processing work into real work that produces information;
(4) Treat geographically-dispersed resources as though they were centralized; (5) Link parallel activities instead of integrating their results;
(6) Put the decision point where the work is performed and build control into the process;
(7) Capture information once at the source.

Finally, Hammer says to THINK BIG. Over the last fifteen years, the radical-obliteration approach has moderated into the more methodical approach. This approach is represented by David Osborne and Peter Plastrik’s 1997 book Banishing Bureaucracy. Their thesis is that organizations and, therefore, processes, change when a few fundamental levers of activity are changed. This results in cascading change throughout the organization. Osborne and Plastrik maintain that “[t]here is no recipe you can follow to reinvent government, no step-by-step progressions you must adhere to.” In order to impact the levers in each organization, they must be approached with a clear strategy. Osborne & Plastrik identify the five Cs of change as:

PURPOSE: Core Strategy, Clarity of Purpose, Clarity of Role, Clarity of Direction
INCENTIVES: Consequences Strategy, Managed Competition, Enterprise Management, Performance Management
ACCOUNTABILITY: Customer Strategy, Customer Choice of Service, Competitive Choice, Customer Quality Assurance
POWER: Control Strategy, Organizational, Empowerment v. Hierarchy, Employee Empowerment, Community Empowerment
CULTURE: Culture Strategy, Breaking Habits, Touching Hearts, Winning Minds.

The challenge is to apply these principles to the process of litigating disputes and delivering legal services so that the repetitive, costly, paper-dependent process can be replaced by electronic processes which allow the sharing of information without the necessity of redundantly repeating the input of the information. In other words, integrate the litigation process.

How barriers to change are removed

Students of the dynamics of CHANGE will testify that change does not occur unless there is:

• Leadership
• Strategy
• Management

The first step is the most critical – Leadership. The bar, the courts and the litigators need to make change a priority. For instance, Chief Justice Malarkey of the Colorado Supreme Court resolved to do electronic filing in 1999. Then the Chief Judge told the rules committee to adopt a rule – not to debate electronic filing. Today Colorado is the only state to have state wide electronic filing of court documents. Now that is leadership. The adoption of electronic filing in the courts helped spur the organized bar in Colorado to also embrace electronic filing. A domino effect ensued with the court clerks – then the prosecutors – then the litigants. That is how leadership motivates change. But one must ask why is there only one out fifty states that has electronic filing. Is it because leadership has not commanded the change? eLawyering faces the same challenges and obstacles. Who will lead the way?

Cost of legal services does not equal value of the service
The cost of litigation has exploded in the last ten years. Much of the cost of litigation is the product of inefficient and antiquated business processes. A major contributing factor to the cost is litigation’s dependence on paper. The dependence on paper starts with the litigants is perpetuated by their lawyers and is required by the courts.

by Judge Arthur M. Monty Ahalt ( Ret.) – March 13, 2008