The Online Dispute Settlement Form: A Brief Introduction

By Bianca Maria Leahu

Online Dispute Resolution (ODR) is a branch of dispute settlement that is applied in the field of e-commerce;[1] often it is defined as an online equivalent of Alternative Dispute Resolution (ADR).[2] This form of resolution covers disputes between Internet users[3] and makes use of various technologies and dispute resolution methods, which can vary depending on the content and size of the dispute between the parties involved.[4]

The key step development for ODR could be dated back to the eBay Pilot Project.[5] In 1999 Professor Ethan Katsh, widely recognized as one of the founders of ODR,[6] along with Professor Janet Rifkin, conducted the program for eBay which involved designing a pilot project to mediate disputes which arose out of transactions between bidders and sellers.[7]  Short after that, the interest of Professor Katsh for ODR grew and the idea that the Internet could become a “dispute resolution space”[8] led him to write one of the first books on ODR (Online Dispute Resolution: Resolving Conflicts in Cyberspace, 2001)[9] and to further help this dispute settlement mechanism to grow and develop.

However, the growth of ODR has been slow and limited, when compared with ADR, and it has faced many challenges, such as, but not limited to, lack of awareness amongst consumers and traders,  lack of trust when recurring to it to mediate a dispute and issues relating to cross-border cases. [10]

Nowadays, ODR is internationally supported by tools provided for by the European Commission and the UN Commission for International Trade Law (UNCITRAL). Indeed, the European Commission has established an European Online Dispute Resolution (ODR) platform with the aim of ‘facilitating the independent, impartial, transparent, effective, fast and fair out-of-court resolution of disputes between consumers and traders online.’[11] Whereas, UNCITRAL Working Group III (Online Dispute Resolution) drafted and finalized procedural rules for ODR; indeed, in 2016 the ‘UNICITRAL Technical Notes on Online Dispute Resolution’, a descriptive non-binding document, was published in order to offer guidelines on the online dispute resolution process.

ODR is supported by and it counts several success stories of its providers; for example, eBay and PayPal use an ODR process which resolves over 60 million disputes per year, and whereas the parties to the dispute are firstly assisted by a negotiation software in order to come to an agreement, and secondly, in the event a settlement is not reached, the claim goes to adjudication.[12]

Despite the fact that courts are starting to experiment and incorporate ODR into their judicial procedures[13] and legal frameworks are created to function as basis for ODR cases, this form of dispute settlement still remains mainly applied and used in the cyberspace.

However, during the current COVID-19 crisis, the demand for alternatives to face-to-face dispute resolution is increasing,[14] and it could potentially trigger the standpoint on ODR. Indeed, courts and practitioners might start making more use of this dispute settlement form to respond to the physical challenges that the COVID-19 health crisis poses to the justice system.[15] Lastly, the current circumstances force and justify us to think differently,[16] therefore, regardless of any reluctance and scepticism around it, ODR might become the new “normal” mean of dispute settlement.

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[1] Pablo Cortés, ‘What should the ideal ODR system for e-commerce consumers look like?’ (2011) Centre for Socio-Legal Studies Oxford < https://www.law.ox.ac.uk/sites/files/oxlaw/dr_pablo_cortes.pdf> accessed 13 November 2020

[2] Arthur M. Monty Ahalt, ‘What You Should Know About Online Dispute Resolution’ (2009) < https://www.virtualcourthouse.com/index.cfm/feature/1_7/what-you-should-know-about-online-dispute-resolution.cfm > accessed 13 November 2020

[3] Pablo Cortés, ‘What should the ideal ODR system for e-commerce consumers look like?’ (2011) Centre for Socio-Legal Studies Oxford < https://www.law.ox.ac.uk/sites/files/oxlaw/dr_pablo_cortes.pdf> accessed 13 November 2020

[4] Resolution Systems Institute, ‘Online Dispute Resolution’ <https://www.aboutrsi.org/special-topics/online-dispute-resolution> accessed 13 November 2020

[5] Resolution Systems Institute, ‘Online Dispute Resolution’ <https://www.aboutrsi.org/special-topics/online-dispute-resolution> accessed 13 November 2020

[6] National Center for Technology and Dispute Resolution, ‘About Ethan Katsh, Director’ < http://odr.info/ethan-katsh/> accessed 13 November 2020

[7] Ethan Katsh, ‘Online Dispure Resolution: The Next Phase’ (2002) 7(2) Lex Electronica <http://www.lex-electronica.org/articles/v7-2/katsh.htm> accessed 13 November 2020

[8] Ethan Katsh, ‘Online Dispure Resolution: The Next Phase’ (2002) 7(2) Lex Electronica <http://www.lex-electronica.org/articles/v7-2/katsh.htm> accessed 13 November 2020

[9] National Center for Technology and Dispute Resolution, ‘About Ethan Katsh, Director’ < http://odr.info/ethan-katsh/> accessed 13 November 2020

[10] Pablo Cortés, ‘What should the ideal ODR system for e-commerce consumers look like?’ (2011) Centre for Socio-Legal Studies Oxford < https://www.law.ox.ac.uk/sites/files/oxlaw/dr_pablo_cortes.pdf> accessed 13 November 2020

[11] Regulation (EU) 524/2013 of 21 May 2013 on online dispute resolution for consumer disputes and amending Regulation (EC) No 2006/2004 and Directive 2009/22/EC (Regulation on consumer ODR) OJ L165/1 Article 1

[12] Pablo Cortés, ‘What should the ideal ODR system for e-commerce consumers look like?’ (2011) Centre for Socio-Legal Studies Oxford < https://www.law.ox.ac.uk/sites/files/oxlaw/dr_pablo_cortes.pdf> accessed 13 November 2020

[13] Resolution Systems Institute, ‘Online Dispute Resolution’ <https://www.aboutrsi.org/special-topics/online-dispute-resolution> accessed 13 November 2020

[14] Law Society of Scotland, ‘Specialists team up to launch online resolution service’ (2020) < https://www.lawscot.org.uk/news-and-events/legal-news/specialists-team-up-to-launch-online-resolution-service/ > accessed 18 November 2020

[15] Nathan Moshinsky, ‘COVID-19 and the impact on our Courts: will there be a ‘new normal’ in 2020?’ (2020) LexisNexis < https://www.lexisnexis.com.au/en/COVID19/blogs-and-articles/federal-supreme-high-court-rules-impact-of-coronavirus-covid-19-in-2020 > accessed 18 November 2020

[16] Mirèze Philippe, ‘Offline or Online? Virtual Hearings or ODR?’ (2020) Kluwer Arbitration Blog < http://arbitrationblog.kluwerarbitration.com/2020/04/26/offline-or-online-virtual-hearings-or-odr/ > accessed 18 November 2020