Online Dispute Resolution (ODR) is defined as an application of information and communications technology to facilitate the prevention, management, and resolution of disputes. It normally applies the alternative dispute resolution processes to resolve a claim or dispute. ODR can be used to resolve both the disputes that may arise online such as from e-commerce transactions or of-line disputes-these are any form of disputes that do not involve the internet. It is important to point out that dispute resolution is considered to be an alternative to the traditional legal process that involves mainly people going to a court and, presenting their issues to a judge or jury to settle a dispute. In order for an online dispute to exist, there needs to be a claimant (this is the party that is initiating the ODR proceedings), the respondent (the party who has been provided with the claimants notice), and a neutral (this is an individual or a party that is involved in either settling or resolving a dispute). It is important to point out that ODR normally requires a technology-based intermediary, meaning that, it cannot be classified as an ODR proceeding if it only involves the parties to a dispute and a neutral.
There are different dispute classifications for ODR. The first type of dispute classification is Business to Business (B2B). The dispute normally involves two parties that have a conflict about a specific transaction, and they are deliberating on how they can solve it. The involved parties are more experienced, and therefore, there is less concern about party vulnerability. In this case, great emphasis is normally placed on the expertise and also the convenience of the process. In this type of case, they normally use arbitration. The second type of dispute classification is Business to Consumer B2C) disputes. There has been a rise of B2C cases due to an increase in online transactions. These types of disputes tend to involve little amount of money, however they tend to be large in terms of the number of cases involved, and there is unequal bargaining power between the involved parties. However, it may be able to address the issues that customers have or feel need to be addressed by the involved businesses by offering due process rights. There is also the Consumer to Consumer (C2C) disputes. They normally involve transactions that involve two customers, and such cases are increasingly becoming common and there various websites such as eBay and Craiglist that act as facilitators between these two parties. It is important to note that, these websites that act as facilitators are not an actual party to the dispute involved.
Legal Framework and Regulations about ODR
The current legal framework for online arbitration is provided by different areas of regulation. There are institutional rules, private contractual agreements, regime of international commercial arbitration consisting of international conventions, bilateral treaties, UNCITRAL Model Law, and national arbitration laws. In 2010, UNCITRAL began developing rules and laws about future global cross-border ODR to solve disputes that may arise from e-commerce transactions. The ODR rules that were established included the provision of guidelines for ODR providers and neutrals, the criteria that will be used for the accreditation process of the ODR providers and neutrals, the substantive legal principles that will be used when deciding various cases, and the enforcement protocols. It is important to point out that; no specific body or regulation governs ODR explicitly, and therefore it can be described as a self-regulation body.
Therefore, the admissibility of the online dispute method will mainly rely on the admissibility of an electronic document, and also electronic procedures. This means that the acceptance of the use of information technology will have to be familiarized for ODR to be considered admissible. It is important to the point that the lack of an organ such a government or legal entity to regulate ODR, ultimately hampers its overall growth and development. Some countries lack the legislative instruments about ODR and therefore do not have a legal infrastructure to govern e-commerce. Therefore, the binding nature of ODR is dependent on the usage of the provider. The providers normally declare that they are providing either binding or non-binding arbitration.
Reasons as to why ODR Began to be Used
ODR began to be commonly used in the mid-1990s, mainly as a response to the disputes that were arising due to the expansion of e-commerce. During that period, the internet was being used for other activities other than accessing or sharing information. People began to use the internet for commercial purposes- conducting financial transactions, and developing business relationships. The online environment is designed in such a manner that relationships can easily be formed, and also they can easily be broken, and therefore, increases the risks of conflicts and disputes. It also became clear that the online disputes could not be resolved using the traditional offline channels due to various factors such as distance between the two parties ( in some cases the parties involved in a dispute were from different states or even continents), and therefore, these disputes could not be resolved using a face-to-face meeting. The only way that these disputes could be resolved was through the use of an online platform or channels. Therefore, there was the need to create new tools and resources that mainly exploited the capabilities of digital communication and information processing through the use of computers. The digital tools that are normally used to resolve disputes include e-mails, and videoconferencing. ODR normally involves parties in mediation, arbitration, and also negotiation. It is also important to point out that the ODR process was developed to circumvent the clogged and slow-moving court processes. It was also seen as an alternative whereby various court processes could be solved without necessarily having to be physically present in a court to resolve certain disputes. Today, ODR is considered to be the fastest growing area about dispute resolution to the point that it is now being used both for offline and higher value disputes.
Difference between Online Dispute Resolution and Parties Negotiation
For an ODR process to be conducted, there is the need for an existing system that will be used to generate, send, receive, store, or process the communication between disputing members in a manner that ensures there is data security. On the other hand, in parties negotiations, it normally involves a dialogue between one or two parties, whose aim is to reach a beneficial over one or more issues where a conflict exists. In this case, a beneficial outcome can be for one or all of the parties that are involved in the process. Therefore, even though in both cases, there are mainly two parties that are negotiating over a certain issue that has arisen between them, in an ODR process there has to be an internet-based system that will facilitate communication between the two parties that are involved.
Advantages of Online Dispute Resolution
ODR is gaining popularity when it comes to the resolution of e-commerce disputes for both businesses and consumers. The following are the advantages that have made online dispute resolution to grow in its popularity. ODR is regarded as being less expensive in comparison to the traditional legal process, and therefore it is cost-effective for the parties that are involved in dispute. It is seen as an efficient method, based on the ability of the people who are involved in the process, being in a position whereby they can resolve their disputes quickly than when they use the traditional legal processes. It also ensures that the parties involved in the dispute resolution are actively involved to have a partial control of the outcome of the process. Therefore, they must work with each other throughout the process to be in a position whereby they can resolve the dispute, and also in some sense, control the outcome of that dispute. Also, the ODR process is seen to be more flexible than the traditional legal processes, and it is therefore ideal for people who are busy; they can schedule their online meetings to when they are available to resolve a certain issue. Furthermore, it is also considered to be geographically flexible in that; it allows the parties involved to participate actively and regularly still when solving an issue, even when they are in different geographic locations. Therefore, the parties involved need not travel to solve a case, as they can do it on an online platform.
Characteristics of ODR
ODR has the following characteristics:
Voluntary_ In most of the ODR processes, they normally allow the parties involved the freedom to choose whether they will choose to resolve a dispute using this platform, or they will prefer to use other means to settle a dispute. Most of these processes also provide the participating parties the freedom to withdraw whenever they feel like.
Informal: In comparison with other proceedings such as mediation, litigation or even arbitration, an ODR process can be described to be a bit more relaxed, and also informal. In most cases, the process uses an asynchronous process, and the parties involved in this process are provided with enough time in order to reflect on their positions in relation to the case before they can be involved in the process of making an agreement in relation to the issue or issues they had conflicted about.
Confidential: The ODR is considered to be a confidential process unless the parties that are involved in the case state that it can be non-confidential. However, in situations whereby the federal government is considered to be a party to the case, then the confidentiality clause, Access to Information Act and Privacy Act need to be critically examined to determine the extent of information that will be disclosed in the case.
Assisted: In some ODR processes, there is a third party involved, i.e., the ODR Neutral. His or her role in the case is to help the parties involved in a case to be able to settle their issues and come up with a mutually acceptable settlement. However, it is important to point out that an ODR Neutral is only used in the ODR processes that have a mediation or arbitration component.
Mechanism of Online Dispute Resolution
As it has been stated before, the purpose of the ODR process is to provide the parties that are involved in a case an electronic technology platform to allow them to resolve their dispute. The process can occur in real time or may be conducted in an asynchronous manner, which are normally determined by the rules that are given by the ODR Provider, and the wishes of the parties involved. As has been pointed out before, the process can be considered to be convenient and cost-efficient in comparison to face to face meeting regarding negotiating, mediating and also resolving existing disputes. The ODR process can be considered to be flexible about the agreement because the parties involved can decide to make them broad or specific about the case. In addition to that, the enforceability of the settlement agreement also mainly depends on the rules and also the jurisdiction of the ODR Provider, especially if the dispute involves people from different geographical locations and therefore can be termed as international.
It is important to point out that before deciding to use ODR as a means of settling existing disputes, it is essential to look at the following factors:
The ODR process is considered to be best suited when the case or conflict is not complicated to deal with, and preferably the issue that the two parties are quarreling...
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