Legal mechanisms to enforce compliance for blockchain based dispute resolution do not yet exist and will likely remain speculative for some time. However, in our media powered era of instantaneous, global information, the most actionable lever for blockchain dispute resolution is reputation. Now organizations and individual users can take advantage of BANKEX Smart Justice for a fast, unbiased resolution to a dispute that not only saves time and money but offers a decisive advantage in managing reputation.

It the job of mass media to inform the public about unfairness and danger, but brands are rightly concerned about their portrayal in the media as news organizations tend to favor unilateral narratives concentrating on sensational and emotional aspects of events rather seeking balance or objective information. In today’s world of social media, reputation is more critical than ever and yet at the same time it is increasingly vulnerable. Premature and biased conclusions projected on social media have ruined careers and the reputation of corporations. The importance of protecting corporate reputation against fast-moving, reactionary bloggers and social media outlets and the viral nature of negative news on the Internet will only increase as social media increases its dominance.

Guilt vs. Damage Control

At the same time, organizations are not powerless to show their side of a story. They can disclose vital details, take action and provide information that might ultimately provide a more balanced version of any event. Johnson & Johnson’s quick response to Tylenol tampering crisis that resulted in 7 fatalities in the 1980’s not only saved lives, but it also kept their reputation. The consumer product company’s worst nightmare nevertheless cost the company several hundred million dollars in recalled products and PR efforts and took years to recover fully. Legal decisions can be an authoritative force demonstrating proper behavior and fortifying brands in adversity, but litigation is expensive and, more significantly, retroactive. Even a positive outcome of litigation takes time and may come too late to help a company recover the effects of slander and false accusation. When a reputation can be ruined in a moment, time is of the essence. The viral nature of negative news means organizations need faster, preventative tools for reputation management.

The tragic events and quick thinking that enabled Johnson & Johnson to take action and emerge with a reputation as a truly caring company ready to respond are from the past. In our environment of negative news spreading at the speed of light and reactionary self-styled experts feeding on likes by expressing their biased views to the public, Johnson & Johnson may not have fared as well. Instead of becoming a hero to the community for its selfless actions, the company’s market share would have likely been taken over by other players who were simply lucky not to have faced such a challenge. Without recourse to a means of rapid response, a company’s chances for surviving such an ordeal are low. Consumers don’t have time to wait and see what will happen and the competition is far to high.

BANKEX Smart Justice, however, would give organizations facing disputes a fighting chance to turn the situation around a U-turn if the case was brought to BANKEX Smart Justice.

The Devil’s in the Details

It is clearly evident early on that the Tylenol crisis was not Johnson & Johnson’s fault. Their reaction, however, was critical. Their approach to reputation management bears further examination.

After the crisis, Johnson & Johnson re-introduced Tylenol products in triple-seal tamper-resistant packaging, the first pharma company to comply with the new Food and Drug Administration mandate for tamper-resistant packaging that came about directly as a result of the crisis. Furthermore, they promoted more tamper resistant caplets and offered coupons for discounts on the purchase of their product available in newspapers as well as by calling a toll-free number. Johnson & Johnson ‘s shareholders were hurt only briefly, and the stock recovered only two months later.

Not every company has a quick-witted, talented PR team as Johnson & Johnson. There was no ‘fair because for the company’s shareholders to respond to the panic and to give consumers discounts on a newly launched product to satisfy irrational consumer opinion about the company.

Deflecting the Reputational Lynch Mob

Today, to find out whether Tylenol is a drug the public needs to be wary of, the Food and Drug Administration could initiate a new case using BANKEX Smart Justice. The Food and Drug Administration, as an applicant, would describe the nature of the dispute from their point of view and define the punitive action commensurate with the alleged misconduct.

After receiving a notification, Johnson & Johnson would have an opportunity to explain in detail its point of view — either to deny or proposing measures to resolve the issue before the story went public and the company had to navigate self-proclaimed experts and pundits in the far more biased court of public opinion. In such circumstances, Johnson & Johnson, a company ready and eager to address the issue of potential danger as a result of using their product, might have only had to recall the drug in the Chicago area instead of nationwide and would have saved hundreds of million dollars and the reputation that was so difficult to rehabilitate. Learning about the event from Johnson & Johnson instead of in the news, stakeholders might not have felt the pain of volatility as the case was not directly related to the drug itself. Finally, with an early focus on the perpetrator, the authorities might have acted sooner, and the company could have avoided the risky strategy of offering ordinary people a $100,000 reward for information leading to his arrest.

All the “what if” contingencies aside, whatever might have happened, with BANKEX Smart Justice, the wave of irrational public opinion would never have reached Johnson & Johnson before the details were clarified with a legal, out of court system blockchain arbitration.

Humans and Moral Dilemmas

Even when all the details of a given case are available, and all the sides have presented their point of view, certain moral aspects are challenging for judges and juries in a real court of law. Will judges interpret laws in light of moral values and principles, are laws binding if they do not reflect moral principles, and is it morally justifiable to disobey bad laws? What gives law its authority? These are all difficult human questions. The verdict in a given case often depends on a particular judge, their values, previous experience, and personal interpretation of the law.

In contrast, the Law of Large Numbers offers a mathematical approach to decision making that relies on large numbers of decision makers augmented by the laws of probability. Mathematical theorists have been aware of this approach to dispute resolution for a long time, but it hasn’t been until the advent of the internet and practical possibility of quickly assembling a large group of random, impartial arbitrators that this has become feasible. What’s more, with blockchain based arbitration, this approach to dispute resolution has not only become possible, but practical. Blockchain not only offers transparency and an immutable record of events, but it also includes mechanisms for vetting of arbitrators, secure voting, and incentives for participation that ensure objectivity. BANKEX Smart Justice relies on 51 arbiters and a quorum of at least 29 votes in favor of one of the parties in any dispute. This math bases approach is an ideal mechanism to smooth out subjective values and random outliers that cloud litigation and other forms of offline decision making.

True Equality between Small and Large

With the increasing importance of user reputation in the online world, the preservation and enhancement of reputation become the most actionable lever for blockchain-bases dispute resolution. The trend for online reputation to affect offline reputation is also on the rise. Reputation is a highly valued quality in today’s brand-conscious world of networking for global commerce and even more critical in the decentralized sphere where it is impossible to conceal necessary actions performed on the blockchain. Perhaps most importantly, the environment of online reputation offers a level playing field for both large and small entries, for individuals and organizations. The relative size and status of any entity are less important than their reputation.

Johnson & Johnson is one of the thousands of companies who have faced a crisis that would have been the end of the company if not handled properly. When Coca-Cola met a similar health scare crisis in 1999, Nick Purdom of PR Week observed critically that “…the PR industry has an important role to play in helping companies identify and manage risks that could damage their reputation.” Major corporations such as Exxon, Toyota and 21st Century Fox faced crises and were not as successful in emerging with their reputations intact. With BANKEX Smart Justice, organizations will not have to rely so heavily on the PR industry to accomplish a Sisyphean task of resurrecting a damaged reputation.

More than just resolving disputes, Smart Justice offers incentives for both an open and honest approach to conducting business and faster, more effective means of reputation management for individuals and businesses willing to address a breach of contract issues amicably and out of court with less chaos and greater possibilities for improved cooperation and lower risks to reputation. The permanent, immutable nature of blockchain encourages accountability and reconciliation as opposed to media spin and litigation. When any user can have a full view of a company’s reputation and the outcomes about even the most insignificant dispute and, perhaps more importantly, how a company reacts objective assessment of its actions, its own mistakes and its treatment of others in transactions — this will determine a company’s business behavior. Reputation, in turn, will become the currency of the future.

Smart Justice for the Future

Addressing disputes with litigation is still a long, expensive, and emotionally taxing procedure. This is why people prefer to go to arbitration or mediation whenever possible. However, even arbitration is still far from ideal, as it inevitably involves human factors that in some cases lead to corruption and miscarriages of justice. While courts will remain indispensable for managing many civil and criminal cases, BANKEX Smart Justice will bring the precision of math and high technology to business arbitration and contribute to social order with the impartial and unmistakable justice of blockchain. This will relieve courts of cases that can be resolved impartially, amicably and cost-effectively on blockchain and reduce cases of false accusation, avoiding accountability with spin and mob justice in the court of public opinion to the past.