Online Dispute Resolution Series: ODR Outside India

While ODR in India is still in genesis, there have been various leaps in the concept outside. Here are some interesting developments regarding ODR throughout the world.

The Origins in the USA The origins of ODR go as far back as 1996 when the Virtual Magistrate project was established to offer online arbitration system to resolve e-defamation matters. The Online Ombudsman’s office at the University of Massachusetts resolved a dispute of a website owner with a local newspaper owner involving a copyright infringement issue which was settled through mediation. Dispute resolution has always been a tricky yet vital affair for the legal fraternity. Online dispute resolution (ODR) is a process where e-disputes are resolved through an internet-based mechanism automated by software or a neutral third party/panel offering a practicable solution. Here, e-disputes may include online hate speeches, posting of defamatory matter, posting of information that invades privacy of a person or disclosure of sensitive information online, apart from commercial disputes such as domain name disputes, breach of e-contract, criminal activities such as cyber frauds, corporate espionages, identity theft, or data thefts, intellectual property related disputes, cyber- terrorism, cyber-fascism, software related disputes etc. Institutions such as WIPO, SIAC and ICC have an established goodwill in resolving disputes through ADR and ODR. Other service providers in the U.S.A. are,,,,,

Since then ODR has flashed past leaps and bounds, overcome great hurdles and become a method to save money and time with making satisfying disposals at the same time.

The concept of ODR, in simpler terms, is in a direct relationship with the technological development of the nation. ADR law can become as vast as possible, but if there is no method of fast and fool-proof interpersonal communication between parties to disputes, there shall be no scope of ODR.

The European Small Claims Procedure

Small claims procedures provide a middle ground between formal litigation and ADR, where disputes involving small value claims can be resolved in courts faster, cheaply, and less formally. The main limitation of small claims procedures is that they are restricted to particular jurisdictions. In order to overcome this limitation, the European Commission has produced a regulation for a European Small Claims Procedure (ESCP). Implementation of the ESCP is expected in all EC Member States by January 2009. The ESCP is predominantly a written procedure that deals with claims under €2,000 arising in cross-border disputes. Its main advantage is that it provides for the enforcement of decisions in any of the member states without the present need to go through the formal mutual recognition of judgements (exequatur).

Great expectations are put on the ESCP, which in order to deliver a cost-effective process will have to rely on ICT. This will be a significant challenge because unlike the UDRP, which is becoming a fully online process for dealing with specific complaints, the ESCP will deal with a variety of civil and commercial disputes. The objective of the ESCP is the creation of a cost-efficient procedure applicable to small value claims in cross-border disputes. This objective could only be achieved by using a written procedure, assisted by electronic forms such as emails and video conferencing as foreseen by the ESCP.

The Regulation allows the use of new technologies in transferring information and evidence between the courts of the different member states. But, it will be the EC Member States who will decide, through their own regulations, which specific means of communication are acceptable in their courts. Given that the ESCP is a regulation and not a directive, it is arguable whether it has left too many aspects to the discretion of member states, which could call into question the legal certainty expected from a European regulation. Nevertheless, it can be expected that, in due time, electronic communications will reach every possible and reasonable aspect of the judicial procedure to assist in the resolution of online as well as off-line B2C disputes.

With the implementation of the ESCP, an institutionalized ODR may emerge in Europe in 2009. Many disputes will be resolved by judges communicating with parties through the Internet. It is expected that the ESCP will contribute to mitigating the legitimacy problem which also hampers the emergence of ODR. Perhaps, within the EU, where we have concern for the fairness of private procedures (i.e. restrictions in consumer arbitration) the ESCP may contribute to increasing trust in ODR processes.


The rate of growth of ODR has not been fast in Australia. In the early 2000s, it was predicted that ODR would be taken up and used by a significant proportion of the Australian population by the end of the decade. After conducting a survey in 2003, Conley Tyler and Bretherton concluded that: “There is demand for online ADR among more than 70% of potential users” and it did not seem unrealistic to assume that this would translate into significant growth in ODR.

In spite of the early optimism, exponential growth rates have not been achieved in the ODR field and that only gradual, although significant, ODR initiatives have been undertaken within Australia. It is also clear that as broadband speed and internet infiltration has increased so have the options and processes available within the ODR environment within Australia.

Author:- Joel Joseph

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