November 26, 2020

Online Dispute Resolution: ‘A Step Ahead’ of Alternative Dispute Resolution

Introduction

During the era of globalization, when the world in this 21st century is witnessing the huge impact and the importance of technology in our life, it is observed that it is the need of the hour to accept and most importantly to adjust to this shift towards technology in every field. Starting from the social, economic, cultural to even the legal arena of the globe, technology is finding its way to develop a well- established medium to fasten up the work process and help people to keep pace with the speedy change in the work process. Having established its importance in people’s day to day lives, be it net banking or e-commerce, and having altered the scale at which human affairs are being conducted in today’s world, it is now heading towards fostering a medium for improving the condition of the legal industry especially concerning the resolution of disputes. This has now resulted in changing the face of the dispute resolution process by letting the technology to drive and assist the dispute resolution process through the mechanism named, ‘Online Dispute Resolution (ODR)’.

Online dispute resolution (ODR) refers to a technology led dispute resolution process which combines the power of the technology with arbitration to secure a speedy and efficient disposal of the cases pending in the courts. It’s basically an online version of alternative dispute resolution (ADR) which aims at settlement of disputes outside the court through arbitration, mediation and conciliation. Originally, when the courts saw the need for the settlement of the minor issues outside the court, with no wastage of the court precious time, the judicial system witnessed the birth of the Arbitration, that is, outside court settlement. But with the method itself becoming complex and time consuming, this era of smart technology calls for a more efficient method that is faster, less expensive and easily approachable, leading to the birth of Online Dispute Resolution (ODR) which can resolve a dispute and can issue a statement that is legally binding in a matter to days as compared to other legal remedies available to the parties.

The Positive Aspects

It is often argued that with the existing availability of services of ADR and also with everyday news of misuse of technology, how ODR proves to be an ideal mechanism for dispute resolution. The answers lie in understanding the positive aspects of ODR, some of which are:

1. Cost Efficient: One of the best benefits of switching to ODR is its efficiency in cutting down on litigation cost heavily. With zero travel costs involved and a lot of tasks being automated, it proves to be way cheaper than going for offline dispute resolution or for courtroom redressal.

2. Expeditious: The next benefit that gives ODR an upper hand is its capability of providing speedy and efficient resolution of disputes. With the offline mediation taking almost 6 months to resolve a dispute, ODR provides resolution within the maximum period of one month. The automation of smaller decisions and tasks helps the parties and the lawyers to save a significant amount of time and help them work effectively.

3. Flexibility: ODR provides the facility of flexibility in the dispute resolution hours. Being able to provide asynchronous ODR services, it allows the parties and the mediator or arbitrator to use its services at their time of convenience, without requiring them to take time off from their work.

4. Increased access to justice: By providing a dispute resolution mechanism that is cost efficient, flexible and easy to access, ODR improves the accessibility to justice especially for the disputes having low value. Such low value disputes fail to secure justice in the traditional dispute resolution system because the time and money that is spent on the process adds on to become much higher than the value of the dispute itself. Thus, ODR here provides a platform for the resolution of such low value disputes[1].

5. Digital Transformation: With tons of businesses running online and transactions being done online, settlement of disputes arising out of online trade becomes more efficient and easy if done through an online platform. Here is again why ODR is more preferred than the traditional dispute system.

6. Provides special features: With technology always running a step ahead, ODR provides various special features that make the dispute resolution much more effective than offline systems. The ‘recording feature’ allows the parties to record the video very easily and save it with them, with full security, for the future references. The ‘screen sharing feature’ makes it way easier to attach the documents relevant for the particular proceeding and thus save the time that is wasted in producing the documents in an offline system. The ODR software also maintains an automatic ‘verbatim record’ of whatever is going on in the proceedings.

Thus, ODR brings to the table of every user a much faster, easier and user friendly system of dispute resolution which places it a ‘step ahead’ of the traditional offline ADR.

Legal binding of ODR

Though ODR is emerging out to be the need in this technological era, the question of its legality and legal binding still continues to linger in the minds of the few. Thus, the regulatory framework in India validates the decisions taken through Online Dispute Resolution system through following sections:

1. Section 4 of Information Technology Act 2000 gives legal recognition to electronic records.

2. Section 7(4)(b) of the Arbitration and Conciliation Act 1996 treats electronic communication of arbitration agreement shall be deemed to be an arbitration agreement in writing.

3. Section 85A, 85B and 85C of the Indian Evidence Act 1996 supports the evidentiary value of electronic records and signatures.

4. Sections 5, 10A, 11, 12, 13 of the Information Technology Act 2000 are other sections that legally recognize all electronic records and validate them.

Apart from these sections, The United Nations Convention on International Settlement Agreements Resulting from Mediation has also recognized the validity of the settlement agreements in electronic form, of which India is a signatory. The further legal backup that ODR received was in the case of Meters and Instruments Private Limited and anr. v. Kanchan Mehta[2], in which the stress was made upon the need of online dispute resolution. Thus, this illustrates that ODR is not alone but has legal support and binding.

Expedient Redressal Solution during and post COVID-19

The world today is going through a lot of changes due to the current pandemic. People are unable to go to work, factories are closed, offices are non-operational, the economy is taking a hard hit and the loss of life is irreversible. In all this chaos, the legal system is facing the major problem of overburdening cases with thousands of cases getting piled up in the courts waiting to seek justice through proper redressal and hence is adding on to the existing pendency of cases in the courts.

This is where online arbitration gains its importance for being perfectly equipped to deal with the situation where people do not want to visit the courts as they take a lot of time and money and involve a very lengthy process. Being overburdened and heavily clogged with cases, ODR proves to be an efficient and improvised solution to easen up the pressure on the courts and also to make a way for justice seeking in the hard times of Covid 19. Above all with social distancing being the current topmost norm to follow, a system requiring only virtual simultaneous presence of the parties for the dispute redressal without the need of any personal meeting and contact at some particular place and time. It is definitely a boon to the current judicial system and thereby the need of the hour.

Comparison India and the world

In India online dispute resolution is a very new process as it began in the 2000’s with the invention of new technology and introduction of the internet to everyone at a low cost. But other countries in the world are much ahead of India in making use of this platform as they are already able to solve cases in both public and private domain. [3]The ODR first came into force in 1996 with the establishment of the virtual magistrate project whose sole purpose was to mediate the matters online. With this idea many private parties started to offer their assistance to solve the disputes that arise between the parties including both private and government institutions online and soon this idea that originated in the United States spread across the world.

[4]In countries with less developed ADR practices such as India litigation is the primary means to resolve a dispute. Mechanisms such as ADR are referred to as alternative methods rather than being referred to as a catalyst to the existing system which makes it harder for the potential beneficiaries to be left at the mercy of the slow paced existing judicial system. The idea itself of mediation is moving at a faster pace but the mechanism installed is unable to cope up with the speed of it.

In today’s time the online dispute resolution is growing at a faster pace but the overall growth is still slow when compared to the rest of the world as the awareness about the platform is less and people still prefer to use traditional methods of resolving a dispute because of the fact that this platform is unable to build that kind of trust which is required to provide fair justice and also because of the fact that the mediators appointed will be biased or unjust and hence one can lose a fair trial in the court of law but one cannot win and unfair hearing in this platform.

Conclusion

Since the inception of the idea of ‘Online Dispute Resolution’ in the 1990s, a significant growth of ODR has been observed by witnessing a shift in the platform of resolving disputes from the traditional offline ADR system to the technology driven, faster and more efficient ODR. Sensing that the future belongs to technology, several ODR platforms have been designed and have become operable in the country to drive the ADR system with cutting edge technology. SAMA, AGAMI, CODR or Central Online Dispute resolution, Presolve 360 being some of them.

At the same time, witnessing the boom in the e-business and e-commerce sector, online companies such as Paypal, E-bay, NestAway, have also understood the convenience that ODR provides in dispute resolution especially for online businesses and hence have started with the online resolution of their disputes. Even ICICI has also chosen to resolve its low to high value disputes using SAMA’a ODR platform.

This shows that though the ODR is growing at a slow pace, gradually companies have started sensing the importance of a technology driven resolution system. With the pendency of cases being 4.5 million in high courts, 31 million in district courts and 350,000 backlogs in the top 5 central tribunals[5], a new revolution in the judicial system in the form of ODR is definitely the need of the hour. The entire spectrum of civil cases including low value disputes, family law disputes, POSH enquiries, interval disciplinary enquiries, can easily be solved using ODR, thereby reducing the burden on the courts.

Thus, with the offline settlement being still cumbersome and the access to justice being abysmal, it’s the time to call and rely on Online Dispute Resolution for our rescue.


[1] Charlotte Austin, An Introduction to online dispute resolution (ODR), and its benefits and drawbacks, Government Centre for Dispute Resolution, (February 2017), https://www.mbie.govt.nz/assets/00ddebf604/online-dispute-resolution-report-2018.pdf

[2] 2017 SCC OnLine P&H 2709

[3] Deepak Verma and Anshu Banwari, Online Dispute resolution, INTECHOPEN, (September 19, 2018), https://www.intechopen.com/books/digital-communication-management/online-dispute-resolution

[4] Ms. Apporva Dixit, Online Dispute resoution : An Indian Perspective, INTERNATIONAL JOURNAL OF LAW MANAGEMENT AND HUMANITIES, (December, 2018), https://www.ijlmh.com/online-dispute-resolution-an-indian-perspective/

[5] Karan Singh, Online Dispute Resolution (ODR): A Positive Contrivance To Justice Post Covid 19, MONDAQ, (May 17, 2020), https://www.mondaq.com/india/arbitration-dispute-resolution/935022/online-dispute-resolution-odr-a-positive-contrivance-to-justice-post-covid-19

Author Details: Astha Agarwal and Sidharth Grover (Symbiosis Law School Noida)

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