ODR - THE WAY FORWARD FOR ADR
What is ADR?
Alternative Dispute Resolution (ADR) basically means the settling of a dispute without resorting to litigation. It saves people from the rigors, costs, trials and tribulations of a courtroom and is a less formal system of dispute resolution than the courtroom.
ADR broadly involves three kinds of dispute resolution mechanisms:
i. Arbitration
ii. Mediation
iii. Conciliation
Arbitration in India has been prevalent since the times of the kings where disputes have been settled by arbitration. Later, arbitration was first codified into law in India by way of The Bengal Regulation Act of 1772. Over the last more than 200 years, the law has evolved to keep pace with the changing times and changing human behavior and presently we have the Arbitration and Conciliation Act of 1996.
As far as dispute resolution is concerned, both the courts and alternative dispute resolution mechanisms, have been painstakingly slow in embracing the advancement of technology in their systems. As a result, litigants have been at the mercy of wanton and arbitrary delays in the courts. ADR and more particularly, arbitration was heralded as the panacea for this evil.
What ails the traditional form of ADR?
However, even in ADR which is supposed to be a cheaper and expeditious alternative to courts, the situation is no different. Lets take arbitration as an example. Presuming that the parties to an agreement are in dispute and choose to go for arbitration, the process that is followed goes somewhat like this:
i. Appointment of the Sole Arbitrator / Panel of Arbitrators
ii. The Arbitrator/s then call for a first meeting. In this meeting, the fees of the Arbitrator/s are fixed, future time table is generally decided i.e. by when the pleadings will be completed, how will evidence be recorded, whether provisions of Civil Procedure Code 1908 will apply or not, and so on and so forth.
iii. Thereafter, the parties have to make physical arrangements for the arbitrator or panel of arbitrator/s for every date the arbitration hearing is to take place which include lodging and boarding of the arbitrators, their local transport, conference room bookings, legal secretary, printing, photocopying, etc.
iv. Further, the process is fraught with delays as there are several variables. Some day the arbitrator/s cannot make it, another day one the advocates representing a disputing party needs some time, some day there may be infrastructure related issues with the meeting room that has been booked, etc.
v. Another fallout is that the litigants end up spending a huge cost on arbitration due to the various vagaries of the process outlined above.
As a result, although arbitration is a way to get effective legal remedy without going to court, it is not necessarily the most popular choice amongst litigants in India who would rather go to court than be subject to an arbitration.
However, the importance of arbitration cannot be ignored. In the words the great Mahatma Gandhi – “Differences we shall always have but we must settle them all, whether religious or other, by arbitration”.
Keeping this thought in mind, it is necessary to be open to new ideas and systems to make arbitration and other forms of alternative dispute resolution expeditious, cost effective and attractive as the first step for dispute resolution and one such possibility is by way of Online Dispute Resolution (ODR).
What is ODR?
ODR can be simply explained as dispute resolution by embracing the use of technology. Although there is no universal definition of ODR, the United Nations Commission on International Trade Law in its Technical Notes on Online Dispute Resolution of 2017 defines ODR as a “mechanism for resolving disputes through the use of electronic communications and other information and communication technology”.
The present decade i.e. since 2010 has seen rapid changes in human conduct and behavior with the advancement in technology all over the world. According to datareportal.com, a website which surveys data and internet usage, as of January 2019, there were nearly 4.4 billion internet users in the world. Just in 2018 alone, there has been an increase of 366 million internet users. The survey further says that internet users are growing at the rate of 11 internet users every second and India is at the forefront of this growth with the largest number of internet users added between January 2018 and January 2019 with nearly 100 million users and this has further resulted in burgeoning growth in ecommerce and online transactions as well. This in effect means that more and more people in India are accessing the internet on a daily basis for a variety of reasons.
As the number of people being exposed to technology and the internet are increasing, so also the number of dealings through technology are increasing be it communications, contracts, ecommerce, et. Consequently, as the people are getting used to doing business at the tap of a screen and on a real time basis, the expectation is that the time taken for dispute resolution will also be equally swift. However, they are getting increasingly frustrated and disappointed with the lack of efficiency in the courts which are over-burdened and clogged with cases. Even ADR in its current form is not helping the cause as the traditional way of doing things is getting too time and cost consuming.
How does ODR work?
ODR in its simplest sense would be conducting the entire dispute resolution process through the use of technology and a system would be based on the principles of fairness, transparency, due process and accountability.
However, both the parties must explicitly consent to resolving their disputes through ODR in writing so as to avoid any ambiguity.
For successfully conducting ODR, there must be an ODR platform which hosts the entire technology based infrastructure needed for ODR. This ODR platform has to provide a comprehensive technological solution to facilitate the ODR process. Generally, it would be preferable if the ODR platform can also act as the ODR Administrator of the ODR process so that the entire process flows seamlessly and there is harmony and coordination throughout. All the parties involved in the ODR must ensure that all the communication regarding the ODR takes place only through the specified ODR platform.
The ODR Administrator has to perform several responsibilities which include:
(a) Acknowledging the receipt of any communication by the ODR platform;
(b) Notifying parties of the availability of any communication received by the ODR platform; and
(c) Keeping the parties informed of the commencement and conclusion of different stages of the proceedings.
How the ODR Process can be conducted?
1. The Claimant sends a Notice to the ODR Administrator for initiating ODR along with details of the claimant, details of the respondent, details and particulars of the claim and reliefs sought through the ODR platform.
2. The ODR Administrator then notifies the respondent of receipt of the claim and officially communicates the commencement of ODR proceedings. Time is also given to the respondent to file its response on the ODR platform.
3. The response of the respondent should also contain the particulars of a counter claim, if any.
4. As far as possible, the claim and response should be accompanied by all the necessary documents and other evidence relied upon by each party.
5. If it is a dispute which is not complex in nature and if a possibility of a settlement by negotiation is possible, then the ODR Administrator can also provide for an option of arriving at a negotiated settlement. This is generally possible in case of minor disputes.
6. However, if settlement by negotiation is not possible, then the ODR Administrator appoints an Arbitrator from its empanelled list of Arbitrators to resolve the dispute.
7. It is important that such Arbitrator is a neutral and independent person and all the relevant details of such Arbitrator are made readily available to the parties to the dispute. The fees are already made known to the parties in advance at the time of initiation of the ODR process.
8. The ODR Administrator then sends the pleadings filed with it through the ODR platform to the Arbitrator.
9. Such Arbitrator should conduct the ODR proceedings in a manner he / she considers appropriate as per the applicable rules / guidelines.
10. The Award made by the Arbitrator shall be final and binding on the disputing parties.
Benefits of ODR
There are several advantages of switching to ODR. Some of them that can be enumerated are:
ü It is generally a swift and efficient process
ü It is cost effective
ü It is easily accessible and one is not a slave to the date system of the courts
ü Details are readily available at the tap of a button
ü It is system driven and less prone to human error
ü It does away with playing with the dates of hearing and adjournments
ü It is a format suitable for all types of dispute resolution such as small claims as well as complex or high value claims
ü There is no need for any specific physical arrangements to be made unlike in the traditional form of ADR
Challenges in ODR Implementation
Despite the several obvious benefits there exist a number of challenges in ODR implementation. That is the reason why we have not yet seen it embraced completely all over the world. Some of these concerns are:
? Standards and technical capabilities of the systems used
? Whether the parties have adequate technical knowledge to use the system for ODR
? Security and Integrity of Data
? Confidentiality of arbitral proceedings and communications
? Coordination between parties and conducting of online hearings
? Legal validity of the ODR process
? Legal validity and binding nature of an ODR Award
? Execution of an ODR Award
Conclusion
ODR has started seeping into the traditional ADR processes, as we see more and more technology being used in dispute resolution the world over. However, there still is a requirement of submitting physical pleadings, having personal hearings before an arbitrator, making oral submissions, cross examining witnesses, etc. Further, with the increase in ecommerce, cross border transactions and online contracts, ODR is the need of the hour. The conventional form of ADR is not equipped to deal with complex issues which emerge in cross border transactions, ecommerce transactions and with the increase of usage of Blockchain technology in future contracts. Although, challenges exist, the benefits of ODR far outweigh the concerns. ODR is a natural evolution of the traditional alternative dispute resolution process and seems to be the best solution to bring back the faith of the people in the ADR process. Until and unless the entire process does not undergo an overhaul and convert to a full fledged ODR, ADR will remain a poor country cousin of the courts. We have seen a smattering of ODR taking shape in India, for example, we have the Online Consumer Mediation Centre which started as an experimental collaboration between the National Law School of India University, Bangalore and the Ministry of Consumer Affairs, Food and Public Distribution. We also have banks using ODR for dealing with credit card related issues. However, these are mere exceptions as the norm is to still go for the conventional and traditional methods of dispute resolution. The time has now come to make a paradigm shift and India which is already established globally as an IT powerhouse should take the lead and carve out a niche as an ODR powerhouse!
Authored By:
Satyan S. Israni
BCom, LLM, FCS, MICA, DCL, Solicitor(UK)
Managing Partner of SD Israni Law Chambers, Mumbai.
References:
1. Uncitral Technical Notes on Dispute Resolution
2. Article by Mohamed S. Abdel Wahab on ODR and E-Arbitration – Trends and Challenges
3. Article by Zhao Yun, Timothy Sze, Tommy Li and Chittu Nagarajan on Online Dispute Resolution in Asia
4. https://www.mondaq.com/india/x/537190/Arbitration+Dispute+Resolution/Evolution+Of+Arbitration+In+India
5. https://datareportal.com/reports/digital-2019-global-digital-overview
6. https://en.wikipedia.org/wiki/Online_dispute_resolution
7. https://pib.gov.in/newsite/PrintRelease.aspx?relid=161953
8. https://onlinemediationcenter.ac.in