KLEROS: PROVIDING THE PANACEA TO DISPUTE RESOLUTION

winningman (45)in #esteem • 6 years ago (edited)

Introduction

Where two or more people are co-existing; be it in business, relationship, school, association, family even in religious centres, misunderstanding is bound to occur one day. Dispute is an inescapable vicissitude of human-to-human relationship experience. The need therefore arises for us to find fair and subtle ways of resolving disputes whenever we encounter any especially if financial agreements or other forms of obligations are involved.

In this article, I shall explain the current method of dispute resolution and lay bare the inherent loopholes. I shall take you through Kleros, an awesome invention which provides the panacea for effective dispute resolution. I shall explore the modus operandi and other features of Kleros which includes dispute resolution mechanism, Doges on trial, the incentive system and also the overarching benefits of Kleros. We shall equally take a gander at some use cases before arriving at a conclusion.

Current State of Dispute Resolution

Here in Nigeria, and I also think in many other countries, it is a herculean task to resolve conflicts most of the times. The ubiquitous state of small-scale businesses and minor transactions compound these problems. When there is a dispute between the parties involved in these small businesses, it is often not so easy a task to find an impartial and subtle way of resolving them. This is because the transactions of these businesses most times are too infinitesimal to go to court of law when dispute arises. Judicial cases cost a lot of money and it will be foolhardy to spend more money in a dispute that the actual amount involved in the dispute.

Therefore resolving disputes bordering on medium and mini transactions have become a recurrent pain point over time.

Even disputes involving huge transactions suffer a lot of setback in the court. This is due to the protracted and slow nature of the judiciary in many countries. A lot of money is wasted in resolving these disputes too. Thus there is the need for a less financially-demanding and more efficient system.

In addition, the current state of dispute resolution is replete with corruption in some societies. Cases abound where judges and/or jurors take bribe from some parties to skew the judgement in their favour. This explains that the current system is poorly controlled.

Some freelancing websites have put in some attempts in dispute resolution. However, they are plagued by poor resolution protocols which consequently result in poor appraisal of disputes. Also, most of their assessments are done by unqualified personnel who are without much skill or knowledge of the subject matter in dispute.

This is why I strongly recommend Kleros for dispute resolution involving two or more parties.

What is Kleros?

Image Source

Kleros is an opt-in, blockchain based project that resolves dispute using same decentralization method employed in the blockchain technology.

This means that there is no central judge or juror who might be bought over or influenced by external forces.

In Kleros, adjudication is done by impartial Jurors who do not have direct physical contact with the warring parties and who cannot be influenced by outside forces as seen in centralized system of dispute resolution.

Kleros Resolution Mechanism

Kleros has subcourts which are different areas defining where a particular dispute fit into.

Source: Kleros WhitePaper

In addition, Jurors for each subcourt are experienced people in that area. This will ensure there is no technical or professional hitch in their adjudication.

When there is a dispute between two parties and they wish to resolve it in
Kleros, what they will simply do is to enter a smart contract agreement on the platform. They will select the details for integration which will include the number of jurors they want, the type of subcourt needed for the arbitration, and then possible outcome. Possible outcome simply refers to what will be acceptable to the parties. The jurors will look at these possible outcomes in making their decisions. We shall explore this later with a use case.

It is noteworthy to mention that
Kleros keeps every information private and safe. No information is published on the blockchain. In addition, Jurors are allowed access to either or both of the parties if they feel they need to extract more information to enable them make their decisions.

The platform also makes provision for appeal just like we have in our conventional courts. Any dissatisfied party can appeal and the case or dispute will be revisited by two times plus one the number of judges that adjudicated the first case.

Jurors in Kleros

From our discussion so far, you will agree with me that the efficiency of this platform to a large extent is dependent on the Jurors. This therefore underscores why emphasis should be laid on who the jurors are and how they do their job to ensure that sanity and sanctity of the system are maintained.

Kleros do not recruit Jurors arbitrarily. Every Juror in the platform deposited a pinakion (PNK) token. The higher the token deposited, the higher the chances of that individual serving as a juror. Why? This serves as a check on the part of the jurors. It ensures they remain neutral and do not show predilection to any party. Jurors whose decisions are illogical and way different from that of the others would pay part of the token deposited to the other jurors. Hence, the token serves also as a means of remuneration for the Jurors.

To further ensure the integrity of the system is not compromised, Jurors do not gather together to vote. In fact, no juror sees the decision of the others. Their decisions are revealed only after the collation of their votes.

The jurors are adequately remunerated to ensure they keep doing their jobs well. The arbitration fees provided by the warring parties when they entered the smart contract are used to achieve this.

It is also important not to forget that a juror whose judgement is inconsistent most of the times with the judgement of other jurors will lose some tokens.

Source: Kleros White paper

This is to remove bias and unprofessionalism from the system. Everyone would love to protect their money and hence would do the right thing. The system therefore is impervious to corruption.

Applications and Use Cases

Kleros can find application in almost everywhere a transaction is ongoing between two or more parties. This ranges from insurance companies, banks, online stores like Amazon, deal brokering, to even small businesses like recharge card marketing.

Let us consider two use cases.

Use Case 1:

Adams hired Josh to fix electrical appliances in his new mall across the street in Johannesburg. They agreed on a total price of $1000. Adams showed Josh specifications on the type and quality of materials to use. Josh however did not expressly comment on that. Josh insisted he must be paid complete before he do the work which Adams complied with. Upon completion, Adams was grossly dissatisfied with the work Josh did. Nothing matched with the specification he showed Josh.

On the other hand, Josh argued he never agreed with the specification Adams showed him. He said the money agreed on was too small for the specification Adams wanted. It was a tough turf!

They both heard about Kleros and opt-in. They quickly entered a smart contract agreement, choose their jurors and their outcomes as follows:

Josh repeat the job entirely without Adams giving him more money
Adams add more money for Josh so that he(Josh) would start the Job afresh.
Josh pay back Adams money and remove his materials
Adams should take the work that way.

The jurors set to work focusing on the four outcomes given above. By the end of the day, it was agreed that Adams should add more money to Josh so that Josh would repeat the work again

Use Case 2:

Iconic bank, a micro-finance bank in Lagos recently had a dispute with 'Andy Companies inc.'. The bank claims the company is owing them a certain sum which must be paid next week. The company on the other hand is pleading for extension of time as they may not be able to meet up with the deadline given by the bank.

It becomes difficult to settle the issue. The bank do not want to go to court. They heard about
Kleros and decided to opt-in.

The jurors considered the outcomes and rule that the bank pay at least half of the money at the expiration of the deadline and finish the remaining payment in three months time. Both parties admitted the decision was fair to them.

Doges: A potential use case

Uploaded on Kleros website is a Doge which is used to illustrate how Kleros works. Users can challenge whether what was uploaded is a Doge or not.

Source: Kleros Whitepaper)

The above graphics is an illustration of the decision process concerning whether Doge was uploaded or another thing. Check out how it works here

Conclusion

We started by xraying the status quo of dispute resolution in our current system. We pointed out loopholes and was able to show that Kleros can fill these loopholes.

Benefits of Kleros are many which are not limited to:

Fast and easy way of resolving dispute
Incorruptibility as it is devoid from external influences
It is way cheaper than the conventional settlement in court
Jurors judge base on the outcome giving by the parties
Secured with utmost privacy and confidentiality
There are subcourts to choose from and jurors have knowledge of the subject matter in dispute
Highly efficient and transparent

I have no doubt that Kleros is going to redefine dispute resolution in our contemporary society.