Is the future of dispute resolution online?

5 April 2018

Last month we reported on the increasing drive in English litigation towards alternative means of resolving disputes, including proposals for the increased use of Online Dispute Resolution (ODR). Now, the European Commission has published a report on the function of its online European Dispute Resolution platform, launched in January 2016. Interestingly, the report reveals that 24,000 disputes were submitted to the ODR platform in its first year of operation, with the ODR platform proving most popular in the UK and Germany.

Facilitating cross-border transactions, particularly for SMEs, and protecting consumers has become one of the European Commission’s top political priorities. The Commission considers that a key part of achieving this is ensuring that consumers and businesses are able to resolve disputes outside the formal court system by accessing Alternative Dispute Resolution (ADR) mechanisms which are fit for purpose in a world which is increasingly dependent on digital communication.

The EU’s ODR platform allows consumers to resolve disputes with traders concerning online transactions in a fast and cost effective way. The platform operates online and passes complaints to national ADR bodies. The procedure has been designed to be simple and straightforward. Electronic case management, which can be used to conduct the entire dispute resolution procedure online, is a key feature. Disputes can be submitted to and dealt with on the ODR platform in any of the EU’s official languages and a free translation service is available to users. All EU member states, except Spain, have already implemented the legal framework governing ADR and the ODR platform.

The Commission’s report reveals that during the ODR platform’s first year of operation 1.9 million people visited the ODR platform and, on average, 2,000 complaints were submitted each month. Perhaps indicative of an increasing drive towards ODR, the report reveals a gradual month on month increase over the course of the year.

However, the Commission’s analysis also shows that 85% of cases were automatically closed, without a resolution being achieved, within 30 days of submission. This suggests that whereas it may be of initial interest, the use of ODR as a successful means of dispute resolution still has some way to go. That being said, the Commission does suggest that in a proportion of the cases that had been closed after a 30 day period, settlement discussions did progress, at least to some extent, outside the ODR platform. This suggests that even when the ODR platform was not fully used to progress a complaint to its conclusion, it did play a role in bringing parties together to resolve their disputes.

In any event, although it remains to be seen whether this type of ODR will be implemented on a larger scale to encompass more complex types of commercial disputes, any attempt to modernise commercial dispute resolution can only be seen as a positive at a time when the court’s resources are more stretched than ever before.

Alice Morrissey Author
Alice Morrissey
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