Consumer Dispute Resolution Goes Online: Reflections on the Evolution of European Law for Out-of-Court Redress
| Published date | 01 March 2014 |
| Author | Arno R. Lodder,Pablo Cortés |
| DOI | 10.1177/1023263X1402100102 |
| Date | 01 March 2014 |
| Subject Matter | Article |
14 21 MJ 1 (2014)
ARTICLES
CONSUMER DISPUTE RESOLUTION GOES
ONLINE: REFLECTIONS ON THE EVOLUTION OF
EUROPEAN LAW FOR OUT-OF-COURT REDRESS
P C and A R. L*
AB STRACT
In this paper we discuss if and to what ex tent the 2013 EU Regulation on consumer online
dispute resolution (ODR) in tandem with the EU Directive on consumer alternative dis pute
resolution (ADR) is likely to nally ful l the expectations of ODR that policy makers and
academics have had for many years. Part 1 examines the reasons why ODR has not yet
taken o . Part 2 discusses previous EU initiatives that aimed to promote the use of ADR
and ODR. Part 3 brie y examines the Directive on consumer ADR and the Regulation
on consumer ODR, and it compares the EU approach with the UNCITRAL dra rules on
ODR. Finally, Part 4 evaluates the obstacles faced in the implementation of the EU ODR
Platform, and calls for the embedding of incentives in its operation, the provision of an
online negotiation tool, a connection to small claims processes, and the incorporation of
adequate tools to overcome langu age barriers.
Keywords: ODR; ADR; consumer law; ombudsman
§1. INTRODUCTION
It seems self-evident that part ies resolve disputes arising online v ia the internet, not least
because parties in an online tra nsaction may be at a physical distance from each other.
A bright future for online dispute resolution (ODR) has been drawn by many scholars
since the late 1990s,1 but as of yet the use of ODR has been largely disappointing, save
* Pablo Cortés is a Senior Lecturer at the School of Law, of University of Leicester. Arno R. Lodder is a
Professor of Internet Governance and Regu lation, Department of Transnational Legal Studies, VU
University Amsterdam.
1 To mention but a few R.C. Bordone, ‘Elect ronic Online Dispute Resolution: A Systems Approach-
Potential, Problems a nd a Proposal’, Harvard Negoti ation Law Review (1998), p.175–211; E. Katsh and
Consumer Dispute Re solution Goes Online
21 MJ 1 (2014) 15
for a limited number of success storie s.2 is sit uation contrasts starkly wit h the growth
of E-Commerce. Gradually, more people are using the internet to purchase goods or to
receive services, lead ing to a growing online activ ity that o en has a detr imental impact,
and leads to the closure of o ine stores.3 For those brick-a nd-mortar stores it is hard to
compete with online stores t hat do not need physical buildings to receive their cu stomers
and can be accessed from any place with internet access.4 ODR techniques could o er
similar advantages to parties in dispute, but alternative dispute resolution (ADR)
providers have not moved online, and generally t he use of ODR is surprisingly limited.
e lack of mechanisms for redress in E-Commerce has had a knock on e ect on
the growth of the digital market, particularly amongst SMEs. Indeed, an important
constraint on the growth of E-Commerce is the user’s lack of trust, who tend to trust
recognized online brands more, such as Amazon; or familiar brick-and-mortar stores
with we ll-known bra nds, such as Ap ple. Althoug h E-Commerce is regulate d by national
and regional laws (and note that in fact, online buyers have more legal rights than their
o ine counterparts),5 parties that are in dispute o en cannot nd a forum to resolve
their con icts in a cost-e cient manner.
e United Nations and the European Union have recently recognized the need to
promote the use of ODR methods to enhance options for redress in cross-border trade,
particularly in the digital market. Accordingly, the United Nations Commission for
International Trade Law (UNCITR AL) established a Working Group (WG III on ODR)
J. Ri in, Online Dispute Re solution: Resolving C on icts in Cyberspace (Jos sey-Bass, 2001); E. Clark a nd
A. Hoyle, ‘Online D ispute Resolution: Present Rea lities and Future Prospec ts’, 17th Bile ta Conf erence ,
Amsterdam, 2002, ww w.bileta.ac.uk/02papers/hoyle.html; C. Rule, Online Dispute Resolution For
Business: B2B, E-Commerce, C onsumer, Employment, Insurance, and other Commercial Con icts
(Jossey-Bass, 2 002); D.A. Lars on, ‘Online Di spute Resolution: D o You Know Where Your Children Are? ’,
19 Negotiation Journal 3 (2003), p.199–205; A.R. L odder et al.(eds.), Proceeding s of the ODRworkshop.
org (Edinburgh, 2003); G. Kaufmann-Koh ler and T. Schultz, Online Dispute Resolution: Challenge s
for Contemporar y Justice (Kluwer Law Internation al, 2004); J. Hörnle, Cross-Border Internet Dispute
Resolution (Cambridge University Press, 2009); P. Cortés, Online Dispute Resolut ion for Consumers in
the European Union (Routle dge, 2010); A.R. Lodder a nd J. Zeleznikow, Enhanced Dispute Resolution
rough e Use Of Information Technolog y (Cambridge University Press, 2010); M. Wahab, E. Katsh
and D. Rainey, Online D ispute Resolution : eory an d Practice (Eleven Intern ational Publishi ng, 2012);
A.E. Vila lta Nicuesa, Mediación y Ar bitraje Electrónicos (A ranza di, 2013).
2 e b est known examples a re the online negot iation support of eBay/Square Trade t hat resolved dozens
of mil lions of di sputes, do main nam e arbitra tion by WIP O and othe rs sett ling tens of thousa nds case s,
and the blind bidd ing site Cybersett le, resolving for a value of ove r 1 billion dollars. e latter recently
stopped their ser vice, see A.R. Lodder, ‘Yeah I thin k Cybersett le is out of the ODR Game’, Jurel.nl
(2013), ht tp://ju rel.nl /2013/05 /22/.
3 e Economist, ‘ e Emporium Stri kes Back’, 13July 2013. See also T NS Political & So cial, ‘Consumer s’
attitudes towa rds cross-border trade a nd consumer protection’, Fla sh Eurobarometer 332 (2012), p.14.
4 On the connect ion between the physical world and the internet, see A.R. Lo dder, ‘ e Ten
Commandments of I nternet Law revisited: Basic Principles for I nternet Lawyers’, Inform ation &
Communication Technology Law, forthcoming.
5 See for instanc e information rights or t he cooling o period prov ided by for dista nce sales in Directive
2011/83/EU of the European Parliament and of the Council of 25October 2011 on Consumer Rights,
[2011] OJ L 304/64.
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