Replies to This Discussion

Permalink Reply by Chittu Nagarajan on November 7, 2013 at 2:09am

Hello from India :)

We are all well aware of what is happening with EU ODR, BC ODR initiatives and UNCITRAL ODR working groups. We do hear about things happening in Columbia on the ODR front.

Tenders are actually being floated by Governments across the globe seeking ODR in different streams.

I would love to hear about other initiatives across the Globe where ODR is being used, requested or just the awareness spreading.

From my part of the Globe, I received a pleasant surprise when one of the premier Associations similar to the Better Business Bureau spoke to me recently about wanting to implement ODR and the need for it :)

In Africa, I hear that in some ways its easier to implement ODR straight away rather than go through the traditional ADR-ODR path as ADR is being just introduced.

Let us know from your part of the Globe!

 

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Permalink Reply by Bill Warters on November 7, 2013 at 9:02am

As I sip my morning coffee here in Detroit, I wanted to drop in a plug for a newish project at NYU called GovLab. While not focused specifically on dispute resolution, ODR fits nicely into their larger wheelhouse of innovation and transparency in government, something called for by earlier posters in this thread. Many folks in Cyberweek will have already heard of Beth Noveck and her innovative work, with GovLab being just one of her latest manifestations. For a closer look at her current work, here's a link to a very recent presentation focusing on crowdsourcing and citizen involvement that Beth gave called Smart Cities, Smart Citizens given to the  International City/County Managers Association. 

Question: Does Crowdsourcing present new untapped opportunities for conflict resolvers in the government sector?

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Permalink Reply by Ayelet Sela on November 7, 2013 at 1:42pm

Thanks everyone for the very interesting comments. As Graham and Colin both noted, it is clear that issues of awareness to the availability of ODR as a recourse option and the enforceability of the resolutions will be key to the success of ODR in both the private and governmental sectors. 

I think that when we talk about making dispute resolution services more accessible via online platforms we are not talking just about physical and financial accessibility, but also about the qualitative shift in dispute resolution system design that ODR presents. The restructuring of complex processes in their online version simplifies their completion and empowers users to independently exhaust their rights. It is a key visionary promise of ODR that is particularly relevant to the mega-bureaucratic nature of many governmental processes such as rights-claiming, licensing, service rendering, appeals and their likes. Here I side with Colin that the collaboration between industry and government can assist the success of these systems because it combines commercially successful user-centric process designs with the legitimacy and enforceability of the processes under the auspices of courts/government. 

There is also reason to believe that there will not be much resistance to such changes. Unlike paper-based processes, the fact that in ODR data collection and representation can be customized differently for the various stakeholders in the process to fit their needs removes many of the gate-keeping barriers to adoption.  On the citizen/consumer end, processes can be simplified, user friendly, plain and pretty. On the governmental officials and decision makers’ side, the data can continue being presented in the traditional (often incomprehensible and bulky to the lay users’ naked eye) way they are used to seeing it, reducing resistance to change. Moreover, data that was collected in a restructured form can still be used to digitally populate existing legal forms, so that on the formal legal level, very little (if any) changes need to be made for ODR processes to be implemented.

Technology can similarly simplify (and innovate) citizen’s use of particularly complex and expensive right claiming mechanism, such as collective action. On top of efficient claim management, we can also think about new ways in which a class can be formed or a pattern of wrongdoing can be detected. We can already see private ODR websites trying to provide such services, but the potential for governmental consumer protection agencies is tremendous.

Now, of course, the obvious question is: if everyone’s interests are so well aligned and the future is so bright, why don’t we see more governmental ODR platforms?! I’d be very interested to hear other people’s insights and experiences in this front.

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Permalink Reply by Adrian S. Petrescu on November 7, 2013 at 9:14pm

I have read thoroughly the European Regulation pertaining to ODR.  While this was intended only as one of the starting points to the more general discussion on the desirability (or inevitability) of government intervention in the new field of ODR, the piece of legislation is in many ways telling of some of the benefits as well as the potential many shortcomings that may come from government involvement. We can address them in turn.  These are by no means constituting an exhaustive list.

1. Benefits

Some of these are specific to an European Union context, with its characteristics, i.e. 27 Member State nations speaking 23 languages, 27 different legal systems only partially integrated under European Law and the principle of subsidiarity, intra-European commerce across Member States etc. Others may be generalizable, as discussed below towards the end.

1.1. Consumer and trader uniformity in initiating claims and in processing of claims, including uniformity in authorization of ADR providers

1.2. Reliance on an established list of “certified” ADR providers in the process of resolving claims. The “European certification” “seal of approval” for these ADR certified specialists may make them much more acceptable to both traders and consumers. This in turn may accelerate further the growth of ADR and awareness of its existence and benefits, and may even set a positive precedent in Europe replicable to other regions of the world, complementing steps in this direction already taken elsewhere.

1.3. The promise of simpler more efficient and effective treatment of claims than through the complex Court System(s) between Member States and European-wide legal frameworks

1.4. Availability of necessary translation to claimants

1.5. Embedded presence of national Member States based ODR points of contact with roles in increasing awareness, ensuring compliance and resolving technical and other issues (non-dispute related) at local level

1.6.  Holding traders responsible to advertise ODR platform as well as provide email as the norm on their respective websites

 

2. Shortcomings

Again, some of these may be specific to the European Union current ODR implementation under way, but others could also be generalizable to another government intervention/regulation context elsewhere, as addressed briefly below.

2.1. Limitation to online executed commercial transactions. Scope is not extending to traditional non-online transactions. This may be a serious shortcoming since few transactions deserving of a claim may actually take advantage of the platform.

2.2. Implementation will take a few years. Meanwhile private party initiatives may develop that are more appealing to market participants and more general in scope than the European Union regulation provides

2.3. Exclusivity. Again, private party initiatives with a potential higher appeal could now be either precluded from appearing in the market or downright prohibited.

2.4. European Commission may not have exactly built a reputation of “ease of use” with their sponsored web-spaces so far. There are reasons for that. Yet, it is the European Commission who is tasked by this Regulation to build and maintain exactly that, a user-friendly ODR platform.

2.5. Original advent of ODR initiatives come from the private sector and their success seems to rely in part on simplicity, ease of use, efficiency and effectiveness of the platform as well as of the dispute resolution mechanisms.  While all these key features are intended in the Regulation, the mechanisms envisaged for the ODR platform may not be able to reach these characteristics with that much ease.

2.6. High operating costs. A few of the particularities of the EU, specifically its 23 official languages, may make the costs of implementation for the European Commission relatively high, especially compared to an initially low envisaged use of the ODR platform.

2.7. Low overall applicability and/or appeal due to high transaction costs for claimants and respondents alike. The ODR platform is to be provided for free.  We can see how in the initial stage of filing a claim on the ODR platform doing so may be appealing to a consumer with a small value claim, say the equivalent of $100. Yet, once the claim is referred to an ADR certified specialist for mediation towards resolution, the cost of the ADR services is then made available to the consumer (or trader, if the claim is filed by the trader).  Yet, this cost of ADR services may and will most likely be prohibitive for small value claims/disputes, and will then dissuade the initiator of the claim from pursuing it any further. In contrast, a non-integrated at European-wide level yet cost-free to the claimant dispute resolution mechanism embedded with the customer service function of the vendor (trader) may have much more success and appeal for a larger number of potential claims (which is a good thing for an initial stage especially if resolved at that stage—yet, in the particular situation of a Dutch vendor selling to a Bulgarian consumer the language barrier may be an issue which the ODR platform may address with more appeal and comparative better ease of use—such situations are in fact very likely to constitute the vast majority of cases in a pan-European context).  In the second case the vendor wants to protect the value of the brand and its reputation in the market place as well, and it is thus interested in resolving many small claims well before they constitute a critical mass that may “explode” and harm the trader’s reputation. The ODR platform does not address this either.  The possibility exists still that this latter scenario may occur nonetheless when the ODR platform is used and the consumer may be dissatisfied with elements of the ODR platform’s functioning or of the ADR specialist’s handling of the claim, all unrelated to the vendor’s original reason for the dispute, and yet those dissatisfactions may turn against the vendor as well, thus dissuading vendors from engaging in the ODR/ADR mechanisms for future instances.

2.8. Costs to businesses as well as consumers (through their respective shares of national taxes fueling the European Union budget) for a likely to be used only sporadically platform. A more general approach that would not exclude disputes arising from non-online transactions from using the ODR platform may achieve higher economies of scale in the use of the platform as well as much more appeal for it. Generally, if left to their own solutions private businesses are likely to develop and implement integrated approaches whereby all types of disputes are handled the same way, whether arising from a retail or online transaction.  See point 2.3. above.

2.9. Who are the ADR “certified” specialists?  Could the costs involved (including transaction costs) in getting on those national lists possibly dissuade perfectly qualified ADR providers from joining in?  Could these same transaction costs lead to a desire to recuperate those from dispute resolution parties thus driving the cost of ADR procedures high, in the absence of real competition due to a high barrier to entry for other ADR providers not (yet) on the “certified” list? This point however becomes neutral when balanced against point 1.2. above and its own potential medium and long term benefits.

 

There may be of course other factors, both positive and negative, not listed here, but based on the above alone we can attempt at extrapolating to the broader questions on government(s) involvement in ODR, whether as providers, regulators or combination of the two.

Many if not all of the above positives and negatives (even the translation availability related ones) may apply to the more general questions posed.  We do not know in what direction does the balance shift.  We tend however to suggest that some of the negatives in the European approach may be easily offset if private initiative is allowed to grow better and faster, thus allowing the ODR technologies and procedures to become more mature by natural development in the market (not just of products and services, but also of available dispute resolution mechanisms and techniques) before further innovation may be thwarted by what may be too early too crude regulatory action.

If it could be any example of worthy similarity, when government agencies (in general, meaning at national—or trans-national as in the European case--, state, or local levels alike) first got involved in an online presence, and for all too many all too long a time after that all that they did was an online “replica” of press releases like statements, in a one way street effort meant at showcasing to citizens what they do and how well they do it.  True interactivity of websites and a real effort at collecting, interpreting and acting upon citizenry opinions and concerns did not follow in many (if not in the wide majority of) instances even to this date, with about over two decades in the making of this ongoing effort.

If the above example is of any consequence, it is likely that a similar pattern may happen with this endeavor. Thus, the progress of the field of ODR may by far outpace the adaptation (and response) to it (as well as adoption of it) by this particular government trans-national entity(ies).  Even in the above case of adoption of interactive websites and a variety of services available online to citizens (including a form of ADR, in effect, namely traffic court appearances by online filing, an otherwise quite early and most welcome initiative in some jurisdictions), there are many best practices, which through the parallel back to the ODR case by far outpace the potential reach of the current provisions of the ODR European Regulation under consideration above.  The same may happen with ODR if the field is “left loose” some more for an initial period leading to the maturity of the field before the government knows what to do about it to make it sufficiently effective, comprehensive in applicability and how to best do those things.  Otherwise, intervening before ODR (including technology wise, as well as awareness wise of potential parties to a dispute) may be ripe for such intervention may be detrimental to the effects of the intervention.

It then goes without saying that I agree with the opinion expressed and discussed upon already of the quite necessary "proper balance between government leadership and private leadership." In fact achieving that balance may have to be also postponed a little to let private leadership flourish sufficiently first.

Of course, as always, just my two cents. And it seems I stayed away (not necessarily intentionally, maybe just for now) from the social contract question(s). Very interesting and challenging analysis could be conducted there, but I am still thinking about it...

Adrian

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Permalink Reply by Graham Ross on November 8, 2013 at 7:37am

Thank you Adrian for such a comprehensive and thought provoking commentary on the Regulation. Some comments of my own as 'provoked':-

1. " Scope is not extending to traditional non-online transactions. This may be a serious shortcoming since few transactions deserving of a claim may actually take advantage of the platform."

It is true that the Regulation on ODR does not itself cover offline transactions but there is a  reason for that (see below), and anyway, as I said earlier in this Forum, the real driver to ODR is the linked Directive on ADR. This requires (Article 5) ADR organisations dealing with consumer cases  to provide for the online submission of complaints via a website of their own and the online exchange of information between the parties ie requires ODR. Article 8 also requires the member states to ensure that consumer ADR procedures are accessible online. To answer your point this  Directive , encouraging ODR, applies to offline as well as online transactions.

The only reason the Regulation is restricted to online is because  it is simply providing the channel to ADR/ODR  for people who transact online.  From a practical perspective those other consumers who buy in person will, assuming their direct complaint achieved no resolution,  likely look up the website of the trader at some point  to make contact and on there they will see the link to the EU website and thus will flow through the channel to an ADR organisation in much the same way as if they had purchased online. To reinforce that practical impact , Article 13 of the Directive requires traders to inform consumers (including those buying in person) of the address of the websites of those ADR organisations whose DR processes they submit to (that will cover all the traders who are members of ombudsmen schemes, statutory or voluntary). 

So I  do not see this as a 'serious shortcoming'

2. You say implementation will take a few years and comment about the poor standard of EC run websites and indeed government  run websites in general (are you listening Kathleen Sebelius :-) . As to timing, member states need to have the rules in effect by the end of next year so the website can commence in January 2015. So rather than a few years we are only just over a year away! Of course there may be slippage with the website. 

3. " The ODR platform is to be provided for free.  We can see how in the initial stage of filing a claim on the ODR platform doing so may be appealing to a consumer with a small value claim, say the equivalent of $100.Yet, once the claim is referred to an ADR certified specialist for mediation towards resolution, the cost of the ADR services is then made available to the consumer (or trader, if the claim is filed by the trader).  Yet, this cost of ADR services may and will most likely be prohibitive for small value claims/disputes, and will then dissuade the initiator of the claim from pursuing it any further" 

Once again it is necessary to read the Regulation in the context of the Directive. Article 8 (c) of the Directive requires that "the ADR procedure is free of charge or available at a  nominal fee for consumers;"

So it will not dissuade claims. On the contrary it will encourage them (there is separate provision for triage out of frivolous claims). This raises a problem for the ADR organisations and traders since the real cost will have to be borne by the latter. This is already the case with most ombudsmen schemes (eg through trader association membership fees etc) but will be a problem for the ADR services that member states need to see set up for the residuary claims being those not covered by existing schemes. Of course this will encourage refusal to participate by traders if they feel they have to pay. The challenge will be for consumer organisations to establish the  benefit to traders in marketing terms (as per Colin's eBay report) and the benefit in avoiding the cost of defending small claims cases if they reject ADR. These problems reinforce the need for ADR organisations to begin now to consider their strategies. We are in a window period and I believe it gives huge opportunities. 

Your comments about the public/private balance are very appropriate and stimulating. This is where the debate should head  and I hope we can develop it and so give it much space for discussion in a wider context (beyond EU) next June at the Forum in San Jose. The work Colin and Modria are doing with the British Columbia consumer protection authority and the Attorney-General's plans for courts and ODR shows how that government are leading the way in that respect.

Incidentally, there is a symposium in Barcelona on the 4th/5th December with ODR and the EU law covered on day two. I have been invited to give a guest lecture on the subject and will reference the issues you raise and be interested to learn how this may pan out in Spain.  

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