Home | Databases | WorldLII | Search | Feedback University of New South Wales Law Journal Student Series

Zhang, Shuyuan --- "Digital Innovation of China's Traditional Dispute Resolution Mechanism" [2024] UNSWLawJlStuS 32; (2024) UNSWLJ Student Series No 24-32

DIGITAL INNOVATION OF CHINA’S TRADITIONAL DISPUTE RESOLUTION MECHANISM

SHUYUAN ZHANG

I INTRODUCTION

With the rapid development of China's economy, traditional dispute resolution mechanisms, such as litigation, arbitration, and mediation, have gradually revealed various shortcomings. These mechanisms have gradually lost public trust due to inefficiency, high cost, and poor timeliness. Against this background, the booming development of the Internet and intelligent technology has provided new directions and impetus for reform. Therefore, the ideas and concepts of intelligent courts and digitalization processes emerged. These technologies help traditional dispute resolution mechanisms fully optimize resource allocation, improve processing efficiency, and restore public confidence in dispute resolution mechanisms by continuously increasing transparency. This essay first deeply explores the problems existing in China's traditional dispute resolution mechanism and analyzes the potential needs behind its problems. The article then analyzes how digitalization can improve these problems, especially during the pandemic. Finally, the article will discuss in detail the challenges and disputes that may arise from using new technologies in the digitalization process from the perspectives of China and Australia and put forward constructive suggestions and directions for the future digital reform of China's dispute resolution mechanism. This article aims to comprehensively examine the limitations of traditional disputes and the complexity of the digital transformation process through such a layout.

II CHALLENGES AND DIGITAL NEEDS IN LITIGATION

A Challenges and Needs of Digitization in Litigation

1 Historical Review and Modern Development

An old Chinese initially says, ‘It is better to die of hunger than to be a thief; it is better to die of boredom than to fight a lawsuit,’^[1] which expresses the public’s negative view of litigation. This phenomenon is because traditional litigation procedures are lengthy and costly^[2], and corruption can occur during the trial process^[3], resulting in a lack of fairness in the final verdict. This means as another adage goes, ‘win the case, lose the money.’^[4] Therefore, historically, the Chinese people have not considered litigation procedures to be a good way to resolve disputes.

However, to reverse the public’s stereotypes about judicial proceedings, the Chinese government is still working hard to improve the judicial system continuously.^[5] For example, the highly representative codes ‘Procedural Law of Administrative Litigation of China’ and ‘the Civil Procedure Law’ were promulgated in 1990 and 1991, respectively.^[6] This phenomenon means that China has made significant progress in improving the judicial dispute resolution mechanism and enhancing people's awareness of rights protection, enabling citizens to protect their rights by the law in litigation.

2 Opportunities and Challenges

Additionally, changes in China’s economic reform and opening-up strategies will bring more disputes.^[7] This phenomenon is because increased economic activities accompany more civil and commercial disputes , while China’s large population base is also the reason for more disputes.^[8] For example, civil and commercial disputes reached 11.045 million, 34.7 times that of 1978.^[9] This means that people in a ‘law-based’ context will be more likely to take up legal weapons to protect their rights and interests. For example, from 1978 to 2015, the number of litigation cases in China increased from 610,000 to more than 16.71 million.^[10]

Moreover, China’s economic development has also brought new commercial disputes, such as Internet disputes. This phenomenon is because the introduction and popularization of Internet technology has caused most business activities to shift from physical to online.^[11] This means that the judicial system has not yet perfected the rules for jurisdiction over online disputes, and traditional courts need to face and resolve more complex cross-regional and even cross-national legal issues, further increasing the difficulty and burden of court trials.^[12] Therefore, traditional courts under different jurisdictions will lead to increased costs for parties in terms of time and cost in resolving disputes.

In contrast, the growth rate of Chinese judges is much lower than the explosive growth in litigation volume. For example, there were 196,000 judges in 2015, only 3.27 times the number of 60,000 judges in 1981.^[13] This means that the courts need to spend more time dealing with the growing number of cases. For example, the Supreme Court claimed in its 2017 work report that the average number of cases concluded per judge in Zhejiang Province was 315.^[14] Furthermore, the judge quota system makes the shortage of judges even worse. This is phenomenon because the Supreme People’s Court stipulated in 2014 that the proportion of court personnel with the power to hear disputes be limited to 39%, aiming to strengthen the professional development of the judge team.^[15] Therefore, this move not only caused the number of judges nationwide to drop by 46%^[16], but the continued increase in workload has also put the lives and health of judges at risk^[17]. For example, 85 judges died between 2013 and 2018.^[18]

Moreover, traditional courts reduce court efficiency by handling case management through pen and paper. This phenomenon is because there is a possibility of errors in manual processing. Therefore, the Supreme People’s Court pointed out in 1997 that courts need to establish computer systems to improve their efficiency in handling cases.^[19]

In conclusion, China’s traditional litigation faces more severe challenges and new opportunities in developing the new era. With the increase in economic activities and the popularization of Internet technology in the new era, courts that are short of judges need to handle more complex cross-regional cases more flexibly. Therefore, in this context, it is particularly urgent to promote the digital transformation of the courts.

B Challenges and the Need for Digitalization in Arbitration

1 Historical Review and Modern Development

Initially, Chinese people prefer arbitration to litigation. This phenomenon is because people are generally resistant to lawsuits due to the influence of the Confucian thought that ‘harmony is the most important.’^[20] Therefore, against this background, arbitration has continued and developed in China to this day.

In addition, against the backdrop of China’s economic reform, opening up and development, and the increasing volume of international trade and foreign investment, foreign investors are more inclined to choose arbitration to resolve disputes and problems arising from their investments in China.^[21] This phenomenon is because when it comes to resolving cross-border trade disputes, foreign investors believe that the local court litigation system is complex, inefficient, and characterized by local protectionism.^[22]

In contrast, arbitration, as a relatively independent institution, allows foreign investors to spend less time and cost to resolve disputes encountered in their investments in China. For example, arbitration can help parties avoid the delays and inflexibility of administrative proceedings before national courts and the uncertainties that characterize international litigation, including disputes over jurisdiction.^[23]

Moreover, Chinese arbitration is divided into foreign-related and domestic arbitration awards. This article mainly analyzes and highlights China’s international arbitration institutions, such as the China International Economic and Trade Arbitration Commission (CIETAC) and the China Maritime Arbitration Commission (CMAC).^[24] This phenomenon is because international trade has an increasingly important impact on China’s economy, and the China International Commercial Arbitration Center is one of the largest commercial arbitration centers in the world, with many more representative disputes and cases. For example, since the promulgation of the China International Economic and Trade Arbitration Commission Arbitration Rules in 1988, the number of cases submitted to the CIETAC for arbitration has increased dramatically^[25], with nearly 8,000 disputes arbitrated in 10 years.^[26]

Furthermore, to further strengthen the fairness of arbitration awards in China, the Chinese government promulgated the Arbitration Law of the People’s Republic of China in 1995.^[27] This means that under the protection of legislation, the professionalism and finality of arbitration are greatly improved, and its jurisdiction is expanded.^[28]

In addition, China strongly supports the development of international arbitration in order to better integrate with international arbitration.^[29] This phenomenon is because, historically, arbitration has been the primary option for resolving commercial disputes between countries.^[30] For example, the International Chamber of Commerce's International Court of Arbitration has seen a 20-fold increase in the number of arbitration requests it receives in the 50 years since 1956.^[31] This phenomenon means that the arbitration rules of the China International Economic and Trade Arbitration Commission are, to a certain extent, compatible with the international arbitration rules. For example, in 2015, the China International Economic and Trade Arbitration Commission introduced the procedures of emergency arbitrators to adapt to international arbitration in Hong Kong, which are reflected in the International Chamber of Commerce's Arbitration Rules in early 2012, the Stockholm Chamber of Commerce, and the Swiss Chambers Arbitration Institution.^[32] Therefore, by strengthening compatibility with international arbitration rules, China can participate more effectively in international commercial arbitration and enhance its influence and participation in international arbitration.

2 Challenges and Digital Needs

Firstly, the arbitration practice is too long. This phenomenon is because even the Beijing Arbitration Commission (BAC), which hears cases relatively quickly, takes two and a half months to conclude the case fully.^[33]

Secondly, arbitration procedures, such as hearings, and the non-finality of arbitration results in China require parties to spend a lot of time and money. This phenomenon is because the arbitration rules stipulate that the arbitration tribunal has a nine-month period for holding hearings and making decisions, which can be extended, and the parties can continue to appeal to the People’s Court.^[34]

In addition, China’s arbitration procedures are rigid and complicated. For example, Wang Chenguang said that CIETAC now requires arbitrators to spend more time attending hearings and meet with two or three people multiple times when necessary.^[35] This means that both parties also need to take the time to ensure that they attend these hearings.

C Challenges and the Need for Digitalization in Arbitration

1 Historical Review and Modern Development

Initially, the traditional concept of ‘Mediating disputes by smoothing away discords’ allowed mediation to play an important role in Chinese history. This phenomenon is because Chinese people prefer to rely on informal community mediation led by neighbors, relatives, or elders to resolve disputes and maintain harmony among people.^[36] This means that this phenomenon can only make people generally resist adopting more intense and confrontational litigation methods. Therefore, litigation is a more common and frequently used method of dispute resolution in China. For example, in 1980, the number of disputes handled by the People’s Mediation Committee was almost 11 times that of the tribunal.^[37]

Moreover, the formal promulgation of Provisional General Rules for the Organization of People’s Mediation Committees in 1954 marked the legalization of mediation and its continuous improvement and expansion in China. For example, in 1989, there were nearly 950,000 mediation committees and 6 million mediation committee members nationwide.^[38]This means that China’s mediation model has become more mature and efficient.

Additionally, China has further enhanced the practicality and effectiveness of mediation by promulgating the ‘Opinions on Improving Alternative Dispute Resolution Methods’ and integrating models such as ‘Courtroom on Horseback’ and ‘Maple Bridge Experience’ into mediation.^[39]

Furthermore, as China’s mediation model becomes more mature, it is divided into four models: 1. People’s mediation. 2. Administrative mediation. 3. Arbitration and mediation. 4. Trial and mediation.^[40] Among them, people’s mediation is the most common. This phenomenon is because people’s mediation relies on villagers or community members to mediate disputes.^[41] This means that given China’s huge population base, people’s mediation can, to a certain extent, resolve disputes with a higher degree of efficiency. Moreover, the success rate of arbitration institutions in resolving disputes has increased significantly since they joined in mediation. For example, between 1984 and 1986, arbitration and mediation enabled approximately 88% of domestic disputes to be resolved through mediation.^[42]

2 Dilemmas and Challenges Faced by Mediation

However, since China entered the reform and opening up in the 1980s, China’s social economy has undergone rapid changes. For example, the transition from a planned economy to a market economy^[43], and then from an ‘acquaintance society’ to a ‘stranger society.’^[44] This means that the traditional mediation model based on acquaintance society faces unprecedented challenges as social relations become more complex and flexible.^[45] Therefore, from 1990 to 1997, the number of disputes handled by the People’s Mediation Committee dropped significantly to 5.5 million.^[46]

In addition, grassroots mediators are not very motivated to mediate and there is a problem of illegal fees. For example, a survey in the early 1980s found that 12.5% of rural mediation committees charged mediation fees.^[47] This phenomenon is because most grassroots people’s mediation committees face financial problems such as shortage of funds.

Furthermore, there is a lack of professional mediators, especially in rural and remote areas. Because there are fewer legal workers in rural and remote areas, and they cannot effectively handle many disputes.^[48] Additionally, mediation without supervision and records loses its fairness to a certain extent. This means that when a dispute occurs, mediators consider its political impact more than the fair and just resolution of the mediation.^[49] Therefore, in a mediation process that lacks records and supervision, there may be factors in which such people use their power to force the mediator to settle the matter and reach a settlement.^[50]

In summary, China’s traditional dispute resolution mechanism has exposed many defects and is unable to fully adapt to and deal with new dispute models presented by social development, such as Internet disputes. Therefore, the digitalization process of China’s traditional dispute resolution mechanism is imminent. This phenomenon is because the advancement of digitalization can use modern technology to address the traditional rigidities in arbitration, mediation and litigation, thereby resolving disputes more flexibly.

III THE DEVELOPMENT OF DIGITAL LITIGATION

A The Transformation of Traditional Courts to Digital Litigation

1 The Concept and Development Stages of Digital Litigation

Firstly, from the litigation perspective, all reforms of traditional courts revolve around ‘smart courts.’ This phenomenon is because the digital innovation emphasized by ‘smart courts’ directly responds to the challenges faced by traditional courts. This means that ‘intelligent court’ have improved the efficiency and transparency of judicial trials and ensured judicial fairness by using ‘intelligent’ means such as the Internet, cloud computing, big data, and artificial intelligence.^[51] Therefore, the rigid procedures and defects in traditional judicial proceedings have been improved and a new litigation model, digital litigation, has been derived as the core concept of ‘intelligence’ runs through all stages of judicial reform.^[52]

Furthermore, according to the literal meaning, digital litigation refers to the fact that in the context of the continuous development of electronic technology and changes in people’s daily lives, courts use digital means, such as the Internet or artificial intelligence, to assist litigation in more convenient ways.^[53]

Moreover, digital litigation is divided into ‘phased mode’ and ‘full process mode.’ On the one hand, the ‘phased model’ refers to the partial use of digital means during the litigation process, such as the use of electronic documents during the case filing stage to play a supporting role. On the other hand, the ‘full process model’ is to re-create a trial system composed of electronic technology, and then maximize the efficiency of judicial operation through all digital means.^[54]

2 Digitalization Process in the Court’s (‘Phased Mode’)

Although the concept of ‘smart court’ was only formally proposed in 2015.^[55] However, its core concept, the word ‘wisdom’, has been used throughout all judicial reforms.

Firstly, the first stage of reform started with the National Court Communications and Computer Affairs Conference in 1996, and its reform focused on introducing technology to improve the efficiency of entering files, including judgment documents. Because the traditional paper-and-pencil entry mode seriously damages the efficiency of the court.^[56]

Furthermore, the second phase runs from 2004 to 2013. The main task of this phase is to apply digitalization to case management and hearings. This means that Internet-assisted court hearings have become a feature of this stage.^[57] For example, in 2005, the Guizhou Court used instant messaging software to help litigants in remote locations during court hearings, and the Beijing Court established a live broadcast platform.^[58]

Moreover, the third stage began in 2014, in which the court’s main task is to use information technology to build an open, dynamic, transparent, and convenient judicial system so that the public can ‘understand, trust and supervise’ judicial operations. This mission led to the creation of Internet courts.^[59]

Finally, in the fifth five-year plan concerning the reform of the people’s courts (2019-2023)^[60], the Supreme Court has promoted the construction of smart courts as one of the top ten goals of judicial reform, emphasizing the use and innovation of artificial intelligence.^[61]

3 AI Improves Court Services in a ‘phased model’

Firstly, introducing artificial intelligence has effectively improved the service efficiency of traditional courts and to some extent solved the problem of inefficiency in courts due to insufficient staff. For instance, the intelligent robot ‘Xiaofa’ can use a childlike tone to explain difficult and difficult legal terms to the parties in everyday language.^[62]

Secondly, the introduction of artificial intelligence has improved the quality of court services and effectively reduced the public's resistance to litigation. Therefore, artificial intelligence meets the spiritual needs of the parties from an emotional dimension and improves the work efficiency of traditional courts, which may in turn enhance the public’s confidence in litigation. For example, a customer in Hebei thought the AI ​​‘Xiao Yu’ was cute, which helped him simplify the case filing process and guided him to file a lawsuit with the court.^[63] Therefore, artificial intelligence meets the spiritual needs of the parties from an emotional dimension and improves the work efficiency of traditional courts, which may in turn enhance the public’s confidence in litigation.

Furthermore, artificial intelligence has assumed more judicial functions in the courts, effectively reducing the judges workload. This phenomenon is because AI can not only arrange administrative tasks such as scheduling, but also support judges by evaluating evidence, analyzing cases, and summarizing disputes that arise during court proceedings. For example, ‘Xiaozhi’ works as a virtual judicial assistant at the Zhejiang Higher People’s Court, specializing in handling financial loan disputes.^[64] Therefore, the application of artificial intelligence not only improves the work efficiency of the courts, but also enhances the accuracy and fairness of judicial decision-making.

4 Internet Court (Full Process Model):

Firstly, the construction framework of the Internet Court mainly benefits from the successful practice of the Taobao platform's online dispute resolution mechanism (ORD), which strives to use Internet technology to resolve online disputes efficiently.^[65]

Additionally, the establishment of the Internet courts has effectively alleviated the pressure on traditional courts, thereby improving the efficiency of judicial trial procedures to a certain extent.^[66] This phenomenon is because the main purpose of establishing the Internet is to separate Internet cases from traditional courts in order to reduce the litigation pressure on offline traditional courts. Therefore, Internet courts were established in three places: Hangzhou (established in August 2017), Beijing, and Guangzhou (both established in September 2018)^[67].

Additionally, as the world’s first court to move all litigation procedures, including the defendant’s defense, to the Internet, the Hangzhou Internet Court’s jurisdiction includes hearing the first instance of civil and administrative cases arising from the use of the Internet in Hangzhou Municipal Court.^[68] Therefore, this innovative judicial model effectively reduces the litigation pressure on traditional courts, and thus brings more positive impacts to traditional litigation.

5 Advantages and Innovations of Internet Courts

Firstly, Internet courts handle cases more efficiently and in less time than traditional courts. For instance, as of October 31, 2019, the Internet Court had filed over 80,000 cases, but the trials only lasted 45 minutes and took about 38 days.^[69] Additionally, Internet courts have a high filing rate. For example, the Hangzhou Internet Court received over 6,000 cases in its first year, at least two-thirds of which were resolved or dismissed online.^[70] This means that the shortcomings of difficulty in filing cases in traditional courts have been improved in Internet courts.

Additionally, Internet courts build digital evidence platforms and provide third-party certification platforms, such as the ‘Preservation Network’^[71], to help parties avoid certification difficulties caused by unclear legal attributes of electronic evidence. This means the Internet Court has further improved its judicial procedures and provided parties with more convenient choices.

6 References to the International Court of Justice’s digitalization process

In contrast, Australian courts have also accelerated the digitization of courts to improve judicial efficiency. Firstly, Australian courts improve trial efficiency by setting up portable electronic courts or introducing new technologies, such as wireless technology.^[72] This phenomenon is because portable electronic courts can provide trial services to remote areas in a flexible manner and increase the speed of data transmission and evidence acquisition.^[73] This phenomenon means that sophisticated recording technology is used to obtain verbal evidence, which can then be presented instantly at the scene once it has been captured remotely. For example, audio and video technology was used to capture evidence given by Aboriginal people during dance ceremonies.^[74] Therefore, the application of technology not only makes evidence acquisition more diversified, but also improves judicial fairness and efficiency.

In addition, Australia uses digital technology to communicate information about cases and the role of the courts to the wider community. This phenomenon is because electronic information dissemination can reach a wider audience and improve dissemination efficiency. For example, court judgments can be viewed on court websites and services such as AustLII.^[75] Therefore, technology enhances information transparency and public trust in the judiciary. Finally, Australian courts are moving towards electronic filing systems. This phenomenon is because the system will integrate archived documents directly into the court’s case management and document repository systems.^[76] This phenomenon means that the availability of electronic court documents will further promote the use of court technology. Therefore, the digitalization process of Australian courts will significantly improve their efficiency and transparency.

B Traditional Arbitration Turns to Digitalization

1 Practice and Advantages of Online Arbitration

Initially, online arbitration is mainly divided into the following two categories:

1. ‘Technology-assisted online arbitration’ refers to using information technology as an assistive tool. This means that it simply combines traditional arbitration procedures with information technology to improve the efficiency and accessibility of arbitration.^[77]

2. ‘Technology-based online arbitration’ relies entirely on digital means, such as online platforms for case management, thereby improving the shortcomings of traditional arbitration.^[78]

Moreover, online arbitration is ideal for small claims or online disputes, such as online loans.^[79] Because compared to traditional arbitration, online arbitration procedures are more straightforward, and electronic evidence in online disputes, such as emails, is easier to extract and upload directly to online arbitration.^[80]

Furthermore, based on the particularity of online arbitration, it attaches great importance to the interpretation of electronic documents and electronic evidence authentication. For example, in ‘the online arbitration rules for domain name disputes and e-commerce disputes’ promulgated by the CIETAC in 2009, it specifically added provisions related to the exchange of electronic documents and the certification of electronic evidence.^[81]

2 The Practices of the Guangzhou Arbitration Commission

Guangzhou Arbitration Commission (GZAC) has further promoted the innovative practice of online arbitration in China. This phenomenon is because it shifted China’s online arbitration to technology-based online arbitration and even released its own online arbitration rules on June 23, 2015.^[82] Additionally, the GZAC Online Arbitration Rules adopted bolder rules and actions, such as establishing an online arbitration platform, and made further innovations in the online rules to enhance the flexibility of online arbitration further. For example, in addition to specific types of disputes, the jurisdiction of GZAC also covers various types of disputes such as online loan disputes and credit card disputes.^[83] This means that Guangzhou Arbitration continues to expand its jurisdiction better to leverage the role and influence of online arbitration.

3 Advantages of Online Arbitration

Firstly, GZAC allows parties to submit documents to the online arbitration platform and view these documents at any time. This means that the parties can not only use digital means such as video conferencing to interact with the parties in the arbitral tribunal, but also use the online platform to check whether the evidence they submitted is accurate at any time, improving the convenience for the parties.^[84]

Moreover, compared with traditional offline arbitration, to supplement or replace traditional oral hearings, online arbitration allows the GZAC to use electronic means, such as by issuing a list of questions, to clarify the facts of the case, thereby increasing the flexibility of the procedure.^[85] Additionally, online arbitration can be adjusted to offline arbitration according to actual circumstances. For example, the identity of the person concerned cannot be verified without submitting identity materials.^[86] This procedure reflects the flexibility of online arbitration and ensures a smooth arbitration process.

Additionally, online arbitration saves more than half of the processing time compared to offline arbitration. For example, the time for the online arbitration tribunal to accept disputes has been shortened to five days.^[87] Furthermore, the parties do not need to consider the choice of the seat of arbitration. This phenomenon is because GZAC allows parties to choose the venue of arbitration freely and provides a default option (the location of GZAC). This means that GZAC’s arbitration procedures are more user-friendly, and helps parties save arbitration costs. Therefore, the above-mentioned online arbitration practices all state that it is more convenient and advanced than traditional arbitration, and can better enable parties to use arbitration means to safeguard their rights.

4 New Trends in International Arbitration

In addition, the International Centre for Settlement of Investment Disputes (ICSID) decided to reduce paper case submissions to improve arbitration efficiency.^[88] This phenomenon is because, effective March 16, 2020, applicants may only submit their cases electronically, including arbitration and post-award applications.^[89] This means that applications for conciliation and fact-finding proceedings must also be submitted electronically, and ICSID requires parties to provide all necessary documents, including witness statements and expert reports, in electronic format.^[90] The solution, therefore, aims to expedite the entire arbitration process and enable ICSID’s work to be conducted more efficiently and environmentally friendly.

C Development of Online Mediation

1 Flexibility and Framework for Online Mediation

Firstly, unlike traditional mediation, online mediation can resolve disputes more flexibly, with efficient means and convenient measures.^[91] Secondly, online mediation in my country can be broadly divided into two types: 1. ‘Online dispute’ mediation refers to the mediation of Internet and online disputes, such as e-commerce shopping disputes. 2. ‘Online’ dispute mediation. It refers to online mediators using modern information technology, such as online dispute platforms, to mediate disputes online.^[92]

Furthermore, mediation will be divided into four levels: 1. Online dispute resolution platforms created by Internet companies, such as Taobao’s ‘Alibaba Wangwang.’ 2. The mediation platform built by the industry to resolve disputes has also become commercial mediation, such as the ‘One-stop Dispute Mediation Platform for the Banking Industry.’ 3. Online mediation platform for the court system. 4. The non-litigation dispute resolution center established by the judicial, administrative department is called People’s Mediation.^[93] Among them, the ‘People’s Court Mediation Platform’ is the largest and most professional, which can better achieve the purpose of mediation. For example, as of April 2022, the platform has handled 27,937,688 disputes.^[94]

2 People’s Mediation (Online) –‘Maple Bridge Experience’

In traditional people’s mediation, the ‘Maple Bridge Experience’ is the most worthy of analysis. This phenomenon is because it achieves significantly better results than traditional mediation. For example, since 2013, it has accepted more than 3.6 million dispute cases of various types, with a success rate of 98.33%.^[95] Now, Zhejiang Province is integrating the ‘Maple Bridge Experience’ with Internet technology and striving to create a new "Internet + Mediation" model.^[96]

Moreover, the Zhuji Municipal People’s Government has strengthened professional training for mediators and optimized the mediation team. For example, experts from the medical and legal fields and celebrities can be invited to serve as part-time people’s mediators.^[97] This means that this model greatly enhances the mediation team’s professionalism and authority and can adapt well to the changing needs of the people. Therefore, continuing to promote the combination of the Internet and ‘Maple Bridge Experience’ can achieve social governance goals as soon as possible.

3 The Rise of Online Court Mediation

Moreover, online mediation helps Zhejiang courts improve the accuracy of records and work efficiency during the mediation process. This phenomenon is because, during mediation, Zhejiang courts use the ODR platform to provide voice conversion functions and generate mediation transcripts.^[98] This means that online mediation greatly reduces the time and economic costs of the parties and effectively relieves the pressure on the judicial system. For example, the Zhejiang court used online mediation to resolve an arrears payment case that had been delayed for three years due to distance issues in less than 30 minutes.^[99] Therefore, the above cases fully demonstrate the flexibility and efficiency of online mediation.

IV ‘ONE-STOP’ DISPUTE RESOLUTION MECHANISM

It is not difficult to see from the previous discussion that China’s dispute settlement mechanism has gradually shown an integration trend. Additionally, this concept was effectively promoted in 2018 when Xi Jinping proposed using technological means such as the big data, Internet and artificial intelligence to establish and improve social governance.^[100] For example, a ‘one-click’ dispute resolution center has been established locally to promote digital dispute resolution.^[101]This phenomenon means that the one-stop dispute resolution mechanism, integrated with new digital technologies, can improve the efficiency of cross-departmental collaboration and reduce the time it takes for domestic citizens to handle affairs.^[102] For example, the emergence of mobile micro-court applications allows parties to participate in ‘video mediation,’ auditing, and consulting services anytime and anywhere through their mobile phones.^[103]

Moreover, as a representative of a one-stop international commercial dispute resolution platform, China International Commercial Court (CICC) demonstrated its unique advantages and the benefits of the digitalization process. This phenomenon is because CICC can organically combine various dispute resolution mechanisms, such as litigation, mediation, and arbitration, and entirely use modern scientific and technological means to promote the dispute resolution process.^[104] For example, on July 21, 2021, the online version of the International Commercial Dispute Resolution Platform was launched, which enables dispute resolution procedures such as case filing, mediation, evidence exchange, and trial to be handled online.^[105]

In addition, the Supreme People’s Court has continuously expanded the list of ‘one-stop’ international commercial dispute resolution platforms, including the China International Economic and Trade Arbitration Commission and the Shanghai International Economic and Trade Arbitration Commission, and vigorously promoted the construction of information infrastructure for international commercial courts better to provide adequate services to Chinese and foreign parties.^[106]

In summary, this one-stop, digital dispute resolution mechanism has dramatically improved efficiency and convenience and laid the foundation for the future development direction of the dispute resolution mechanism.

V THE IMPACT OF THE COVID-19 PANDEMIC ON THE DIGITALIZATION OF DISPUTE RESOLUTION MECHANISMS

Firstly, online mediation is also widely used in courts, especially after the outbreak of COVID-19 in 2020, showing irreplaceable advantages. For example, between February 3 and March 31, 2020, courts across the country conducted 302,000 online mediations.^[107]This phenomenon is because, after the outbreak of the new coronavirus in China in 2020, Wuhan ordered a city lockdown for nearly two months, which resulted in strict physical isolation measures that made face-to-face dispute resolution impossible.^[108]This means that online mediation utilizes information technology, such as electronic chat software, to allow parties to complete the mediation process without needing face-to-face meetings.^[109] For example, on February 18, 2020, the Supreme People’s Court issued the the Notice on Strengthening and Regulating Online Litigation during the Prevention and Control Period of the COVID-19 pandemic, (‘Notice’)^[110] requiring courts at all levels to establish online mediation.^[111]

Furthermore, the emergence of the COVID-19 pandemic has further promoted the improvement of China's arbitration law. This phenomenon is because, although the possibility of virtual hearings exists in Arbitration Law of the People's Republic of China ^[112], which has been in place since 1994, it does not provide an apparent response to whether to force parties to conduct virtual hearings, as is done in international arbitration law.^[113]This phenomenon means that during the COVID-19 pandemic, the Supreme People’s Court issued the ‘Notice’^[114], which reflects that Chinese courts cannot enforce virtual hearings and stipulates that courts at all levels should respect the parties' right to choose how their cases are heard.^[115] For example, Article 67 of the 2019 Shenzhen Court of International Arbitration Rules states,

‘Unless otherwise agreed by the parties, the Shenzhen Court of International Arbitration or the arbitral tribunal may decide to conduct all or part of the arbitration proceedings by means of information technology.’^[116]

In addition, the emergence of the COVID-19 pandemic has accelerated the digitalization of China’s arbitration. For example, the Shanghai International Arbitration Center and the Beijing International Arbitration Center have respectively developed online platforms and systems to enable virtual hearings.^[117] This phenomenon means that the COVID-19 pandemic has promoted the gradual filling of this legal gap and further emphasized the importance of respecting the parties’ autonomy during the epidemic.

In contrast, the recognition of virtual hearings in international arbitration is also flexible and non-compulsory, respecting the parties’ autonomy. This phenomenon is because, in major international soft laws, such as the UNCITRAL Model Law on International Commercial Arbitration^[118] and the UNCITRAL Model Law on International Commercial Arbitration^[119], there are no absolute emphasis on offline hearings. This phenomenon means that the parties can decide whether to have an in-person or virtual hearing and when and where it will occur.

Moreover, international arbitration has been making virtual hearings the new normal in arbitration practice amid the COVID-19 pandemic.^[120] This phenomenon is because virtual hearings, as a mode of the digital process, resolve disputes more efficiently and economically, increase the speed of case disposal, and reduce the overall cost of arbitration proceedings for the parties.^[121] Therefore, the acceptance and practice of virtual hearings in Chinese arbitration are gradually in line with the general trend of international arbitration.

The COVID-19 pandemic has also given impetus to the digitalization of litigation proceedings.^[122] This phenomenon is because litigation activity has primarily shifted to online due to the enforced physical isolation policies in the context of the pandemic and the emphasis by Chinese authorities and leaders, such as Xi Jinping and Zhou Qiang, on the need to improve the effectiveness of ‘smart courts’ across the country.^[123] This phenomenon means that the new forms of online litigation, such as online case handling, online payment, and electronic delivery of judgments, have enabled Chinese residents to avoid close contact between people to the greatest extent possible, thereby protecting the health of citizens and reducing the number of infections among citizens to a certain extent.^[124] Therefore, these measures taken by China during the pandemic not only effectively protected the health of citizens but also promoted the digital transformation of litigation procedures.

In contrast, digital technologies such as AVL emerged earlier in international litigation proceedings, as they were initially used to supplement physical court hearings with video hearings.^[125] For example, AVL has been used in courts since 1990 against vulnerable witnesses, detainees, and expert witnesses.^[126]

With the continuous development of technology and the needs of the times, AVL has helped trials further evolve into a completely online model. For example, in 2010, the UK began implementing ‘virtual courts,’ mainly used for defendants to attend plea and sentencing hearings while in custody.^[127] This means that during the pandemic, the international litigation system has achieved a high level of maturity and stability when using online litigation.

Furthermore, courts are currently relaxing restrictions and combining online and offline formats. For example, in-person hearings can be combined with remote interactions by telephone or video and by making greater use of electronic documents and asynchronous online proceedings.^[128] Therefore, by comparison, it can be seen that the international litigation system is more mature and stable due to early digital attempts, while China needs to strengthen its efforts further to speed up the digitalization process in litigation.

VI PROSPECTS AND CHALLENGES OF DIGITAL DOMESTIC AND INTERNATIONAL DEVELOPMENT

A Analyzing the Dilemma of Digitalization from the Perspective of China and Australia

1 Dilemma from China’s Perspective

Firstly, digital convenience is a double-edged sword. Because technical glitches often accompany digitalization processes. This means that if a digital glitch occurs, it will affect the online trial process. For example, connectivity and glitches during online hearings resulted in delayed hearings.^[129] Secondly, artificial intelligence may undermine the authority of judges and lead to a decline in the quality of judgments. Because artificial intelligence is still in the category of assisting judges in deciding cases, and automated judgments will cause judges to rely too much on AI and lack independent thinking.^[130] This means that artificial intelligence with insufficient systems may lead to biased judgments, thereby affecting the quality of judgments. In addition, digitization risks data leakage, which may, in turn, violate the privacy rights of the parties involved. While Measures for Data Security Management (Draft for Comments)^[131] are designed to mitigate these risks, the actual effectiveness remains to be seen.^[132]

The emergence of ‘online’ has broken the tradition of mediation and brought challenges to mediation. Firstly, the success rate of online mediation may be reduced. This phenomenon is because there is no solemn offline mediation environment online, and the mediator and the parties to the dispute can only communicate through a screen.^[133] This means that the mediator loses the opportunity to capture the body movements of the parties and thus cannot effectively establish an emotional connection, which is not conducive to the smooth conclusion of mediation. Therefore, mediators need to be more professional and patient in order to respond to the emotions effectively and needs on the other side of the screen in online mediation, thereby increasing the success rate.

2 The Dilemma from an Australian Perspective

In contrast, the digitalization process has also brought challenges to Australian courts, such as increased costs. This phenomenon is because much electronic material is of varying quality and not in uniform formats.^[134] This means that if Australian courts want to use these materials, they must engage in additional processing and conversion work, increasing the time and resource investment in data collation and standardization. Therefore, although digital technology can improve efficiency, it also causes the court to incur more costs. Additionally, the costs involved in full electronic trials are an important factor hindering Australian courts from promoting digitalization. This phenomenon is because there are costs associated with upgrading the hardware, and there is an open question as to who will pay for installing technology in the courtroom.^[135] This means that while digital innovation can improve court efficiency, such as shortening hearing times, the additional costs are also quite expensive.^[136] Therefore, due to cost considerations, Australian courts are more restrained in promoting digitalization and the scope of application is limited. For example, Australian courts typically use fully electronic courtrooms in larger civil cases or large criminal trials.^[137]

In addition, the digitalization process will require more training and time investment for relevant Australian legal practitioners, such as judges. This phenomenon is because effectively operating a technologically advanced courtroom may require judges and staff to invest a lot of time in learning relevant professional knowledge, which may affect the efficiency of the court’s work.^[138] This means that close contact and good communication need to be maintained between the courts and law firms, and unfamiliarity with the technology will affect its application and efficiency in court.^[139] Therefore, the demand for resources and training in the digitalization process poses a challenge, increasing the difficulty of advancing this process.

Furthermore, the challenges of electronic filing are gradually emerging. This phenomenon is because Australia needs to upgrade its existing case management system to ensure that archived documents can be integrated with the court’s internal systems.^[140] This means that Australian courts need to balance cultural changes and individual working habits while upgrading their management systems to better address issues related to authentication and access to court documents. For example, ensuring the privacy and security of your files.^[141] Therefore, implementing electronic reporting requires not only technological improvements but also addressing a series of complex management and cultural issues.

B Critical Thinking on Dilemmas from Chinese and Australian Perspectives

To sum up, by analyzing the difficulties encountered by China and Australia in the process of digitalization, China needs to focus on the following issues in promoting judicial digitalization.

Firstly, in the face of technical problems that may exist in online litigation, the court may need to establish a complete technical support system, such as using 5G, to ensure the smooth progress of the online trial process to the greatest extent possible.^[142] Moreover, the courts need to act according to the law, such as ‘Notice’^[143], consider and respect the parties’ wishes, and not force the parties to participate in online trials.

Moreover, China needs to improve the use of artificial intelligence in the process of digitalization. For example, AI judges are designed to help judges manage cases rather than make judgments based on the facts of the case in order to prevent judges from relying too much on technology and losing the independence and fairness of trials.^[144]

Furthermore, based on Australia’s experience in digitalization, China’s digitalization process needs to reduce regional differences. This phenomenon is because financial issues have led to the construction of intelligent courts in economically solid eastern regions such as Beijing and Shanghai being significantly faster than in economically weaker western regions such as Qinghai and Tibet.^[145] This phenomenon means there are regional differences in the degree of digitization, and local governments with larger budgets are more likely to support technologically advanced local courts.^[146] Finally, China needs to carefully select and introduce relevant laws and regulations to constrain third-party suppliers further to avoid data leaks. This phenomenon is because legal technology companies can access large amounts of judicial data when designing courts’ products, posing information security challenges.^[147] Therefore, considering the difficulties in Australia's digitalization process, China can better cope with the challenges in the digitalization process to promote the modernization and efficiency of the judicial system.

VII CONCLUSION

In conclusion, digitalization has greatly improved the shortcomings of China’s traditional solution mechanism, thereby making it better adapt to social changes and meet the needs of the people. However, in digitalization, we still need to remain vigilant. This phenomenon is because digitalization is a double-edged sword, with benefits but also risks. For example, digitization has brought efficient processing speed to China but also brings data leakage risk. Therefore, China needs to be more cautious in the use of technology to ensure that the reform process is effective. It is hoped that China’s judicial system will become efficient and fair and meet public expectations.

^[1] Robert F Utter, ‘Dispute Resolution in China’ (1987) 62(3) Washington Law Review 383, 383.

^[2] Georgios I Zekos, Advanced Artificial Intelligence and Robo-Justice (Springer International Publishing, 2022) 285, 288.

^[3] Utter (n 1) 385.

^[4] Ibid.

^[5] Jun Ge, ‘Mediation, Arbitration and Litigation: Dispute Resolution in the People’s Republic of China’ (1996) 15(1) UCLA Pacific Basin Law Journal 122, 133.

^[6] Ibid 134.

^[7] Ibid.

^[8] Changqing Shi, Tania Sourdin and Bin Li, ‘The Smart Court - A New Pathway to Justice in China? Academic Article’ (2021) 12(1) International Journal for Court Administration 1, 4.

^[9] Ibid.

^[10] Ibid.

^[11] Huang-Chih Sung, ‘Can Online Courts Promote Access to Justice? A Case Study of the Internet Courts in China’ (2020) 39 Computer Law & Security Review 105461: 1–15, 2.

^[12] Xue Hong, ‘Online Dispute Resolution for E-Commerce in China: Present Practices and Future Developments Chinese Law’ (2004) 34(2) Hong Kong Law Journal 377, 380.

^[13] Shi, Sourdin and Li (n 8) 4.

^[14] Ibid 5.

^[15] Benjamin Minhao Chen and Zhiyu Li, ‘How Will Technology Change the Face of Chinese Justice?’ (2020) 34(1) Columbia Journal of Asian Law 1, 24.

^[16] Ibid 25.

^[17] Zekos (n 2).

^[18] Chen and Li (n 15) 29.

^[19] Shi, Sourdin and Li (n 8) 6.

^[20] Ellen Reinstein, ‘Finding a Happy Ending for Foreign Investors: The Enforcement of Arbitration Awards in the People’s Republic of China’ (2005) 16(1) Indiana International & Comparative Law Review 37, 39.

^[21] Frederick Brown and Catherine A Rogers, ‘The Role of Arbitration in Resolving Transnational Disputes: A Survey of Trends in the People’s Republic of China’ (1997) 15(2) Berkeley Journal of International Law 329, 330.

^[22] Reinstein (n 20) 41.

^[23] Gary Born and Wendy Miles, ‘Global Trends in International Arbitration’, Biblioteca Virtual (Web Page, 7^th January 2016) < https://biblioteca.cejamericas.org/handle/2015/812?show=full>.

^[24] Reinstein (n 20) 43.

^[25] Ge (n 5) 137.

^[26] Reinstein (n 20) 43.

^[27] Ge (n 5) 129.

^[28] Hong (n 12) 383.

^[29] Yeung Man Sing, ‘The CIETAC Arbitration Rules 2015’, (2015) 136 Asian Dispute Review 136, 137.

^[30] Born and Miles (n 23).

^[31] Ibid.

^[32] Jingzhou Tao and Mariana Zhong, ‘A Quick Read of the CIETAC Arbitration Rules 2015’ (2015) 31(3) Arbitration International 455, 461.

^[33] Reinstein (n 20) 47.

^[34] Ibid 68.

^[35] Ibid 46.

^[36] Ge (n 5) 123.

^[37] Xiaohua Di and Yuning Wu, ‘The Developing Trend of the People’s Mediation in China’ (2009) 42(3) Sociological Focus 228, 229.

^[38] Ge (n 5) 123.

^[39] Carrie Shu Shang and Wenli Guo, ‘Towards Online Dispute Resolution-Led Justice in China’ (2020) 7(2) International Journal of Online Dispute Resolution 119, 122.

^[40] Di and Wu (n 31) 231.

^[41] Ibid.

^[42] Ge (n 5) 127.

^[43] Di and Wu (n 37) 234.

^[44] Ibid 229.

^[45] Ibid 235.

^[46] Ibid 229.

^[47] H.L. Fu, ‘IX Shifting Landscape of Dispute Resolution in Rural China’ Implementation of Law in the People’s Republic of China 179 ,187.

^[48] Randall Peerenboom and Xin He, ‘Dispute Resolution in China: Patterns, Causes and Prognosis’ (2009) 4(1) East Asia Law Review 1, 58.

^[49] Jieren Hu and Ying Wu, ‘Source Governance of Social Disputes in China’ (2023) 55(3) Critical Asian Studies 354, 368.

^[50] Peerenboom and He (n 48) 27.

^[51] Björn Ahl, Lidong Cai and Chao Xi, ‘Data-Driven Approaches to Studying Chinese Judicial Practice: Opportunities, Challenges, and Issues’ (2019) 19(2) China Review 1, 4.

^[52] Julien Chaisse and Jamieson Kirkwood, ‘Smart Courts, Smart Contracts, and the Future of Online Dispute Resolution Essay’ (2022) 5(1) Stanford Journal of Blockchain Law & Policy 62, 70.

^[53] Meirong Guo, ‘Internet Court’s Challenges and Future in China’ (2021) 40 Computer Law & Security Review 105522: 1–13, 2.

^[54] Ibid.

^[55] Ibid 1.

^[56] Shi, Sourdin and Li (n 8) 6.

^[57] Ibid.

^[58] Ibid 7.

^[59] Ibid 8.

^[60] Ekaterina P Rusakova and Русакова Екатерина Петровна, ‘Integration of “Smart” Technologies in the Civil Proceedings of the People’s Republic of China’ (2021) 25(3) RUDN Journal of Law 622, 622.

^[61] Shi, Sourdin and Li (n 8) 7.

^[62] Rusakova and Петровна (n 60) 624.

^[63] Chen and Li (n 15) 30.

^[64] Ibid 15.

^[65] Shang and Guo (n 39) 124.

^[66] Guo (n 53) 3.

^[67] Ibid 1.

^[68] Ibid 7.

^[69] Magdalena Łągiewska, ‘The New Landscape of Arbitration in View of Digitalization’ in The Impact of Covid on International Disputes (Brill Nijhoff, 2022) 208, 212.

^[70] Zekos (n 2) 294.

^[71] Sung (n 11) 7.

^[72] Ros Macdonald and Anne Wallace, ‘Review of the Extent of Courtroom Technology in Australia’ (2004) 12(3) William & Mary Bill of Rights Journal 649, 652.

^[73] Ibid.

^[74] Ibid.

^[75] Ibid 653.

^[76] Ibid.

^[77] Jie Zheng, ‘The Recent Development of Online Arbitration Rules in China’ (2017) 26(2) Information & Communications Technology Law 135, 135.

^[78] Ibid.

^[79] Ibid 136.

^[80] Ibid 138.

^[81] Ibid 135.

^[82] Ibid 136.

^[83] Ibid 137.

^[84] Ibid 140.

^[85] Ibid.

^[86] Ibid.

^[87] Ibid 144.

^[88] Łągiewska (n 69) 215.

^[89] Ibid.

^[90] Ibid.

^[91] Jiabing Tang, ‘Perfection of Court Online Mediation System from the Perspective of Functional Orientation’ (2023) 4(1) Modern Law Research 37, 39.

^[92] 侯怀霞[Hou Huaixia] and 张西恒[Zhang Xiheng], «应持续推动我国在线调解的发展»[ The development of online mediation in our country should be promoted continuously]’ [2023] 中国法治 Chinese Rule of Law 89, 89.

^[93] Ibid 90.

^[94] Ibid.

^[95] Xiaoxiao Li, ‘The Synergistic Development of People’s Mediation and Commercial Mediation in China’ (2023) 12(1) Chinese Studies 48, 49.

^[96] Ibid.

^[97] Ibid.

^[98] Yu Zhiqiang and Dong Peiwen, ‘On Practical Exploration and Development Path of Online Dispute Resolution System’ (2019) 7(4) China Legal Science 54, 60.

^[99] Ibid 61.

^[100] Hu and Wu (n 49) 362.

^[101] Ibid.

^[102] Ibid 362.

^[103] Rusakova and Петровна (n 60) 628.

^[104] Xiangzhuang Sun, ‘The China International Commercial Court: Establishment and Development in a Global Context’ (2024) 1(1) Chinese Journal of Transnational Law 48, 53.

^[105] Ibid 54.

^[106] Ibid.

^[107] Shi, Sourdin and Li (n 8) 12.

^[108] Shang and Guo (n 39) 124.

^[109] Sarah Rudolph Cole and Kristen M Blankley, ‘Online Mediation: Where We Have Been, Where We Are Now, and Where We Should Be Symposium on Enhancing Worldwide Understanding through Online Dispute Resolution’ (2006) 38(1) University of Toledo Law Review 193, 193.

^[110] 《关于新冠肺炎疫情防控期间加强和规范在线诉讼工作的通知》[Notice on Strengthening and Regulating Online Litigation during the Prevention and Control Period of the COVID-19 pandemic] (People's Republic of China) Supreme People's Court, Order No 49, 14 February 2020 (‘Notice’).

^[111] Shang and Guo (n 39) 124.

^[112] 《中华人民共和国仲裁法》[Arbitration Law of the People's Republic of China] (the People's Republic of China) Standing Committee of the National People's Congres, Order No.31, 31 August 1994.

^[113] Lei Chen, ‘Will Virtual Hearings Remain in Post-Pandemic International Arbitration?’ (2024) 37(3) International Journal for the Semiotics of Law - Revue internationale de Sémiotique juridique 829, 835.

^[114] Notice (n 110).

^[115] Chen (n 113).

^[116] 《深圳国际仲裁院仲裁规则》 [SCIA Arbitration Rules] (People’s Republic of China) Shenzhen Courts of International Arbitration, 21 February 2019, 52.

^[117] Chen (n 113).

^[118] UNCITRAL Model Law on International Commercial Arbitration, UN GAOR, UN Doc A/40/17 (1985).

^[119] IBA Rules on the Taking of Evidence in International Arbitration (International Bar Association, 17^th December 2020).

^[120] Chen (n 113) 832.

^[121] Ibid 848.

^[122] Łągiewska (n 69) 3.

^[123] Ibid.

^[124] Ibid.

^[125] Meredith Rossner, David Tait and Martha McCurdy, ‘Justice Reimagined: Challenges and Opportunities with Implementing Virtual Courts’ (2021) 33(1) Current Issues in Criminal Justice 94, 96.

^[126] Ibid.

^[127] Ibid.

^[128] Ibid.

^[129] Shi, Sourdin and Li (n 8) 13.

^[130] Ibid 17.

^[131] «数据安全管理办法(征求意见稿)» [Measures for Data Security Management (Draft for Comments)] (People's Republic of China) Cyberspace Administration of China, 28 May 2019.

^[132] Wenli Guo and Carrie Shu Shang, ‘The Rise of Online Dispute Resolution-Led Justice in China: An Initial Look’ (2020) 1(2) ANU Journal of Law and Technology 25, 40.

^[133] Tang (n 91) 40.

^[134] Macdonald and Wallace (n 72) 655.

^[135] Ibid.

^[136] Ibid.

^[137] Ibid.

^[138] Ibid 656.

^[139] Ibid.

^[140] Ibid 657.

^[141] Ibid.

^[142] Shang and Guo (n 39) 135.

^[143] Notice (n 110).

^[144] Elena P Ermakova and Evgenia E Frolova, ‘Using Artificial Intelligence in Dispute Resolution’ in Agnessa O Inshakova and Evgenia E Frolova (eds), Smart Technologies for the Digitisation of Industry: Entrepreneurial Environment (Springer, 2022) 131, 139.

^[145] Shi, Sourdin and Li (n 8) 14.

^[146] Ibid.

^[147] Ibid 17.