Replies to This Discussion

Permalink Reply by Pablo Cortes on October 30, 2012 at 1:50pm

Hello everyone!

Thanks for checking in this discussion on the European initiative on ODR. We welcome your views and questions on this forthcoming initiative, and in particular we would like to discuss the functions of the European ODR Platform -whether or not it should have an assisted negotiation too- as well as which sort of incentives should be imbedded into the Platform to make it more effective.

The EU ODR Platform according to the Proposal for the ODR Regulation (which will be soon approved by the European Parliament and Council) will be a website that will allow consumers and traders to submit their complaints in their own language.  The ODR Platform will allow parties to search and agree on to an ODR process provided by private and public ADR schemes through the ODR Platform. So, it looks like the ODR Platform itself may not facilitate the direct negotiation between the disputants (i.e. only the exchange of complaints and responses). Should the role of technology-assisted negotiation be carried out by the European Platform or by independent ODR providers, such as MODRIA or Smartsettle?

Another key issue will be to convince parties, especially traders as the most likely respondents, to agree to participate in the ODR process, to settle meritorious complaints early, and to comply with final outcomes (e.g. arbitral awards) without the need to enforce them in courts. Do you think that trustmarks, review sites, search engines, black-lists, and the involvement of payment intermediaries have a key role to play? What else would motivate parties’ participation and hence the resolution of their disputes?

Looking forward to reading your views,

Pablo

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Permalink Reply by Josep Suquet on October 30, 2012 at 4:58pm

Dear Pablo and all,

 

Thank you very much for organising this discussion forum on such an interesting topic.

As to the questions, in my opinion I would think that the ODR platform could perhaps leave room for private or public initiatives. This could benefit competition. It could also be a good effort for improving interoperability among private/public entities.

I also understand that trustmarks may help users to participate in the platform.

Moreover, I’d like to raise another issue regarding the confidentiality principle in the current EU Proposals on ODR/ADR (not privacy). On the one hand, the Regulation Proposal only refers to the national rules on confidentiality for ODR facilitators and ADR entities. On the other, the Directive Proposal does not contain as such the principle of confidentiality. In the B2C domain it seems that there are some tensions between confidentiality and a key principle in this domain such as transparency. However, the principle of confidentiality has always been considered a key principle in a mediation process (i.e., Mediation Directive, Green Paper on ADR) and sometimes it is regulated as a principle in a consumer mediation process (i.e, Consumer Code in Catalonia). The question that I would like to raise to the forum is then: Should there be any confidentiality requirements in the B2C ADR/ODR?

Thank you very much, 

Josep 

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Permalink Reply by Darin Thompson on October 30, 2012 at 6:20pm

Challenging questions, Pablo!

In terms of your first question about who the providers should be, a couple of factors that may influence the outcome will be usability and cost. 

In terms of usability, it would be prudent to build on the knowledge and practical expertise already accumulated with existing ODR providers, as opposed to a government-led approach to building a new platform from scratch. As many of us know, government-run technology projects can be quite challenging.

Perhaps it would also be possible to create a hybrid where some of the components or elements of existing platforms are integrated or configured to work within a government-created or administered platform. These innovations may be realistic because we are not burdened to creating static, bricks-and-mortar infrastructure. 

In terms of cost, it will be a big challenge to create and administer a system that doesn't end up being too expensive, either for the responsible government authorities or for the users. In our environment of resource scarcity, it will be quite important to avoid creating new expensive services that governments have to fund directly. Also, keeping in mind that consumer disputes can involve relatively small amounts of money, it won't be easy to pass on operating costs to users through things like filing fees.

Hopefully, we will be able to identify some solutions to these challenges as this work progresses.

Thanks,

Darin 

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Permalink Reply by Graham Ross on October 30, 2012 at 6:29pm

Josep, I suppose the short explanation  is that the Directive and Regulation are focused on  ADR in its broader sense and not just mediation and its higher dependence on confidentiality and privilege. Consumer ADR in Europe has so far weighed heavily towards adjudication/arbitration. ODR may help raise the mediation profile by reducing cost/increasing access.

As to the specifics of confidentiality, the Commission would probably say that it is not the role of this Directive /Regulation to regulate the mediation process itself  We already have in Europe a Mediation Directive and a European Code of Conduct for Mediators.  The objective is to create awareness and improve access. It is key to the legislation that the issues of standards will be left t the individual member states and the orgs responsible within them

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Permalink Reply by Graham Ross on October 30, 2012 at 6:32pm

A recently proposed amendment to the ODR Regulation is to extend its remit to cover claims by traders against consumers. This was objected to by many States including the UK. I argued for this extension because of the growing problem of adverse consumer reviews. See my blog on this subject at http://www.modria.com/business-reputation-threat/  What do others think of this extension? Should it be included?

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Permalink Reply by Pablo Cortes on October 30, 2012 at 6:38pm

Dear Josep,

 

You have raised very interesting points.

 

I completely agree with you that private and public ADR/ODR providers will need to work together, though I suspect that because of the mandate in the Directive initially, at least in some jurisdictions, we may initially see more public providers being accredited. But, in time, once start-ups crack how to make profitable B2C ODR models, private providers will take over. Perhaps even a few big providers will fight for the EU market.

 

In terms of the trustmark, you definitely know this market better than I do, but so far they haven’t proved to be a magic bullet. Maybe, with the exception of Confianza Online in Spain. Indeed, this initiative suggests that a trustmark with some institutional support (e.g. INC or European Commission) may bring more credibility and achieve a critical market –key factors for their success.

 

Confidentially is important in ADR, but in typically the low-value ODR may, as you noted, need to be balanced with transparency. A concern may appear when the same neutral is allocated to the same businesses that participate as repeat players. Procedural disclosures, transparency, and diligent accreditation mechanisms should be put in place to minimise potential forum shopping and conflict of interests. Also the neutrals’ degree of access to the information exchanged between the parties during the negotiations has not yet been decided. One possibility is that neutrals could have full access to the negotiation stage, while yet another would be to allow an exception at the request of one of the parties in order to respect the confidentiality of the negotiations. This approach responds to the traditional judicial and arbitral systems, where parties are granted complete confidentiality in their negotiations.  Confidentiality in the negotiation seeks, on one hand, not to discourage parties from disclosing evidence or settlement proposals that may be used against them in the adjudicative process, and, on the other hand, ensures that the perception of the adjudicator is not coloured by parties’ discussions and admissions of liability. Taking into consideration that ODR in this context aims to ensure an expeditious and efficient resolution of low-value disputes, the confidentiality of the negotiations could also be limited; but in if such approach is followed, then parties should at all times be notified of the level of confidentiality of the ADR/ODR process.

 

Un saludo,

 

Pablo

 

Josep Suquet said:

Dear Pablo and all,

 

Thank you very much for organising this discussion forum on such an interesting topic.

As to the questions, in my opinion I would think that the ODR platform could perhaps leave room for private or public initiatives. This could benefit competition. It could also be a good effort for improving interoperability among private/public entities.

I also understand that trustmarks may help users to participate in the platform.

Moreover, I’d like to raise another issue regarding the confidentiality principle in the current EU Proposals on ODR/ADR (not privacy). On the one hand, the Regulation Proposal only refers to the national rules on confidentiality for ODR facilitators and ADR entities. On the other, the Directive Proposal does not contain as such the principle of confidentiality. In the B2C domain it seems that there are some tensions between confidentiality and a key principle in this domain such as transparency. However, the principle of confidentiality has always been considered a key principle in a mediation process (i.e., Mediation Directive, Green Paper on ADR) and sometimes it is regulated as a principle in a consumer mediation process (i.e, Consumer Code in Catalonia). The question that I would like to raise to the forum is then: Should there be any confidentiality requirements in the B2C ADR/ODR?

Thank you very much, 

Josep 

• ▶ Reply

Permalink Reply by Pablo Cortes on October 30, 2012 at 7:13pm

Thanks Darin, very good points. Absolutely agree with your post. Let me pick up on the point that there should be some sort of cooperation between the Platform and private entities. It seems to me that if the Platform will allow for standard claims and responses, they should also facilitate the direct negotiation between the parties, á la UNCITRAL, though as you pointed institutional systems tend to be less effective. Perhaps the answer will be on cooperation as you suggested.

 

You are right, cost will be a major challenge, particularly in building a system like the EU intends to tackle, which does not only aim at low-value e-commerce disputes (even though these may form the majority of complaints). Perhaps, traders will be willing to pick up the bill (as long as this is proportionate), but they will only do so if the find a value in ODR. While reviews and trustmarks could play a role, in the EU there are already various sectors where traders are legally required to be linked to ADR (e.g. banking, mail services, electricity, telecoms, etc). This may expand in the future to new sectors, such as public transport, particularly to airlines.

 

Regards,

 

Pablo

Darin Thompson said:

Challenging questions, Pablo!

In terms of your first question about who the providers should be, a couple of factors that may influence the outcome will be usability and cost. 

In terms of usability, it would be prudent to build on the knowledge and practical expertise already accumulated with existing ODR providers, as opposed to a government-led approach to building a new platform from scratch. As many of us know, government-run technology projects can be quite challenging.

Perhaps it would also be possible to create a hybrid where some of the components or elements of existing platforms are integrated or configured to work within a government-created or administered platform. These innovations may be realistic because we are not burdened to creating static, bricks-and-mortar infrastructure. 

In terms of cost, it will be a big challenge to create and administer a system that doesn't end up being too expensive, either for the responsible government authorities or for the users. In our environment of resource scarcity, it will be quite important to avoid creating new expensive services that governments have to fund directly. Also, keeping in mind that consumer disputes can involve relatively small amounts of money, it won't be easy to pass on operating costs to users through things like filing fees.

Hopefully, we will be able to identify some solutions to these challenges as this work progresses.

Thanks,

Darin 

• ▶ Reply

Permalink Reply by Pablo Cortes on October 30, 2012 at 7:21pm

Graham,

My understanding is that the Commission wanted to set minimum legal standards for B2C ADR -i.e. bringing the EC Recommendations 1998 and 2001 into hard law, in order to ensure a minimum level of 'due process' for the provision and accreditation of ADR providers.

I think that the ADR Directive already mentions the Mediation Directive, but arguably, it should have distinguished between consensual and adjudicative processes. That said, it looks like in the B2C context, these distinctions are blurring, particularly in processes like ombudsman schemes.

Regards,

Pablo 

Graham Ross said:

Josep, I suppose the short explanation  is that the Directive and Regulation are focused on  ADR in its broader sense and not just mediation and its higher dependence on confidentiality and privilege. Consumer ADR in Europe has so far weighed heavily towards adjudication/arbitration. ODR may help raise the mediation profile by reducing cost/increasing access.

As to the specifics of confidentiality, the Commission would probably say that it is not the role of this Directive /Regulation to regulate the mediation process itself  We already have in Europe a Mediation Directive and a European Code of Conduct for Mediators.  The objective is to create awareness and improve access. It is key to the legislation that the issues of standards will be left t the individual member states and the orgs responsible within them

• ▶ Reply

Permalink Reply by Pablo Cortes on October 30, 2012 at 7:26pm

Very thought provoking, but I still wonder how traders are going to manage to convince consumers to become respondents after the dispute arises. A trader threatening to take legal action for libel in a case of an unfair review could really persuade a consumer to participate in ODR?

Pablo

Graham Ross said:

A recently proposed amendment to the ODR Regulation is to extend its remit to cover claims by traders against consumers. This was objected to by many States including the UK. I argued for this extension because of the growing problem of adverse consumer reviews. See my blog on this subject at http://www.modria.com/business-reputation-threat/  What do others think of this extension? Should it be included?

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Permalink Reply by Graham Ross on October 31, 2012 at 2:51am

Pablo- the ODR I have proposed in my blog would be an independent expert review  that could be posted below the original consumer review as part of the response by the trader (most review sites allow for the trader's response) and so  did not require participation by the consumer.  As to mediation, it is more in the consumer's interest  that he is offered a very low cost online mediation than to be taken to court for libel where he may be disempowered by lack of funds to fight the claim.

Graham

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Permalink Reply by Graham Ross on October 31, 2012 at 2:57am

I did a blog also on the EU Regulation which can be read here 

I also attach a paper I wrote on the subject as an addendum to the final Report of the EMCOD project on Measuring Justice in ODR.

Attachments:

• eu odr regulation - emcod paper by Graham Ross.pdf, 52 KB

• ▶ Reply

Permalink Reply by Josep Suquet on October 31, 2012 at 7:21am

Dear Pablo, 

Thanks for your commentaries on confidentiality.

You have raised a very interesting issue regarding trustmarks. I agree with you that they are not magic bullets but they may help in promoting ODR. As you know currently trustmarks remain largely nationally-based. However, without any public intervention what do you think it could happen in the middle run: do you think this will continue as it is or do you think that private trustmarks could initiate a move towards a European-wide approach? It seems to me the last option would happen only if private entities see an economic benefit, and therefore the question is whether there is a market for low-cost B2C European conflicts. Another option would be a regulatory approach. As you say, some institutional support (European Commission) may bring more credibility and achieve a critical market. According with your experience with the Commission, do you think that the ODR Proposal could have also included some rules for the establishment of a generic European-wide trustmark, or do you think that the European Commission could later on address this issue?

Thanks!

Josep

Pablo Cortes said:

Dear Josep,

 

You have raised very interesting points.

 

I completely agree with you that private and public ADR/ODR providers will need to work together, though I suspect that because of the mandate in the Directive initially, at least in some jurisdictions, we may initially see more public providers being accredited. But, in time, once start-ups crack how to make profitable B2C ODR models, private providers will take over. Perhaps even a few big providers will fight for the EU market.

 

In terms of the trustmark, you definitely know this market better than I do, but so far they haven’t proved to be a magic bullet. Maybe, with the exception of Confianza Online in Spain. Indeed, this initiative suggests that a trustmark with some institutional support (e.g. INC or European Commission) may bring more credibility and achieve a critical market –key factors for their success.

 

Confidentially is important in ADR, but in typically the low-value ODR may, as you noted, need to be balanced with transparency. A concern may appear when the same neutral is allocated to the same businesses that participate as repeat players. Procedural disclosures, transparency, and diligent accreditation mechanisms should be put in place to minimise potential forum shopping and conflict of interests. Also the neutrals’ degree of access to the information exchanged between the parties during the negotiations has not yet been decided. One possibility is that neutrals could have full access to the negotiation stage, while yet another would be to allow an exception at the request of one of the parties in order to respect the confidentiality of the negotiations. This approach responds to the traditional judicial and arbitral systems, where parties are granted complete confidentiality in their negotiations.  Confidentiality in the negotiation seeks, on one hand, not to discourage parties from disclosing evidence or settlement proposals that may be used against them in the adjudicative process, and, on the other hand, ensures that the perception of the adjudicator is not coloured by parties’ discussions and admissions of liability. Taking into consideration that ODR in this context aims to ensure an expeditious and efficient resolution of low-value disputes, the confidentiality of the negotiations could also be limited; but in if such approach is followed, then parties should at all times be notified of the level of confidentiality of the ADR/ODR process.

 

Un saludo,

 

Pablo

 

Josep Suquet said:

Dear Pablo and all,

 

Thank you very much for organising this discussion forum on such an interesting topic.

As to the questions, in my opinion I would think that the ODR platform could perhaps leave room for private or public initiatives. This could benefit competition. It could also be a good effort for improving interoperability among private/public entities.

I also understand that trustmarks may help users to participate in the platform.

Moreover, I’d like to raise another issue regarding the confidentiality principle in the current EU Proposals on ODR/ADR (not privacy). On the one hand, the Regulation Proposal only refers to the national rules on confidentiality for ODR facilitators and ADR entities. On the other, the Directive Proposal does not contain as such the principle of confidentiality. In the B2C domain it seems that there are some tensions between confidentiality and a key principle in this domain such as transparency. However, the principle of confidentiality has always been considered a key principle in a mediation process (i.e., Mediation Directive, Green Paper on ADR) and sometimes it is regulated as a principle in a consumer mediation process (i.e, Consumer Code in Catalonia). The question that I would like to raise to the forum is then: Should there be any confidentiality requirements in the B2C ADR/ODR?

Thank you very much, 

Josep 

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