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Business to Regulator Dispute (B2R)

Background

Regulators are the regulation enforcement organizations that are usually under the influence of regional governments or governmental divisions. All businesses are subject to some levels of regulations. In the less regulated economy, businesses have less interaction with regulators, in the highly regulated economy, businesses are quite engaged with many different regulator enforcement agencies. For example, in US, a business does not require a business license to start, while in China, the business has to get a license stamped by SAIC (State administration of Industry and Commerce) to start its operation. Overall, what we observe is that the economy becomes more and more regulated. Therefore the interaction between businesses and regulators will not become trivial any time soon.

B2R disputes

If there is interaction, there must be dispute. Since the businesses face more and more regulations, we can be sure the disputes between businesses and regulators are always there. Some of disputes could be related to the different interpretation of regulations, some to the judgment of the individual staff and some due to corruption of regulators. Most big companies can afford to allocate resources to deal with these bureaucrats while most MSME do not have this kind of luxury. Therefore, in our survey of MSME globalization, the biggest challenges facing MSME is the dispute between MSME and the foreign regulator.

ODR for B2R disputes

In many disputes between the businesses to regulators, we found that fair communication channels, frequent information exchanges, clear expression of the facts, and advise of senior regulators are essential for the settlement of the disputes. Furthermore, the regulatory requirements are not law and there is quite some room for adjustment, particularly in the East-Asian region. The enforcements are easy to achieve if both sides reach an agreement. Therefore, we think online dispute resolution should be useful in dealing with these disputes.

We propose to develop an ODR system that tails to the requirements of B2R disputes. The system should made up out of the following stages:

Dispute filing

A business can file a dispute to the system, fill in relevant information and providing background material, ground for dispute, documents processed by the regulator or regulators, and other relevant materials. The ODR system then will record the names and electronic address of the parties involved in the dispute. ODR will notify either party and prompt the start of the ODR process. The regulators will respond to the business and fill in the information that supports the agency’s decision.

Regulation compliance check

The ODR system will review the compliance of business and the regulator with the AI module that is trained with massive cases. After the review, ODR system will feed back the recommendation to both parties.

Negotiation

Within a limited time, the ODR system will open the channel which both parties can negotiate through, and the exchange a negotiation form. The resolution can be reached.

Mediation

If no resolution is reached during the negotiation stage, the ODR system will notify both parties to undertake the next step: the mediation stage. Mediators are recommended, and each party can refuse the recommendation for no more than 3 times. The mediator will propose a resolution and all parties will comment and grade. If no resolution is reached within a certain time limit, the mediation will expire.

Final advice

The system will make the final suggestion for both parties and declare the end of ODR. All the materials used in the ODR will not be available for both parties to download. The system will not disclose the information without the written consent of both parties.