Get to understand the basics of ODR in the simplest way possible!

A few weeks ago, I was in the middle of lunch with a (non-legal)friend of mine when he asked me what my preferred field of law was. “Oh – IPR,” I answered without looking up from my food. “That’s so…evil, man.” As you can imagine, this was a fairly unexpected reaction. “Uh, what?” “Yeah, you’re going to be one of those who police the internet and essentially restrict the free flow of information and ideas. You’re the enemy of the new age, man.” Before you say anything, I assure you I did counter that. Vehemently. But, while the discussion on how I countered it is for another time, the point to be noted is that we live in an age where the flow of information and ideas across the digital space is the norm. In the 21st century, you have two lives: one offline and the other, online. To the 21st century lawyer, understanding the scope and reach of this online dimension with respect to the legal discipline, is key.

What is ODR?

The Online Dispute Resolution system is your traditional Alternate Dispute Resolution with a new age spin. Something like an upgrade to your apps or video games. ODR is everything that you relate with ADR – ranging from arbitration to negotiation – with the added benefit of it all being possible online. By eradicating the need for physical proximity between parties, ODR is faster, costs lesser, is more accessible and by extension, is more efficient.

How does ODR work?

While India still grapples with the concept of ODR, most of the West has begun taking bold strides in this direction. I await the Indian adaptation of ODR but, at present, I only have the Western example to aid my understanding of how the system works. The answer to the question above then, lies in – How does ODR work in the West?

In 2013, the EU famously enacted the ADR directive and the ODR regulation.Through these, it attempted to facilitate faster dispute resolution for the benefit of consumers in the EU. It set up an ODR platform for the Union, for the resolution of disputes arising from online transactions. Complaints are to be filed electronically and free of charge and can be made in all official languages of the EU. This platform will connect all the existing ADR entities. Once the complaint is made, the opposite party (trader) will be notified, following which they will select a competent ADR entity. The ODR Platform will subsequently transmit information and facilitate the resolution of the dispute. The ODR Platform also provides for a free case management tool that enables the ADR entity to conduct the ADR procedure through the ODR Platform. All of this is to be done within a period of 90 days.

In trying to achieve uniformity for its own market, the EU has in fact created ODR history. It has to be noted, however, that the EU ODR regulation restricts itself to online transactions and consumers and traders residing in the EU.

ODR, can however, include both offline and online transactions. This is reflected by the workings of ODR in the US. To cite an example, CyberSettle in the US allows for ODR through what is known as ‘blind-bidding’. The ODR provider in this case provides an automated system of accepting confidential offers from parties and generates settlements in case these offers are matched. If there is no such settlement, the dispute gets moved into an online mediation where a facilitator tries to work out a compromise without revealing the other party’s offers.

Essentially, therefore, one has to register the complaint with an ODR provider. This complaint then gets communicated by them, to the opposite party. The provider than facilitates/regulates the ODR process through a variety of means between the parties.

How binding is ODR?

As mentioned above, ODR follows in the footsteps of ADR. In this regard, whether ODR is binding, would have a lot to do with how binding the chosen mode of ODR, is. In most forms of ODR, e.g. mediation, arbitration – the settlement generally results in an agreement that is binding and thus enforceable.Then again, contract laws come into play and subsequently so will jurisdiction. Almost none of the modes of ODR eliminate recourse to litigation, but it is to be remembered that the point of the ODR is to reduce intervention by courts, as much as possible.

Foreseeably, ODR would have to struggle with enforceability, the lack of legislation, treaties and conventions and judicial opinions of the likes of BALCO v. Kaiser to back it up and carefully dilianeate its boundaries. But that, again, is for another time.

For now, imagine this: You are aggrieved in e-commerce. You log onto a website, submit your dispute in the language of your choice – free of cost, select an entity to resolve the dispute along with the opposite party, receive redressal within 90 days. Now imagine trying to look up a case law online without a database subscription. Which is easier?


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