ODR Is Usually Short for Online Dispute Resolution Not, As Some Assume, Online Alternative

What is ODR?

ODR is usually short for ‘online dispute resolution’ – not, as some assume, online alternative dispute resolution. It thus covers a wide range of (often theoretical) ways of resolving civil disputes online – whether they are part of, or prior to, conventional court procedures, or part of ADR procedures.

The initial impetus for ODR came from the USA, driven primarily by commercial interests – especially connected to the rise in online purchasing (in particular through eBay and PayPal). Subsequent impetus here has come from the European Commission, primarily to support a growing digital internal market. And lately a number of EU member states (notably the Netherlands, Germany and the UK) have shown more focus on ODR for domestic reasons – to reduce costs, to save court time, to increase popular access to justice, and to capture market advantage in digital sectors.

A range of ODR techniques have been suggested, although at this stage many of these remain theoretical concepts and have not yet been successfully rolled out in the field. These include:

 online ADR. This is where ADR procedures are conducted wholly or partly online – using eg email, video-conferencing or, more radically, using a digital platform. In the UK we are perceived to be progressive in this space, although there are more radical providers elsewhere – such as der Online Schlichter in Germany, which is a wholly online ADR platform. There are also online mediation and arbitration platforms such as JAMS in the USA, which allow the parties to submit all their evidence online and through which the mediator or arbitrator conducts the case.  automated negotiation. This is where the parties blind-bid through a platform, whose software proposes settlements using algorithms which take into account the bids made. An example is Smartsettle in Canada, which also has a tool for resolving insurance disputes.  crowd-sourced dispute resolution. This is where a number of peers or experts give their verdicts on a dispute through an online platform, and where the majority verdict could be binding or non-binding. The best known example of this was the eBay Community Court in the USA, which did not survive its pilot period there but which survives in the Netherlands as the Gebruikersjury.  assisted negotiation. This is where the software acts as a ‘fourth’ party (before or instead of the third party mediator) to guide the parties to a settlement based on outcomes of ‘previous cases like yours’. These have been slow to get off the ground, with early platforms like ECODIR and SquareTrade later being sidelined.  e-judge. This a broad concept whose catchy name is really a label for ODR conducted as part of the court process. At its simplest, the concept involves a judge hearing a case and issuing determinations online. More complex models suggest combining this with assisted negotiation beforehand. There are few present examples of this yet, the most noteworthy being the Rechtwijzer in the Netherlands, whose v2.0 (currently in preparation) is adding online adjudication to its present assisted mediation platform – and will operate internationally. EU ODR Regulation – a summary

The purpose of the regulation is to bolster the digital single market by giving consumers confidence that, if they purchase goods or services online, they can readily obtain redress by using an ADR entity.

The regulation comes ‘as a pair’ with the ADR Directive.

The regulation applies to domestic and cross-border disputes about online sales or service contracts brought by an EEA consumer against an EEA trader (or by a trader against a consumer, although ADR entities will be under no obligation to cover such disputes themselves).

The regulation requires the Commission to set up a user-friendly multi-lingual ‘ODR platform’ through which consumers will be able (but not obliged) to submit complaints to ADR entities. The platform will have general information about ADR, including details of all ADR entities that have been certified as complying with the directive (including data on the outcome of disputes referred to them and the average time taken).

A network of ‘ODR contact points’ in each member state will provide human back-up to the platform to assist consumers; this could (but need not) be provided by each member state’s European Consumer Centre. Current BIS plans are that the UK European Consumer Centre, which is provided by the Trading Standards Institute from its Basildon office, will provide the ODR contact points here – subject to tender.

If a complainant decides to use the ODR platform, they will fill in an electronic complaint form. The platform will then identify which ADR entities are competent to deal with the complaint and invite the respondent and complainant to agree to use a particular one, to which the complaint would then be transmitted electronically.

The ADR entity would not be required to conduct the complaint through the platform, but would have to feed back to the platform the date of the ‘conclusion if the procedure’ and its outcome. The ODR platform would seek feedback from the parties both on the performance of the platform and of the ADR entity.

On-line traders will be required to provide a link to the ODR platform on their websites, and will be required to state (including in point-of-sale e-mails) if they are committed or obliged to use a particular ADR entity.

The Commission will have to establish the ODR platform by 9 January 2016 and to test the technical functionality and user-friendliness of it by 9 January 2015.

The full text of the ODR Regulation can be found here.

Adrian Dally Financial Ombudsman Service 4th December 2014 [email protected]