What is Online Dispute Resolution?

What is Online Dispute Resolution?

Date : 05 Jun, 2021

Post By Advocate Karthik Raghavan

ODR mediation or Online Dispute Resolution is a mode of dispute resolution that uses innovative techniques and online technologies to resolve disputes between parties. It is a voluntary process where parties can resolve disputes through an impartial mediator and is an online equivalent of ADR i.e. Alternate Dispute Resolution. It can be applied to a wide range of disputes like consumer, matrimonial, e-commerce, and banking disputes.

The 3 commonly used modes of online dispute resolution are:

Arbitration It is a quasi-judicial adjudicatory process where an arbitrator is appointed by the Court or parties to resolve disputes.

Mediation – It is a negotiation process presided by a mediator. The whole purpose of mediation is to encourage parties to resolve disputes and decide the terms of the settlement.

Negotiation – It is a mode of dispute resolution where only parties are at liberty to resolve disputes in an amicable manner.

Benefits of online mediation:

  1. It is a cheaper and effective mode of dispute resolution. It has become a preferred option for parties to tackle the predicament of Covid-19.

  2. It is collaborative in nature as the primary focus is to settle disputes by mutual agreement of parties.

  3. It prioritizes the underlying interests of the parties and ensures privacy & confidentiality at every step of the process.

  4. This mode of dispute resolution fosters good relationships and trust between parties.

  5. It is a quicker mode of dispute resolution as disputes can be resolved in days and not in months or years.

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How does ODR Mediation work?

ODR mediation is still at a nascent stage in India. In a bid to encourage online mediation, NITI Aayog launched the first of its kind ODR mediation Handbook in India on April 9th. “Supreme Court Judge Hon’ble Justice YV Chandrachud launched the handbook and in his opening address stated this is a unique handbook on ODR mediation that will make us reconsider the mechanism for dispute resolution. It has the potential to become a watershed document for the dispute resolution ecosystem in India.”

In Europe, ODR mediation has gained a lot of prominence for resolving out-of-court disputes. The European Commission has provided a dedicated platform for resolving consumer disputes through online mediation. The European ODR mediation platform is established by the Commission to make online shopping safer and convenient by providing access to online dispute resolution tools. “For instance, in countries like Norway, Liechtenstein, or Iceland you can use it to find a solution for your consumer problem, to discuss a solution directly with a trader concerning your problem, or to agree on a dispute resolution body to handle your case. The platform provides a medium for settling disputes between consumers and traders in a non-confrontational manner. To lodge a complaint, you first need to register in the system and create your organization. If you are already registered, then you can just log in. Once you are on the dashboard, click on "Start a new case". Parties are given a limitation period of 90 days to resolve disputes. The platform has been operational since February 2016 and was established by EU Regulation 524/2013 on 21st May of 2013. On 13 December 2017, the European Commission published its first results of the platform. In addition to the report, the Commission also published the results of a web-scraping exercise involving the websites of 20,000 EU online traders in order to evaluate their compliance with the information obligations laid down in the ODR mediation Regulation. The findings of this exercise indicated that the ODR mediation platform is a work in progress and is still far away from achieving its true potential. While the European Union has taken adequate steps to provide a simple and cheap mode of dispute resolution, it is too early to comment on online mediation’s potential to resolve out-of-court disputes in a country like India. The primary focus is to lay the foundation and build a very strong ecosystem for this mode of dispute resolution. For instance, more awareness needs to be created in the rural belt where people do not have access to basic digital infrastructure and internet connectivity. In order to achieve this objective, legal reforms need to be introduced like modifying section 89 of Civil Procedure Code, 1908 by including online mediation as an effective mechanism in court-annexed mediation or passing legislation for this process, include ODR mediation in legal education and making pre-institution online mediation mandatory e.g. section 12A of the Commercial Courts Act, 2015. 

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Therefore, in light of the observations, it is safe to say ODR mediation has the potential to become an effective mechanism for resolving disputes but in a country like India there is a lot of ground to cover. The Government both Centre and State, the judiciary, and civil society need to play an active role in spreading awareness about online mediation by organizing legal workshops, introducing legal reforms, and establishing online mediation cells, especially in the rural areas. In order to reach its full potential, strong emphasis should be given to strengthening our digital infrastructure and encouraging entrepreneurship in this field. We need to prioritize relationships, trust & good faith and reduce the burden on our Courts.

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