ONLINE DISPUTE RESOLUTION :

SOME REFLECTIONS ON LAW AND PSYCHOLOGY

Workshop: Arbitration & Psychology

Brunel University, London24 May 2013

Dr Pablo CortésSenior LecturerSchool of LawUniversity of Leicester

OutlineI. Online Dispute ResolutionII. Recent legislative initiatives:

–Consumer ADR Directive and ODR Regulation–UNCITRAL Draft ODR Rules

III. Psychology could inform the development of incentives to encourage, when appropriate:

• Participation in the dispute resolution process• Amicable settlements when appropriate• Out-of-court enforcement

Part I: What is ODR?

Generally referred as ADR + ICT The fourth party in the dispute ODR is often the only option for dealing with e-

commerce disputes, especially when they are: cross-border low value high volume occurred online

A few success stories

Part II: Recent Legislative Initiatives

Challenges in the growth of ODR

• UNCITRAL Draft ODR Rules• EU Initiative to enhance consumer redress:

1. ADR Directive 2. ODR Regulation

UNCITRAL Draft Rules on ODR

UN Commission for International Trade Law (UNCITRAL) has the goal of developing int. law to facilitate int. trade.

December 2010 UNCITRAL WG III issued first draft Rules on ODR (current draft of Dec 2012)

The Rules will be complemented by Enforcement protocol Requirements for third neutrals and ODR Providers Substantive law principles

UNCITRAL Draft Rules on ODR

• Scope of application: – low-value – cross-border –e-commerce

• Language will be the one employed in the contract • Multi-step process in a two track system

1.Negotiation2.Facilitation 3.Arbitration (second track only)

• Enforcement of outcomes

EU Initiatives: 1. Consumer ADR Directive

• Coverage: – Availability of ADR entities (public or

private) in all the MS of the EU– Scope: contractual consumer complaints

arising from the sale of goods and provision of services in the EU

* Exclusion of claims brought by traders against consumers and claims related to health services and higher education

Cont. Consumer ADR Directive• Legal standards

– Expertise, Impartiality and Independence– Transparency– Effectiveness– Fairness (incl. the principles of liberty and

legality)• Information obligation (and penalties for

non-compliance)– Traders must inform when adhered to an ADR

entity– ADR entities must inform about their own

procedures

2. ODR Regulation

ODR PlatformHub for e-commerce complaintsOnline traders will be required to include

a linkComplaints forms in all the EC languagesLink parties to approved ADR entities Case management toolManaged by the ODR advisors from ECCs

Part III: Psychology and Incentives To ensure the participation in ODR

Traders will always make a cost-analysis Mandatory in specific sectors Online label or trustmark Feedbacks and reviews Rank down by online browsers Judicial cost penalties

Incentives

To ensure an early and amicable settlement Effective online negotiation tool that manages

parties expectations and facilitates proactive communications Pyramidal approach

Consumer bespoken information on their rights Publication of model cases Couple with effective adjudication

e.g. Arbitration or ombudsmen schemes Saving the fees of adjudication

Incentives

To ensure out of court compliance of final decisions and arbitral awards Public enforcement agencies should have access to

the information inserted in the ODR Plat Links to e-Justice –i.e. fast-track online judicial

processes, e.g. ESCP and collective redress options Collaboration with payment providers in the

enforcement of awards Chargebacks Black-lists/Reviews

Conclusion•Shift from developing judicial protection to building ODR structures that provide consumers with real and tangible redress

•There is a gap on socio-legal research for online arbitration• This is because there is a lack of successful initiatives

• The new legal framework aims to remedy this by promoting the use of ODR

•Future empirical analysis will be instrumental in helping to design more efficient and fair online processes