Online Dispute Resolution

By- Vinesh Chaudhary, BA.LLB(H)

NALSAR, Hyderabad

INTRODUCTION

“Use of modern innovations and technology needs to be considered not only for paperless courts but also to reduce overcrowding of courts. There appears to be a need to consider categories of cases which can be partly or entirely concluded “online” without physical presence of the parties by simplifying procedures where seriously disputed questions are not required to be adjudicated.”

Online dispute resolution (ODR) is a branch of dispute resolution which uses technology (electronic communications and various information and communication technology) to facilitate the resolution of disputes between parties. ODR is a different medium to resolve disputes, from beginning to end, respecting due process principles.[1] The objective of ODR is to bring the gains of efficiency, cost-effectiveness, and convenience that technology has brought to so many sectors into the domains of resolution and justice delivery. There are various cases where ODR has been widely practiced like internal dispute management systems of businesses, electronic forms of alternative dispute resolution and online courts.[2]

There have essentially been four phases in the development of online dispute resolution (ODR).[3] The first phase beginning from 1990 to 1996 was an amateur stage in which electronic solutions were in a test period. In the following years (1997–1998), ODR developed at a dynamic rate and the first commercial web portals were established to provide service in this particular field. The next phase ran from 1999 to 2000. Given the favorable period of economic development, especially in IT services, many companies initiated projects based on electronic dispute resolution, but a large number no longer operate on the market. The year 2001 marked the beginning of the phase during which ODR techniques were introduced into institutions such as the courts and administration authorities.[4]

ODR was born from the synergy between ADR and Information and Communication

Technology, as a method for resolving disputes without being in proximity of each other making it accessible for more people, and for which traditional means of dispute resolution were inefficient or unavailable.[5] Some experts have defined ODR exclusively as the use of ADR assisted principally with Information and Communication tools.

The ODR has definitely grown and is giving all the ADR offices on the web, so any individual can resolve the disputes by sitting at their home through online platforms. It is assisting the people with engaging them in the online business and the disputes which are being made through online dispute resolution framework are likewise being settled on the internet. This is the new period of the legal system where the questions are being settled on the online platforms and through various elective methods and not through prosecution or traditional litigation processes.

METHODS

a)  Automated negotiation-

This negotiation process is designed to deal with economic settlements for claims ion which liability is not challenged. This may be thought of as a type of auction mechanism where some or all information about the bids is hidden. A resolution is declared by the system at the end of a negotiating session if all parties have accepted one or more packages proposed during the session. It is also a valuable tool for lawyers because they too can use it without revealing what they’re willing to accept and more importantly, without waiving their right to access the court.[6] Thus, ODR is useful for resolving disputes that arise in businesses, insurance companies who are finding that ODR saves them money and time when dealing with the disputes.

b)  Assisted negotiation

In this method of negotiation the technology assists the negotiation process between the parties. The role of the technology is to provide a certain process or to provide the parties with specific advice. These negotiation procedures are designed to improve communications between the parties through the assistance of a third party or software. It has also been argued that assisted negotiation, conciliation, and even facilitation, are just synonyms of mediation. There are various advantages of these processes, when used online, are their informality and user friendliness.[7]

c)  Expedient Non-Adjudicative Online Resolution

Expedient Non-Adjudicative Online Resolution is mostly utilized in cases that might otherwise be heard in small claims or very limited civil matters. By avoiding adjudication of court, expedient non-adjudicative online resolution saves litigants time in court while protecting each from ancillary damage: The winning party collects more of the disputed amount and the losing party suffers no damage from having a judgment entered against him.

d)  Crowd justice

It is an alternative to private, professional settlement. This concept of crowd justice has recently taken shape as a means to leverage social norms.[8]

THE PROCESS

Choosing an ODR Provider is the first step to be completed by the parties to the dispute.

  •         Preparation for ODR- It is important that the parties are aware of the rules that they will need to follow, and have gathered the necessary facts and/or documents to support their position.
  •         The ODR Process- It depends solely on the rules of the ODR Provider, and whether or not the ODR component will take place at the mediation. Generally, the ODR process will begin with contacting the other party to resolve the dispute, either directly or through the neutral party.
  •         As with other dispute resolution processes, parties should consider the following:
  • “What are the parties’ interests, not just their position? Is there a solution that will create a win-win outcome or that mutually benefits both parties? Effective communication is important. As much, although not necessarily all of the communication between the parties is in writing, carefully consider the choice of words and the tone of any written submissions.”[9] Where necessary, draw the attention to the ODR Provider or ODR Neutral to perceived communication difficulties. Evaluate any proposals in light of your BATNA. The BATNA is “the standard against which any proposed agreement should be measured.  It is the best of all possible alternatives to the ODR process should the latter fail. Any solution should be superior to your BATNA. Consider the cost-benefit analysis of continuing in the ODR forum.[10]

ATTRIBUTES & PERQUISITES

ODR has a plethora of advantages when compared to the traditional court and cumbersome process of litigation. It leads to efficient time management by cancelling out the time required for travelling and also the time spent in the process of litigation. It also substantially reduces costs as a result of the same. It ensures speedy access to justice.  ODR can be accessed from anywhere in the world without any geographical limitation acting as a barrier. The outcome of the whole process rests in the hands of the parties involved and not in the hands of any third party. The tone and set up of the entire proceeding is informal and casual as against ADR proceedings such as mediation or arbitration. Until and unless agreed by the parties, the entire process of ODR is strictly confidential.[11] Mediation procedures are adaptable and easy to understand. People are urged to determine questions themselves without response to attorneys. It is a willful procedure, which takes into account extra and more formal conflict resolution instruments. Mediation encourages settlements without harming connections. It looks for win-win arrangements, where all disputes are fulfilled by the result. There is a more extensive scope of settlement choices.[12] Cost-savings resulting from a lack of need for the presence of a professional personnel or the delivery of documents are also important. Moreover, online mediation allows the whole process to be registered, and therefore to be replayed. The main feature that distinguishes classic ADR from the online type is the aforementioned location of mediation proceedings. [13]

Challenges in Implementation of ODR

The first challenge is the usage of language in the ODR platforms. Presently most of the existing ODR services use only the English language, which can be another difficulty in expressing accurate information and avoiding miscommunications. Language is a barrier not just for those parties who do not speak the language but also for those parties who use it as a second or third language. ODR with text based mediation, negotiation and arbitration makes it easy for the mediator to communicate with the parties as the parties can take time and assess what the mediator/arbitrator/negotiator is trying to convey which the offline mode usually lacks. The consultation with experts is also facilitated by ODR for effective communication but language understanding plays a huge role due to the need for communication through texts. Removing this language as a barrier for effective communication is a real challenge to promote ODR to various parts of the world. Parties with difficulties in communicating or language in writing may be at a disadvantage in an ODR process.

All parties would be required to have adequate technology to participate in an ODR Process. Parties without adequate technology may be at a disadvantage or unable to fully participate. ODR is a less personal form of dispute resolution as the parties are not in the same room, and often all of the discussions are in writing.[14] Online dispute resolution offers a wide range of implementation methods and is getting popular in the fields of consumer and family law. However, many complex legal issues, such as classifying violations or legal liability, cannot be resolved through online dispute resolution. A lack of direct contact in the course of mediation does not favor the creation of trust, which is the basis for trying to resolve a claim by using any out-of-court processes.

ODR in India

Online dispute resolution (ODR) in India is in its infant stage and it is gaining prominence significantly. Even on a conjoint reading of the provisions of the Indian Evidence Act, 1872, the Arbitration and Conciliation Act, 1996 and the Information Technology Act, 2000, it is evident that the Indian laws provide for legality and technical viability of the ODR mechanisms.  With the enactment of the Information Technology Act, 2000 in India, e-governance has been given legal recognition in India. With a rapid growth of e-commerce in India, the number of disputes related to online transactions is on the rise. Conventional systems of dispute resolution require presence of the parties, and are not in sync with the modern online platforms. The Government of India has taken note of this and has planned to roll out an Online Consumer Dispute Resolution platform that follows the best practices emerging in the arena of global e-Commerce.

As per the ODR Handbook, the number of ODR start-ups has grown from 3 in 2018 to 13 by mid 2020.[15] This includes operators like Presolv360, Centre for Online Resolution of Disputes and SAMA that are directly involved in delivering online arbitration and mediation services. The COVID-19 situation has created an impetus for institutional adoption through online filings, electronic court hearings and organizations shifting to online modes for their work.  

Recently, the Supreme Court of India in a suo motu writ petition captioned ‘Expeditious trial of cases under Section 138 of N. I. Act, 1881, took note of the observations in Meters and Instruments Private Limited & Anr. v. Kanchan Mehta[16], that

“Use of modern technology needs to be considered not only for paperless courts but also to reduce overcrowding of courts. There appears to be a need to consider categories of cases which can be partly or entirely concluded “online” without physical presence of the parties by simplifying procedures where seriously disputed questions are not required to be adjudicated.”

It is of extreme importance to note that on an average every judge in India is allocated 1,350 cases, whereas the counterpart in the USA has to deal with only 388 cases.[17] Therefore, enhancement of a technology driven dispute resolution mechanism not only seems promising for the lawyers but would also lead to substantial easing of courts’ burden as well as improving the efficiency of the Indian legal ecosystem and making justice accessible to more and more people.

ODR also has a good environmental impact – 11 billion sheets of paper are used every year in Indian courts. The green cost of this usage is 1.3 million trees and 109 billion liters of water every single year. A transition to digital platform would also benefit the environment, make our judicial and extra judicial system more eco-friendly, thereby, helping to curb the climate changes issues.[18]

ODR Issues in India

The reality of India’s digital divide, which spans across issues of connectivity, availability, digital literacy and social norms. A combination of these factors ends up generating varying levels of digital adoption across demographic groups. There are significant challenges which the ODR faces in its way of growth in India like the lack of human interaction and communication, lack of literacy, inadequate confidentiality and secrecy, lack of trust, cultural, educational and language barriers, limited range of disputes negative mindset of lawyers and the most crucial and pivotal challenge being the admissibility of ODR.[19] NITI Aayog in its draft report suggests that ODR should be controlled by the government to an extent. It makes a case for the government’s role in developing a platform using technology that will allow for the development of private sector services relying on government led free and open source systems. [20] India is a heterogeneous and diverse state, and even if an efficient state-run planning process is able to emerge with sound designs, that might only cover a small fraction of the situations which arise in the field.

CONCLUSION

There are several challenges which are to be overcome in order to promote and mainstream the process of ODR. The main challenge for constructing an ODR platform is to meet the requirements of effective communication, as discussed above about the problems of language and it is very well known that effective communication leads to amicable settlement which in turn leads to restoration of relationships which is a win-win for the parties involved. The need of the hour is to maximize the reach of the justice delivery system to all the sections of the society. A good infrastructure for easy access and for ensuring that justice must be delivered in minimal time and in an adequate manner by increasing literacy rate, reducing language and cultural barriers, and easy access to e-courts might be the stepping stone towards achievement of the goal. Thus, the step to advance ODR is a key to facilitating global harmony and to encouraging international relationships in cross-border disputes. Moreover, considering the times of pandemic that we are living in today, the option of ODR has just become more compelling, safe and cost efficient.[21]

Empirical research on ODR indicates that they are most efficient for disputes with a low level of complexity. Legal relationships between conflicting parties with a specific character and type of dispute and on the basis of clear provisions might be subjected to the ODR techniques. It is necessary to create a legal framework involving electronic tools, such as online platforms and Internet portals that enable the automatic resolution of disputes without the need for legal classification, time-consuming hearings to build trust and save time of the parties to the dispute.

The idea of out-of-court dispute settlement is not new, and ODR is only the most recent in a long tradition of dispute resolution out-of-court. As a result, ODR is a legitimate solution for resolving disputes in the modern world especially due to the outbreak of pandemic which has forced people to stay at their homes. ODR provides numerous opportunities in the legal world.

“ODR might not have taken over the world the first time around but technology has gotten to the point where it just doesn’t make sense to not use the Web to handle more disputes.”[22]

 

 

 

REFERENCES

[1] J. A. García Álvaro, “Online Dispute Resolution Uncharted Territory” (2003) 7 The Vindobona Journal of International Commercial Law and Arbitration P. 180.

[2] E. Katsh and Wing, “Ten Years of Online Dispute Resolution (ODR): Looking at the Past and Constructing the Future” 38 (2006) U. Tol. L. Rev. p. 31.

[3] Tyler, M. C. (2003). Seventy­six and counting: An analysis of ODR sites. In Lodder, A. R., Clark, E., Gordon, T. F., Katsh E., Rule, C., Thiessen, E. M., Verheij, B., Walton, D. N, & Zeleznikow, J., Essays on legal en technical aspects of Online Dispute Resolution, (pp. 13–29).

[4] D.R. Johnson, D.G. Post Law and borders: The rise of law in cyberspace, Stanford Law Review, 48 (1996), pp 13-67.

[5] E. Katsh, and J. Rifkin, J. Online Dispute Resolution: Resolving Conflicts in Cyberspace

[6] D. Larson, “Artificial Intelligence: Robots, Avatars, and the Demise of the Human Mediator”, Ohio State Journal on Dispute Resolution [Vol. 25:1 2010]

[7] P. Jacobs “Mediation Now and Then” in M. P. Barbee, Newsletter, Mediation, International Bar Association Legal Practice Division, July 2007, p.14.

[8] Surowiecki, James (2005). The Wisdom of Crowds. Anchor Books. pp. xv. ISBN 0-385-72170-6.

[9] Fisher, R., Ury, W. and Patton, B. (1991). Getting to Yes: negotiating Agreement Without Giving In. Second Edition. New York: Penguin Books, at 100.

[10] American Bar Association Task Force on E-Commerce and ADR, “Addressing Disputes in Electronic Commerce,” online: American Bar Association at 27.

[11] Jim Melamed, The Internet and Divorce Mediation, available at: http://www.mediate.com/articles/melamed9.cfm.

[12] Professor Fred Galves, “ Virtual Justice as Reality: Making the Resolution of Ecommerce Disputes More Convenient , Legitimate, Efficient and Secure” (2009) (1) Journal of Law, Technology and policy.

[13] Hopt, K. J., & Steffek, F. (2013). Mediation: Principles and regulation in comparative perspective. Oxford: Oxford University Press.

[14] Richard H. McLaren; John P. Sanderson, Innovative Dispute Resolution – The Alternative, Toronto: Carswell (Thomson Canada Ltd.), 1994, p. 3-3.

[15] ODR Handbook, 2021: NITI Aayog, Agami, Omidyar Network India, Ashoka, ICICI Bank, Trilegal, Dalberg, Dvara Research, NIPFP and Cracker & Rush, Online Dispute Resolution: Shifting from Disputes to Resolutions, April, 2021.

[16] 2017 TaxPub (CL) 0840 (SC)

[17] https://www.theleaflet.in/what-does-data-on-pendency-of-cases-in-indian-courts-tell-us/.

[18] https://www.barandbench.com/columns/online-dispute-resolution-a-possible-cure-to-the-virus-plaguing-the-justice-delivery-system.

[19] . http://www.legalserviceindia.com/legal/article-839-online-dispute-resolution-mechanism-prospects-and-challenges-in-india.html.

[20] NITI Aayog, 2020: The NITI Aayog Expert Committee on ODR, Designing the Future of Dispute Resolution: The ODR Policy Plan for India, October, 2020.

[21] Kinhal et al, 2020: Deepika Kinhal, Tarika Jain, Vaidehi Misra & Aditya Ranjan, ODR: The Future of Dispute Resolution in India, Vidhi Cenre for Legal Policy, July 2020.

[22] KRAUSE, JASON. “SETTLING IT ON THE WEB: New Technology, Lower Costs Enable Growth of Online Dispute Resolution.” ABA Journal, vol. 93, no. 10, 2007, pp. 42–46. JSTOR, www.jstor.org/stable/27846573. Accessed 7 June 2021.

 

 

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