All good questions mateโฆ
You are quite right that some disputes canโt be proved ie where the vendor insists they sent it and you insist you didnโt get it. Others are obviously โfraudulentโ ie where the vendor has disappeared from the site leaving multiple orders unsent.
In the first case, LB uses an algorithm to provide auto settlement. It works on โreputationโ of each party which is built up based on length of time here, number of buys/sales, voting history, number of disputes etc. It works like this because there is no proof either way but also it is far too easy to open new accounts to make false claims.
It then calculates a percentage refund.
In cases of fraud, LB pays out 100% refunds.
LB will investigate to a certain point. For example where you are trying to contact a vendor to agree a resolution, but dispute because they wonโt answer you then LB will encourage both parties to find a resolution.
And thatโs the point really- good comms solves everything and most disputes get settled between the buyer and seller (or the post delayed package finally arrives!). The dispute process protects your coin whilst you are communicating (the funds remain in escrow through this period) and itโs the reason LB works because you can order from a large range of sellers with a good degree of confidence.
Itโs not a perfect system, an innocent noob for example might be unhappy with only a % refund, but when you consider what it is we are buying itโs pretty bloody marvellous! ๐คฉ
