“We can’t solve problems with the same thinking we created them.” – Albert Einstein
A college friend, who was a tenant at a home-solutions company, recently made an online transaction to pay his monthly rent. The amount was debited from his account but wasn’t credited to the company’s account. For technical reasons, the transaction failed, but the bank notified the tenant via SMS that the transaction was successful. With both parties unaware of this technical glitch, the company charged the tenant an interest on the unpaid rent. Shocked and annoyed, my friend felt helpless at first, as the rent amount was not large enough to pursue legal action. Upon deliberation and keeping his lawyer ego at bay, my friend decided to opt for Online Dispute Resolution (ODR) as provided in the tenancy contract.
Considering the settlement was achieved within 30 days and is legally binding, my friend rightly concluded it was a wise choice to make. ODR is simply the use of technology and internet to foster effective and efficient access to dispute resolution processes, such as negotiation, mediation or other forms of early dispute resolution.
In the early 1990s, there was an increase in cross border disputes due to the rise in electronic transactions. Numerous small claims arose but raising a dispute for such meagre amount was an expensive process. ODR emerged amidst the process of discovering an efficient solution to resolve internet-related disputes. Virtual Magistrate at Villanova University, Online Mediation Project at the University of Maryland, and the Online Ombud’s Office at the University of Massachusetts were the first few initiatives aimed at managing disputes online.
The first structured large-scale adoption of ODR was done by eBay, in the early 2000s, to resolve disputes arising on its digital platform. The eBay Resolution Centre, resolves an enormous amount of over 60 million disputes per year, making it one of the most significant ODR systems in the world. One great advantage of this progress is that a vast amount of cases do not escalate to a level where a third party is needed to render a decision. This extrajudicial process resulted in 90% of the cases resolved without court intervention.
For long, parties faced difficulty in selecting the right mediator to facilitate the mediation process. Even after successful outcomes, the process faced much hesitation as parties found it difficult to find a neutral, reliable and skilled mediator due to the lack of information on mediators. Unlike the court system where the judge is the guarantor of such qualities. ODR mechanism offers a solution to this enigma by allowing mediator/s residing all over the globe to connect and conduct sessions over the internet.
A complicated dispute allows parties to appoint two or more mediators holding expertise in different fields and this privilege is further enhanced in ODR, as you can have domain experts and process experts from different parts of the world under the same platform. This collective synergy can counsel the parties to view conflicting issues from different perspectives. An online platform allows for more resources within the limited economical resources.
In light of the COVID-19 outbreak, it has become challenging for the courts to function. In India alone, there is a huge pendency of over 45 lakh cases before the High Court and 60,000 cases before the Supreme Court. Amidst the lockdown, there are numerous fresh cases alleging competition law violation, employer-employee disputes, telemedicine law adherence, e-commerce disputes, insurance claims, all awaiting adjudication. Due to lack of technical advancements in courts, and fear of the spread of the Coronavirus, the courts strenuously have to function selectively by listing only ‘urgent matters’. Thus, the courts will be flooded with new litigation matters upon lifting of the lockdown.
In these dire times, courts should direct all consumer, trade, e-commerce, commercial, labour and employment, and digital payment-related disputes, and petty civil cases to be resolved via ODR. Using technologies such as Skype, Cisco WebEx, Google Meet, or any other viable video conferencing app, parties can resolve their conflict from home or any other place of convenience, without stepping out on the roads. Further, ODR is economical, time-efficient, and allows engagement of experts, residing cross border, for facilitating the parties at reaching a win-win situation.
The EU has an ODR platform that allows EU consumers and traders to solve disputes for online purchases in a simple, fast and affordable way. This keeps the dispute from having to be settled in court, which is beneficial for consumers, traders and more cost-effective for Alternative Dispute Resolution (ADR) bodies across the Member States. It is believed this could save EU consumers EUR 11.7 billion each year.
China has been improving and promoting ODR since early December 2019. Awaken by the terrifying impacts of the health crisis, it has issued a white paper outlining a strategy to develop “internet judiciary”. China has also recommended the enhancement of the court’s online mediation platform, which has resolved over 1 million disputes since 2016.
Success stories in India are not too hard to find, if sought with optimism. A prominent moment for mediation was when a ten-year-long dispute found resolution in three days. Mathew Chandy, MD of Duroflex, who witnessed the mediation process wrap up mid-week, was quick to point out mediation led to the quick recovery of the business and avoided damning losses.
India has several ODR platforms successfully assisting people in resolving their disputes online. To name a few:
Research has shown that there is an increase in the number of cases adopting mediation as a mode of dispute resolution for arriving at a positive outcome. Further, due to technology intervention, time for resolving disputes have reduced to as much as one-tenth in certain instances. In times of necessity, adopting old mechanisms do not enhance the situation. With the number of activities taking place online, small and large disputes’ resolution can take place online.