Business of Law

Tax boards use an online system to resolve disputes

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As a proving ground for online dispute resolution, there is no better venue than eBay. Transactions there give rise to some 60 million disputes a year. Virtually all are handled through eBay's own ODR process. Ninety percent of the disputes are resolved through the software alone, without a need for human intervention.

Of course, eBay and ODR are a natural fit. Buyers and sellers make their deals entirely online, so it makes sense for them to handle their disputes there. But what about brick-and-mortar disputes? Can eBay's style of ODR work to resolve them?

For one decidedly brick-and-mortar type of dispute—property tax appeals—the answer is turning out to be yes.

In 2011, the man who designed and ran eBay's ODR system, Colin Rule, left eBay and partnered with Chittu Nagarajan, the woman who formerly ran the largest ODR system in Asia. Together they founded Modria, where they assembled their own ODR platform, which was based on technology they licensed from eBay.

An early customer was the British Columbia government, which used the platform to manage appeals of property assessments. It was subsequently adopted by property tax assessors in Durham County, North Carolina; Alachua County, Florida; Orleans Parish, Louisiana; and Davidson County, Tennessee. In December, the Ohio Board of Tax Appeals launched a statewide online resolution center powered by Modria's technology.


Modria's name is an acronym for "modular online dispute resolution implementation assistance." The technology is built around four modules, representing four stages of ODR: problem diagnosis, automated negotiation, mediation and arbitration.

"These modules work like Legos," Rule says. "We can click them together and dynamically build appropriate resolution flows for a wide variety of different kinds of disputes."

In Ohio, where most appeals still require a live, in-person hearing, the platform is used for case management more than case resolution. It starts with a problem-diagnosis module that helps a taxpayer evaluate the strength and costs of a potential appeal. Many cases never pass this stage, Rule says.

If the taxpayer moves forward, the case is filed through the platform and managed there throughout the process. The platform even manages check-ins on the day of the hearing and alerts the hearing examiner when the parties are ready. Hearing examiners use the platform to draft their decisions, drawing on templates and a library of preapproved language covering different points of law and issues.

By contrast, in Davidson County, Tennessee, which includes Nashville, the process is less formal. There, a taxpayer goes online to check his valuation. If he decides to challenge it, Modria's platform walks him through the process of filing a review request. The taxpayer explains why he believes his assessment is incorrect and can upload photographs and other supporting documentation. The system even allows the taxpayer to add information on comparable properties from a third-party property-valuation service.

Someone from the assessor's office reviews the filing and assigns it to an appropriate next step. Depending on the case, an inspector may visit the property and meet with the taxpayer. Most disputes are resolved through a mix of online and offline communications.

Modria's modular approach enables the technology to be adapted for a range of uses, Rule says. In the Netherlands, Modria built a system for the Legal Aid Board that helps divorcing parties reach a separation plan. If they are not able to create a plan on their own through the system, it provides an online mediator who will assist them. If mediation fails, the case is moved to a final, binding decision-maker.

Rule, who is not a lawyer, says that when he first began working in ODR more than a decade ago, lawyers were skeptical of it, if not scared. Now, he believes ODR is on its way to becoming widely used and accepted.

"For attorneys who are open-minded about this technology," Rule says, "there is a huge potential."

This article originally appeared in the March 2015 issue of the ABA Journal with this headline: “Governments Go ODR: Tax boards use an online system to resolve disputes.”

Robert Ambrogi is a Rockport, Massachusetts, lawyer and writer. He covers technology at his blog LawSites and co-hosts the legal affairs podcast Lawyer2Lawyer.

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