What is ODR?
Online Dispute Resolution (ODR) was conceptualised to cater to the needs of the continuously expanding internet users, looking for efficient, time-saving, inexpensive, and straightforward ways of dispute resolution. It contains a wide range of dispute resolution processes that capitalize on the ever-improving internet technology and enable the resolution of disputes through online mechanisms without requiring the parties to be in a room together.
ODR intends to eradicate the major problem of “access to justice” or A2J, which has always been traditionally looked at in terms of access to courts and lawyers. Although the traditional legal system is indispensable, it is sometimes unable to cater to the large volumes of issues involving low pecuniary values frequently faced by numerous companies. In such cases, ODR acts as a quick fix to their problems in cases where there are no practical alternatives or where the alternatives themselves are problematic. It is especially valuable as a way to provide consumers with access to a process that could help them consensually resolve their disputes efficiently, while making it easier for the businesses to cater to the requirements of their large consumer base in a cost-effective way, thus creating a win-win.
It should be kept in mind that companies using ODR are not looking to resolve a large number of disputes. Rather, the goal is to maximise the number of successful transactions, and resolving disputes is essential to increasing that volume.
ODR is crucial for businesses because it is estimated that 3-5% of e-commerce transactions end in disputes. For sites without a feedback or reputation system that users can consult before making a purchase, the percentage is even greater. ODR is a neutral process that provides quick decisions to both the buyer and seller.
When it comes to companies, mainly those involved in e-Commerce, there are three major types of dispute clarifications when it comes to ODR:
1. Business to Business (B2B)
Here, two commercial parties consensually seek to resolve disputes over specific transactions. The parties tend to be sophisticated, experienced users who place a greater emphasis on the convenience and expertise of the process.
2. Business to Consumer (B2C)
With the expansion of e-Commerce, B2C disputes are increasing in number. These are low in monetary value but high in volume and may involve unequal bargaining power between the consumer and the business.
3. Consumer to Consumer (C2C)
These are disputes involving transactions between two consumers (for example, the sale of a used item). These types of e-commerce transactions are also becoming more common with websites such as eBay or Craigslist acting as facilitators between two parties, although the website is not an actual party to the dispute.
What are the characteristics of ODR and Why ODR?
ODR is generally a voluntary process where parties get to decide whether they want to participate or pursue their claim in another forum. It is more relaxed and informal than offline proceedings, such as mediation, litigation, arbitration, and the like. It is also generally a confidential process, unless the parties agree otherwise or it is mandated by the law. Lastly, an ODR Neutral (generally only used if the ODR process is a mediation or arbitration proceeding), who assists the parties throughout the process, acts as an impartial third party and helps the parties come to a mutually acceptable settlement.
ODR may be the most appropriate option particularly for low-cost, high-volume transactions as it often allows for a timely and efficient resolution to problems at a nominal cost where the pecuniary value involved in dispute may not be sufficiently high to justify the cost of a meeting-based mediation (e.g., consumer disputes). It is flexible, creative and not governed by strict rules of procedure or evidence. It also allows for amore cost-efficient resolution of disputes where there is significant geographic distance between the parties and the amount in dispute may preclude the cost of travel. It may also allow for the participation of parties who would not be able to attend an offline meeting due to severe disabilities. As mentioned above, it is also confidential unless the parties agree otherwise or it is mandated by the law.
Thus, keeping in mind the wide range of benefits of this up and coming set of dispute resolution processes, companies generally prefer ODR and have started using it more as compared to other traditional methods of dispute resolution.
Why Legex Resolve?
At Legex Resolve, world’s first integrated ODR platform, we aim to bring a fast, reliable and effective way to solve disputes online, within 15 days! We offer dispute resolution and facilitation services globally to individuals, businesses, organisations and Resolution centres. Just provide us details regarding the dispute, invite the other party using their contact details, and once they agree to it, resolve the dispute completely online, with the help of our partner neutrals, or your own neutrals. Further, you can also insure your contracts against any future dispute that might arise. Resolution centres, including law firms and independent practitioners can use Resolve to manage their cases, client activities, conduct online proceedings and the whole process of resolution online, including negotiations, settlements, and arbitral awards.