The China and ADR Design series, organized by Rick Bales (Ohio Northern), explores developments and innovations in Chinese arbitration and what we can learn about them here in the US.  The posts examine a range of topics, from the growth of arbitration institutions to the use of artificial intelligence, with a focus on the larger questions of ADR design and practice. The latest installment turns to crowdsourced online dispute resolution, another example of how technology is expanding the possibilities for resolving disputes.

Yun Zhao and Zhiming Xiao

Imagine that a buyer and seller disagree over a transaction on an online marketplace. Instead of sending the dispute to a judge, arbitrator, mediator, or platform employee, the marketplace turns to its own users. Members of the community review the evidence, vote, and the platform acts on the result.

This is crowdsourced online dispute resolution, or CODR. Traditional online dispute resolution moved familiar processes such as negotiation, mediation, and arbitration onto digital platforms. CODR makes a more fundamental change: the person resolving the dispute need not be an individual professional neutral. That shift raises a deceptively simple question for the ADR field: who is qualified to resolve a dispute?

From Online ADR to Crowds

CODR draws on the broader idea sometimes called the “wisdom of crowds”: under the right conditions, aggregating the independent judgments of many people can produce useful results. Online platforms add something important to that idea. They already possess a community of users, transaction data, rules governing participation, and mechanisms for implementing outcomes. Dispute resolution can therefore be built into the platform itself.

The idea is not entirely new. eBay experimented with community-based adjudication through its Community Court, in which qualified users considered disputes over negative feedback. The model was eventually discontinued, but it demonstrated that a large platform could delegate decision-making authority to its users. China’s Xianyu Small Court has taken the idea further.

How Xianyu Works

Xianyu is an Alibaba-affiliated marketplace that began with second-hand goods and later expanded into virtual goods and services. When direct negotiation fails, a dispute can be submitted to the Small Court. The platform then draws on its user community rather than automatically assigning the matter to a conventional professional neutral.

One particularly interesting feature is expertise matching. Xianyu uses algorithms to categorize hundreds of thousands of active users according to areas of expertise, such as musical instruments or fashion. Panels can include qualified “expert jurors” alongside ordinary users. Jurors independently review the evidence, and the outcome is determined by majority decision.

Enforcement is equally important. Xianyu does not need to send every decision to a court for recognition. Because the dispute arises inside a platform ecosystem, the platform can implement outcomes through measures it controls, including restrictions on accounts or funds. The result can be fast, inexpensive, and closely integrated into the transaction itself.

Expertise Without Professionalization?

ADR normally links decision-making authority to professional status or appointment. Arbitrators are selected for legal or industry expertise; mediators are expected to satisfy professional and ethical standards. CODR separates expertise from professional office. A user who has bought, sold, repaired, or evaluated musical instruments for years may understand a dispute about an allegedly defective instrument better than a generalist decision-maker.

But expertise matching creates a paradox. The more elaborate the qualification system becomes, the less the process resembles an open crowd. And because the platform designs both the qualification criteria and the matching algorithm, another question immediately follows: who decides who counts as an expert?

Legitimacy, Neutrality, and Explanation

Those questions point to the larger problem of legitimacy. A judge derives authority from the state. An arbitrator ordinarily derives it from party agreement and an established legal framework. A CODR juror derives authority from a more complex combination of user consent, platform rules, community participation, and public law. In China, Article 63 of the E-Commerce Law expressly permits e-commerce platforms to establish online dispute-resolution mechanisms and publish rules for resolving disputes.

That makes Xianyu difficult to classify as purely private or purely public. The platform designs and operates the system, but it does so within a legal framework that expressly contemplates platform-based dispute resolution. Legitimacy therefore depends not only on consent, but also on how the platform constructs the crowd.

Participation alone does not guarantee neutrality. Crowds can reproduce shared biases, follow dominant opinions, or identify too closely with the platform community. Algorithmic juror selection adds another layer of opacity if users do not understand how decision-makers are chosen. CODR thus replaces the familiar question, “Is the neutral independent?” with a more complicated one: Is the crowd, and the system that constructs the crowd, sufficiently impartial?

A related problem is explanation. A professional arbitrator can issue a reasoned award, and a mediator can explain the process directly to the parties. A crowdsourced system designed to handle large numbers of relatively small disputes may instead aggregate individual votes. That is efficient, but a majority outcome does not necessarily tell the losing party why the case came out that way. Transparency therefore may require information about juror qualifications, selection methods, voting procedures, conflicts of interest, and the basis for the resulting decision.

Why This Matters for ADR

Xianyu is compelling not because every dispute system should imitate it, but because it exposes assumptions ADR practitioners often take for granted. We tend to assume that legitimate dispute resolution requires an identifiable professional decision-maker. CODR asks whether legitimacy might instead arise from a carefully designed process that combines collective intelligence, relevant expertise, contractual consent, technological enforcement, and external legal safeguards.

The answer need not be to replace arbitrators and mediators with crowds. One promising direction may be hybrid: professional neutrals could use structured collective input on discrete factual or technical questions while retaining responsibility for the process and ultimate decision. Either way, CODR changes the frame. The question no longer is simply whether dispute resolution can occur online. It is who, or what, can legitimately exercise dispute-resolution authority once technology makes it possible to distribute that authority across a network.

The next post stays with legitimacy but shifts the level of analysis. Dan Xie and Stephen Ware examine what it means for an arbitration institution itself to be independent, asking whether formal legal status is enough or whether funding, appointments, governance, staffing, and organizational relationships matter as well.

About the authors

Yun Zhao is Henry Cheng Professor in International Law and Associate Dean (Mainland Affairs) at the Faculty of Law, The University of Hong Kong. Zhiming Xiao is a PhD candidate at the Faculty of Law, The University of Hong Kong, whose research interests include dispute resolution.

This post draws on Yun Zhao and Zhiming Xiao, “The Regulatory Framework for Crowdsourced Online Dispute Resolution in the Digital Era,” in Richard Bales & Dan Xie, eds., The Cambridge Handbook of Arbitration in China (Cambridge University Press, forthcoming spring 2027). A related article by the authors is available open access in the Pepperdine Dispute Resolution Law Journal.