Alternative dispute resolution (ADR) mechanisms like arbitration, conciliation, mediation, etc have proved really beneficial in resolving low end disputes and certain civil matters. However, as more and more transactions are now conducted in an online environment, the use of ADR has become somewhat limited in nature. The advent of online dispute resolution (ODR) stems from the necessity to resolve online disputes originating from e-commerce disputes and other disputes arising out of online transactions.
Online transactions and business have an added problem of conflict of laws in cyberspace. Conflict of laws is the real issue that has to be addressed as different jurisdictions may have different legal and regulatory frameworks in this regard. International legal standards for ODR are still missing. This is preventing International harmonisation of ODR that is missing till now.
As different countries have different laws, in a given situation a single transaction may be treated differently by different countries. Commercial transactions and cross border e-commerce transactions can be greatly benefited if disputes arising out of same are redressed through use of ODR rather than traditional courts. Further, dispute resolution of cross border technology transactions can also be effectively resolved using ODR. However, in order to do that successfully, legal standards for online dispute resolution for cross-border electronic transactions must be formulated at the international level.
In the meantime, countries are trying to streamline their respective ODR regulatory regimes. The European Union (EU) is on the forefront of introducing and using ODR for resolving e-commerce and online transactions disputes. EU has introduced regulation on consumer ODR (PDF) and use of ADR for consumer disputes resolution (PDF). These regulations and guidelines would be followed by other EU member countries very soon.
United Kingdom (U.K.) government has also started working in the fields of ADR and ODR since 2012. Some of the initiatives and consultations initiated by U.K. government in this regard are impact assessment of ADR for consumer disputes and regulation on ODR (PDF), introduction of consumer rights bill (PDF), Midata- 2012 Review and Consultation (PDF), Midata- Government Response to 2012 Consultation (PDF), release of Midata-Privacy Impact Assessment Report (PDF), etc.
Now the U.K. government has initiated a consultation for alternative dispute resolution for consumers (PDF). This initiative intends to help the U.K. consumers to resolve a complaint without the cost and hassle of going to court. The aim is to give shoppers greater access to redress if something goes wrong with their purchase of goods or services. Creating a consumer-facing complaints website and phone line is one option being considered to reduce confusion that may be caused by the number of ADR schemes already in place. For example, there are some well established schemes in regulated sectors where the use of ADR is compulsory, such as the Financial Ombudsman Service.
The consultation is part of an EU Directive to be implemented by July 2015 and public comments have been invited till 3 June 2014.