Online Dispute Resolution: The Future of Dispute Resolution – Biodun Ogunnubi

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Are you aware that you do not have to wait till the lock down is over to have that dispute resolved?

In the age of globalization, when the world is indeed a global village and information of any kind is only a click away on the internet, one wonders why dispute resolution is still tied to the traditional settings of either the 4 walls of a court room or arbitration tribunals in most places.

With a third of the world population[1] on some form of lockdown in the global fight against COVID19[2] as at April 3, 2020. While citizens in countries where lockdown, that is, countries where movement is restricted or controlled by government, await resumption of normal activities. Some business relationships have turned sour due to vitiation of contracts on the basis of frustration, non-compliance with terms of business agreement, amongst others as a result of the COVID19 lockdown. Whilst some hope that upon the ban on movement being lifted the Court or an Arbitrator would interpret contractual documents or award damages in its favour, others have engaged the services of lawyers to submit legal opinions on the effect of COVID19 as a force majeure on extant contractual agreements. Unfortunately, only a few are aware of the option of Online Dispute Resolution (ODR), that from the comfort of their offices or homes they can have their disputes resolved without resorting to the traditional court hearings quickly and inexpensively.

WHAT IS ONLINE DISPUTE RESOLUTION?

Online Dispute Resolution (ODR) is a process that utilizes the internet as a more efficient medium for parties to resolve their disputes through a variety of Alternative Dispute Resolution (ADR) methods and brings disputing parties together ‘online’ to participate in a dialogue about resolving their dispute.[3] It can be referred to as a process that leverages the availability of the internet, its speed and convenience, in the resolution of disputes through the various ADR methods.

The European Commission has leveraged the platform of ODR to make online shopping safer and fairer by providing access to quality dispute resolution tools[4]. It allows consumers to contact traders directly in order to resolve problems related to online shopping with the alternative to send dispute to ADR. ODR in the EU are regulated by the Directive 2013/11/EU on Consumer ADR.[5] Apart from the European Union, the UN Commission for International Trade (UNICTRAL) in its Technical Notes on Online Dispute Resolution published in 2017 sets out procedural rules for the settlement of disputes that arise from cross-border electronic commerce transactions.[6]

The European Commission has leveraged the platform of ODR to make online shopping safer and fairer by providing access to quality dispute resolution tools[7]. It allows consumers to contact traders directly in order to resolve problems related to online shopping with the alternative to send dispute to ADR. ODR in the EU are regulated by the Directive 2013/11/EU on Consumer ADR.[8] Apart from the European Union, the UN Commission for International Trade (UNICTRAL) in its Technical Notes on Online Dispute Resolution published in 2017 sets out procedural rules for the settlement of disputes that arise from cross-border electronic commerce transactions.[9] Other countries that have adopted the use of ODR are the United Kingdom[10], Singapore, China, India, Egypt, Nigeria, etc.

In fact, giant e-commerce commerce companies such as eBay, PayPal, amazon, SquareTrade, Alibaba, etc. have not only employed ODR in settling B2C and C2C disputes on their platforms but have settled millions of such disputes yearly.

TYPES OF ONLINE DISPUTE RESOLUTION

Disputes under ODR can be categorized into 3: –

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a) Business to Business (B2B)

This usually involve 2 business owners seeking to resolve a commercial dispute. Emphasis in B2B is usually on the convenience and expertise of the process as against consumer vulnerability.[11]

b) Business to Consumer (B2C)

This revolves around disputes between business owners and consumers.

c) Consumer to Consumer (C2C)

This involves disputes between consumers, mostly in the sale of used items.

WHAT ARE THE ONLINE DISPUTE RESOLUTION PROCESSES?

A) The choice of an ODR Provider

Depending on the platform where a dispute arose from, some e-commerce platforms state the ODR Provider parties are to submit to, for instance, eBay encourage C2C disputants to use the eBay ODR process while others provide a range of ODR Providers disputants could submit a dispute to. In choosing an ODR Provider it is advisable for parties to choose an independent and impartial provider.

B) Preparing for ODR

Parties should pay attention to the rules governing their choice of ODR Provider. Also, all facts and relevant documents required to support their position should be collated.

C) Commencement of ODR Proceedings

The ODR Process is dependent on the rules of the ODR Provider. For instance, the UNCITRAL Technical notes on ODR[12] provides as follows:

“33. In order that an ODR proceeding may begin, it is desirable that the claimant provide to the ODR administrator a notice containing the following information: (a)The name and electronic address of the claimant and of the claimant’s representative (if any) authorized to act for the claimant in the ODR proceedings; (b)The name and electronic address of the respondent and of the respondent’s representative (if any) known to the claimant; (c)The grounds on which the claim is made; (d) Any solutions proposed to resolve the dispute; (e)The claimant’s preferred language of proceedings; and (f)The signature or other means of identification and authen-tication of the claimant and/or the claimant’s representative.

  1. ODR proceedings may be deemed to have commenced when, following a claimant’s communication of a notice to the ODR admin-istrator, the ODR administrator notifies the parties that the notice is available at the ODR platform.
  2. It is desirable that the respondent communicate its response to the ODR administrator within a reasonable time of being notified of the availability of the claimant’s notice on the ODR platform, and that the response include the following elements: (a)The name and electronic address of the respondent and the respondent’s representative (if any) authorized to act for the respondent in the ODR proceedings; (b)A response to the grounds on which the claim is made; (c)Any solutions proposed to resolve the dispute; (d)The signature or other means of identification and authen-tication of the respondent and/or the respondent’s representative; and(e )Notice of any counterclaim containing the grounds on which the counterclaim is made.
  3. As much as is possible, it is desirable that both the notice and response be accompanied by all documents and other evidence relied upon by each party, or contain references to them. In addition, to the extent that a claimant is pursuing any other legal remedies, it is desirable that such information also be provided with the notice

 D. Stages of ODR

This is dependent on the rules regulating the ODR Provider. The likely stages of ODR under the UNCITRAL Technical notes on ODR[13] are:

  1. Negotiation
  2. Facilitated Settlement, and
  3. The Final stage: The ODR Administrator or neutral has the duty of informing the parties of the nature of the final stage and of the form it will take.

ADVANTAGES OF ONLINE DISPUTE RESOLUTION

  1. It is a voluntary, informal and flexible process which gives parties the freedom to design or mould the process to their needs.
  2. It adopts a consensual approach to dispute resolution as against an adversarial approach.
  3. It is cost effective and usually do not cost as much as litigation. In ODR, the cost of the process and the facilitator’s fees are usually borne by both parties. Also, the cost of travel, venue reservation, amongst others is exempted in ODR.
  4. It is convenient: Since ODR requires the use of IT majorly, therefore, lots of people can participate irrespective of their locations. Thereby, Making ODR appropriate for the resolution of cross-border disputes, thereby precluding the cost of travel or instances where a physical hearing would not be feasible due to disability or the possibility of aggravating ill feeling between parties at a face to face hearing.
  5. Jurisdiction: Once parties bind themselves to resolutions through a settlement agreement, jurisdictional issues can be avoided altogether.[14]
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CHALLENGES OF ONLINE DISPUTE RESOLUTION IN NIGERIA

  1. Ignorance of ODR, its benefits and workings: Most businesses and consumers have not heard of ODR and may be wary of it. Also, lots of legal practitioners are unaware of ODR and its operations.
  2. Language barrier: Most discussions in ODR are in writing, therefore, it may be difficult to use where parties speak different languages or have difficulty communicating in writing.
  3. Accessibility to internet and IT infrastructure: Since ODR is driven by technology, business owners or consumers who are not computer literates or do not have easy access to IT or who live in areas with poor network may not be able to fully participate in ODR sessions. In Nigeria, this may be a challenge due to the level of computer literacy, poor internet reception and access and access to computers.
  4. Complexity of conflict of laws: Instances where parties are resident in different areas, issues as to applicable laws, jurisdiction, etc. may arise.
  5. Confidentiality: There might be fear of breach of privacy amongst users. Some disputes might involve the revelation of sensitive information, such as trade secrets and if the ODR Platforms are not properly secured, such confidential information could be easily leaked, which might have a negative effect on the parties involved.
  6. Limited range of disputes: ODR is not appropriate for the resolution of all disputes. Some disputes might require physical hearing.

STRATEGIES TO ENHANCE THE USE OF ONLINE DISPUTE RESOLUTION

  1. Awareness campaigns aimed at educating business owners and consumers about ODR as a dispute resolution mechanism, its operations and benefits in various languages and dialects.
  2. Lawyers should be sensitized and trained on the operations of ODR, their roles at ODR sessions and its benefits.
  3. ADR Practitioners, such as Arbitrators, Mediators, etc. should undergo trainings and simulations on resolving disputes through ODR, using various ODR platforms. Also, Practitioners should encourage business owners and consumers to explore ODR.
  4. Free ODR Platforms coordinating ODR services, such could either be integrated into the Multi-Door Courthouse scheme in Nigeria or modelled after it.
  5. Making ODR mandatory for e-commerce disputes. This could be modelled after the EU scheme on consumer ODR.
  6. Incentives could be provided for traders:[15]

a) Trustmark: public or private?

b) Black lists: Name and shame on the ODR platform?

c) Condemn of legalcosts

d) Pressure by payment providers

e) Allowing pre-dispute binding ODR

CONCLUSION

While the use of ODR in Nigeria is virtually non-existent, however, it is safe to say that the time to resort to the use of ODR is now when the justice system of some nations alongside other sectors has ground to a halt and citizens are waiting for the resumption of normal activities to file disputes that are newly arisen. In a nation that is notorious for slow paced access to justice, congestion of its courts and how slow the wheel of justice grinds; by the time the newly arisen cases are filed, it is without doubt that the judicial officers will be overtaxed which might result in fewer resolution of disputes. Hence, the need for all stakeholders, business owners, consumers, legal practitioners, ADR practitioners and judicial officers to heed the clarion call of ODR as an alternative and/ or an additional mechanism to the available mechanisms. As at March 2020 when China resumed business activities, the Chinese government advised dispute resolution organizations to increase their ODR efforts as it anticipates an increase in domestic disputes as a result of the coronavirus pandemic.[16]

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Some of the ODR providers in Nigeria are Court86, ADR ODR International, ODR Nigeria, Morenike Obi-Farinde of Adigun Ogunseitan & Co., etc. (Confirm the ODR Providers)

Biodun is a Legal Practitioner, Chartered Secretary, a certified Mediation Advocate and a trained Mediator. She is an ADR Enthusiast and resolutely believes in the effective resolution of disputes and preservation of relationships. Email – abiodunogunnubi@gmail.com

 Footnotes 

[1] A third of the global population is on coronavirus lockdown — here’s our constantly updated list of countries and restrictions – Juliana Kaplan, Lauren Frias and Morgan McFall-Johnsen. Accessed on https://www.businessinsider.com/countries-on-lockdown-coronavirus-italy-2020-3?r=DE&IR=T on April 12, 2020.

[2] Coronavirus disease (COVID-19) is an infectious disease caused by a newly discovered coronavirus. Coronaviruses are a large family of viruses that are known to cause illness ranging from the common cold to more severe diseases such as Middle East Respiratory Syndrome (MERS) and Severe Acute Respiratory Syndrome (SARS). Accessed on https://www.who.int/health-topics/coronavirus#tab=tab_1 and http://www.emro.who.int/health-topics/corona-virus/questions-and-answers.html on April 12, 2020.

[3] ODR and the Courts – Karim Benyekhlef and Nicholas Vermeys. Accessed on https://www.mediate.com/articles/ODRTheoryandPractice14.cfm  on April 12, 2020.

[4] Online Dispute Resolution. Accessed on https://ec.europa.eu/consumers/odr/main/?event=main.trader.register on April 12, 2020.

[5] DIRECTIVE 2013/11/EU OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 21 May 2013 on alternative dispute resolution for consumer disputes and amending Regulation (EC) No 2006/2004 and Directive 2009/22/EC (Directive on consumer ADR). Accessed on https://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2013:165:0063:0079:EN:PDF on April 12, 2020.

[6] Accessed on https://www.uncitral.org/pdf/english/texts/odr/V1700382_English_Technical_Notes_on_ODR.pdf on April 12, 2020.

[7] Online Dispute Resolution. Accessed on https://ec.europa.eu/consumers/odr/main/?event=main.trader.register on April 12, 2020.

[8] DIRECTIVE 2013/11/EU OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 21 May 2013 on alternative dispute resolution for consumer disputes and amending Regulation (EC) No 2006/2004 and Directive 2009/22/EC (Directive on consumer ADR). Accessed on https://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2013:165:0063:0079:EN:PDF on April 12, 2020.

[9] Accessed on https://www.uncitral.org/pdf/english/texts/odr/V1700382_English_Technical_Notes_on_ODR.pdf on April 12, 2020.

[10] The Alternative Dispute Resolution for Consumer Disputes (Amendment) Regulations 2015 introduced to the UK on 9 January 2015 an online dispute resolution platform (the ODR Platform) set up by the European Commission as an alternative dispute resolution (ADR) procedure. Accessed on April 12, 2020 on https://www.camdenmarket.com/european-odr-platform#

[11] International Chamber of Commerce, Resolving disputes online, Best practices for Online Dispute Resolution (ODR) in B2C and C2C transactions 2003

[12] Supra

[13] Supra

[14] E. Casey Lide, ADR and Cyberspace: The Role of Alternative Dispute Resolution in Online Commerce, Intellectual Property and Defamation, 12 OHIO ST. J. ON DISP. RESOL. 193, at 200 (1996)

[15] What should the ideal ODR system for e-commerce consumers look like? The Hidden World of Consumer ADR: Redress and Behaviour. Published in the CSLS Oxford, 28October 2011 by Dr. Pablo Cortés. Accessed on April 12, 2020 on https://www.law.ox.ac.uk/sites/files/oxlaw/dr_pablo_cortes.pdf

[16] China Pushes for Increase in Online Dispute Resolution as It Reboots Economy Vincent Chow on Law.com Accessed on http://odr.info/ on April 12, 2020

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