European ODR Initiative

Moderated by Graham Ross & Pablo Cortes

 

The EU is in the process of approving a new legal framework on consumer redress with the aim of boosting the use of ODR methods within the European Internal Market. The forthcoming ODR Regulation requires the European Commission to design an ODR Platform by 2015 where parties can submit online complaints that will be later forwarded to nationally approved ADR/ODR providers. A question that remains open is whether the EU ODR Platform should provide an online negotiation tool, or whether this tool should be better left to individual ODR providers?

Another challenge that remains to be addressed is how to include incentives in ODR models. Indeed, many private and public ODR providers have failed to integrate enough incentives for (i) parties to participate in the ODR process, (ii) encouraging early settlements, and (iii) assuring out-of-court enforcement. Which sort of incentives could be imbedded in the European ODR Platform?

Join Pablo Cortés and Graham Ross for an exploration of the European ODR model for consumer redress.

 

Moderator Bios:

Pablo Cortés is a qualified attorney in Spain and a lecturer in law at the University of Leicester and a fellow at the National Center for Technology and Dispute Resolution, UMASS, Amherst. His research interests lie in the intersection of alternative dispute resolution (ADR), online dispute resolution (ODR), consumer protection, and civil procedure. He has recently published a monograph entitled Online Dispute Resolution for Consumers in the EU (Routledge, 2010). Pablo has recently carried out expert appointments by UNCITRAL and the European Commission.

 

 

 

 

 

Graham Ross is a UK lawyer and accredited mediator with over 30 years experience in IT
and the law. Graham was trained in commercial mediation by the ADR Group and is a
member of the Civil Mediation Council and the Ombudsman's Association.


Graham is the author of legal application software (including the original version of the
QUILL solicitor's accounts and time recording package) and was the founder of LAWTEL,
the web-based legal information update service. Graham is the leading UK expert in the
field of ODR (Online Dispute Resolution) which applies new forms of technology to the
resolution of disputes. He co-founded the UK's first ODR service, a blind bidding service
called We Can Settle in 2000, and two years later the online mediation service The
Mediation Room.


Graham's work in ODR has led to his appointment as a Fellow of the National Center of
Technology and Dispute Resolution (NCTDR) at the University of Massachusetts. He
developed the leading training course in applying technology to ADR and, as such, has
trained mediators from over 20 countries as well as developing and delivering a course for
the Milan Chamber of Arbitration and for the UK Ministry of Justice. Graham has been
invited to advise court services in the UK and Canada on applying technology tools to
improve ADR.


In 2012 Graham was invited to head the European operations for Modria Inc, a US spin off
company to eBay and PayPal ( www.modria.com ).


Graham was a member of the Working Party of the European Committee on
Standardisation (CEN) which developed a Workshop Agreement on standards for Online
Dispute Resolution and is currently a member of the EU funded EMCOD project
( www . emcod .ne t) led by the University of Tilburg and which is developing a online tool for
the measurement of justice through ODR.


Graham is the co-author of the European chapter in “Online Dispute Resolution: Theory
and Practice” and which was published in 2010 (Eleven Publishing - ISB 9490947253),
which described as "a state-of-the-art overview and assessment of the status quo and
future of the Online Dispute Resolution (ODR) field."


Graham speaks regularly at international conferences on the impact of the law on the
Internet and e-commerce and on technology in the judiciary and Alternative Dispute
Resolution.


In his legal work, Graham had considerable experience in clinical negligence and in major
high profile personal injury and product liability group actions, including the successful
action against the UK Government for HIV infected haemophiliacs (which he founded and
led) and was a member of the steering committee that negotiated the largest ever group
settlement, being for miners made ill by coal dust inhalation). Graham has been the
founder and member of over ten group action steering committees since 1987. Graham
worked as such with the courts in what was then virgin territory for managing large
numbers of claims. As a result he was at the forefront of developments in the court
management of personal injury and product liability related group litigation, the lessons of
which can contribute to the development of new, speedier and less costly techniques for
dispute resolution.


As a mediator Graham has developed novel techniques within the field of Interest-Based
Mediation which operates beyond the traditional areas of compromise by helping each
party to the dispute to consider interests they may have that, whilst peripheral to the main
issue, can be affected adversely as a consequence of the dispute not being resolved, no
matter what the outcome of the litigation. By focusing on identifying all interests, including
those not obviously linked, that may be impacted by the continuation of the dispute and
examining in detail the potential damage each side may suffer on the absence of
agreement, the parties themselves then begin to express their own desire to resolve the
matter between themselves. In other words, Graham works to bring the parties to the point
where it is they, the parties in dispute, who begin to press for settlement, not the mediator
seeking to coax them into it.
 

______________________________________________

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Replies to This Discussion

Hello everyone!

Thanks for checking in this discussion on the European initiative on ODR. We welcome your views and questions on this forthcoming initiative, and in particular we would like to discuss the functions of the European ODR Platform -whether or not it should have an assisted negotiation too- as well as which sort of incentives should be imbedded into the Platform to make it more effective.

The EU ODR Platform according to the Proposal for the ODR Regulation (which will be soon approved by the European Parliament and Council) will be a website that will allow consumers and traders to submit their complaints in their own language.  The ODR Platform will allow parties to search and agree on to an ODR process provided by private and public ADR schemes through the ODR Platform. So, it looks like the ODR Platform itself may not facilitate the direct negotiation between the disputants (i.e. only the exchange of complaints and responses). Should the role of technology-assisted negotiation be carried out by the European Platform or by independent ODR providers, such as MODRIA or Smartsettle?

Another key issue will be to convince parties, especially traders as the most likely respondents, to agree to participate in the ODR process, to settle meritorious complaints early, and to comply with final outcomes (e.g. arbitral awards) without the need to enforce them in courts. Do you think that trustmarks, review sites, search engines, black-lists, and the involvement of payment intermediaries have a key role to play? What else would motivate parties’ participation and hence the resolution of their disputes?

Looking forward to reading your views,

Pablo

Dear Pablo and all,

 

Thank you very much for organising this discussion forum on such an interesting topic.

As to the questions, in my opinion I would think that the ODR platform could perhaps leave room for private or public initiatives. This could benefit competition. It could also be a good effort for improving interoperability among private/public entities.

I also understand that trustmarks may help users to participate in the platform.

Moreover, I’d like to raise another issue regarding the confidentiality principle in the current EU Proposals on ODR/ADR (not privacy). On the one hand, the Regulation Proposal only refers to the national rules on confidentiality for ODR facilitators and ADR entities. On the other, the Directive Proposal does not contain as such the principle of confidentiality. In the B2C domain it seems that there are some tensions between confidentiality and a key principle in this domain such as transparency. However, the principle of confidentiality has always been considered a key principle in a mediation process (i.e., Mediation Directive, Green Paper on ADR) and sometimes it is regulated as a principle in a consumer mediation process (i.e, Consumer Code in Catalonia). The question that I would like to raise to the forum is then: Should there be any confidentiality requirements in the B2C ADR/ODR?

Thank you very much, 

Josep 

Challenging questions, Pablo!

In terms of your first question about who the providers should be, a couple of factors that may influence the outcome will be usability and cost. 

In terms of usability, it would be prudent to build on the knowledge and practical expertise already accumulated with existing ODR providers, as opposed to a government-led approach to building a new platform from scratch. As many of us know, government-run technology projects can be quite challenging.

Perhaps it would also be possible to create a hybrid where some of the components or elements of existing platforms are integrated or configured to work within a government-created or administered platform. These innovations may be realistic because we are not burdened to creating static, bricks-and-mortar infrastructure. 

In terms of cost, it will be a big challenge to create and administer a system that doesn't end up being too expensive, either for the responsible government authorities or for the users. In our environment of resource scarcity, it will be quite important to avoid creating new expensive services that governments have to fund directly. Also, keeping in mind that consumer disputes can involve relatively small amounts of money, it won't be easy to pass on operating costs to users through things like filing fees.

Hopefully, we will be able to identify some solutions to these challenges as this work progresses.

Thanks,

Darin 

Josep, I suppose the short explanation  is that the Directive and Regulation are focused on  ADR in its broader sense and not just mediation and its higher dependence on confidentiality and privilege. Consumer ADR in Europe has so far weighed heavily towards adjudication/arbitration. ODR may help raise the mediation profile by reducing cost/increasing access.

As to the specifics of confidentiality, the Commission would probably say that it is not the role of this Directive /Regulation to regulate the mediation process itself  We already have in Europe a Mediation Directive and a European Code of Conduct for Mediators.  The objective is to create awareness and improve access. It is key to the legislation that the issues of standards will be left t the individual member states and the orgs responsible within them

A recently proposed amendment to the ODR Regulation is to extend its remit to cover claims by traders against consumers. This was objected to by many States including the UK. I argued for this extension because of the growing problem of adverse consumer reviews. See my blog on this subject at http://www.modria.com/business-reputation-threat/  What do others think of this extension? Should it be included?

Dear Josep,

 

You have raised very interesting points.

 

I completely agree with you that private and public ADR/ODR providers will need to work together, though I suspect that because of the mandate in the Directive initially, at least in some jurisdictions, we may initially see more public providers being accredited. But, in time, once start-ups crack how to make profitable B2C ODR models, private providers will take over. Perhaps even a few big providers will fight for the EU market.

 

In terms of the trustmark, you definitely know this market better than I do, but so far they haven’t proved to be a magic bullet. Maybe, with the exception of Confianza Online in Spain. Indeed, this initiative suggests that a trustmark with some institutional support (e.g. INC or European Commission) may bring more credibility and achieve a critical market –key factors for their success.

 

Confidentially is important in ADR, but in typically the low-value ODR may, as you noted, need to be balanced with transparency. A concern may appear when the same neutral is allocated to the same businesses that participate as repeat players. Procedural disclosures, transparency, and diligent accreditation mechanisms should be put in place to minimise potential forum shopping and conflict of interests. Also the neutrals’ degree of access to the information exchanged between the parties during the negotiations has not yet been decided. One possibility is that neutrals could have full access to the negotiation stage, while yet another would be to allow an exception at the request of one of the parties in order to respect the confidentiality of the negotiations. This approach responds to the traditional judicial and arbitral systems, where parties are granted complete confidentiality in their negotiations.  Confidentiality in the negotiation seeks, on one hand, not to discourage parties from disclosing evidence or settlement proposals that may be used against them in the adjudicative process, and, on the other hand, ensures that the perception of the adjudicator is not coloured by parties’ discussions and admissions of liability. Taking into consideration that ODR in this context aims to ensure an expeditious and efficient resolution of low-value disputes, the confidentiality of the negotiations could also be limited; but in if such approach is followed, then parties should at all times be notified of the level of confidentiality of the ADR/ODR process.

 

Un saludo,

 

Pablo

 



Josep Suquet said:

Dear Pablo and all,

 

Thank you very much for organising this discussion forum on such an interesting topic.

As to the questions, in my opinion I would think that the ODR platform could perhaps leave room for private or public initiatives. This could benefit competition. It could also be a good effort for improving interoperability among private/public entities.

I also understand that trustmarks may help users to participate in the platform.

Moreover, I’d like to raise another issue regarding the confidentiality principle in the current EU Proposals on ODR/ADR (not privacy). On the one hand, the Regulation Proposal only refers to the national rules on confidentiality for ODR facilitators and ADR entities. On the other, the Directive Proposal does not contain as such the principle of confidentiality. In the B2C domain it seems that there are some tensions between confidentiality and a key principle in this domain such as transparency. However, the principle of confidentiality has always been considered a key principle in a mediation process (i.e., Mediation Directive, Green Paper on ADR) and sometimes it is regulated as a principle in a consumer mediation process (i.e, Consumer Code in Catalonia). The question that I would like to raise to the forum is then: Should there be any confidentiality requirements in the B2C ADR/ODR?

Thank you very much, 

Josep 

Thanks Darin, very good points. Absolutely agree with your post. Let me pick up on the point that there should be some sort of cooperation between the Platform and private entities. It seems to me that if the Platform will allow for standard claims and responses, they should also facilitate the direct negotiation between the parties, á la UNCITRAL, though as you pointed institutional systems tend to be less effective. Perhaps the answer will be on cooperation as you suggested.

 

You are right, cost will be a major challenge, particularly in building a system like the EU intends to tackle, which does not only aim at low-value e-commerce disputes (even though these may form the majority of complaints). Perhaps, traders will be willing to pick up the bill (as long as this is proportionate), but they will only do so if the find a value in ODR. While reviews and trustmarks could play a role, in the EU there are already various sectors where traders are legally required to be linked to ADR (e.g. banking, mail services, electricity, telecoms, etc). This may expand in the future to new sectors, such as public transport, particularly to airlines.

 

Regards,

 

Pablo



Darin Thompson said:

Challenging questions, Pablo!

In terms of your first question about who the providers should be, a couple of factors that may influence the outcome will be usability and cost. 

In terms of usability, it would be prudent to build on the knowledge and practical expertise already accumulated with existing ODR providers, as opposed to a government-led approach to building a new platform from scratch. As many of us know, government-run technology projects can be quite challenging.

Perhaps it would also be possible to create a hybrid where some of the components or elements of existing platforms are integrated or configured to work within a government-created or administered platform. These innovations may be realistic because we are not burdened to creating static, bricks-and-mortar infrastructure. 

In terms of cost, it will be a big challenge to create and administer a system that doesn't end up being too expensive, either for the responsible government authorities or for the users. In our environment of resource scarcity, it will be quite important to avoid creating new expensive services that governments have to fund directly. Also, keeping in mind that consumer disputes can involve relatively small amounts of money, it won't be easy to pass on operating costs to users through things like filing fees.

Hopefully, we will be able to identify some solutions to these challenges as this work progresses.

Thanks,

Darin 

Graham,

My understanding is that the Commission wanted to set minimum legal standards for B2C ADR -i.e. bringing the EC Recommendations 1998 and 2001 into hard law, in order to ensure a minimum level of 'due process' for the provision and accreditation of ADR providers.

I think that the ADR Directive already mentions the Mediation Directive, but arguably, it should have distinguished between consensual and adjudicative processes. That said, it looks like in the B2C context, these distinctions are blurring, particularly in processes like ombudsman schemes.

Regards,

Pablo 


Graham Ross said:

Josep, I suppose the short explanation  is that the Directive and Regulation are focused on  ADR in its broader sense and not just mediation and its higher dependence on confidentiality and privilege. Consumer ADR in Europe has so far weighed heavily towards adjudication/arbitration. ODR may help raise the mediation profile by reducing cost/increasing access.

As to the specifics of confidentiality, the Commission would probably say that it is not the role of this Directive /Regulation to regulate the mediation process itself  We already have in Europe a Mediation Directive and a European Code of Conduct for Mediators.  The objective is to create awareness and improve access. It is key to the legislation that the issues of standards will be left t the individual member states and the orgs responsible within them

Very thought provoking, but I still wonder how traders are going to manage to convince consumers to become respondents after the dispute arises. A trader threatening to take legal action for libel in a case of an unfair review could really persuade a consumer to participate in ODR?

Pablo



Graham Ross said:

A recently proposed amendment to the ODR Regulation is to extend its remit to cover claims by traders against consumers. This was objected to by many States including the UK. I argued for this extension because of the growing problem of adverse consumer reviews. See my blog on this subject at http://www.modria.com/business-reputation-threat/  What do others think of this extension? Should it be included?

Pablo- the ODR I have proposed in my blog would be an independent expert review  that could be posted below the original consumer review as part of the response by the trader (most review sites allow for the trader's response) and so  did not require participation by the consumer.  As to mediation, it is more in the consumer's interest  that he is offered a very low cost online mediation than to be taken to court for libel where he may be disempowered by lack of funds to fight the claim.

Graham

I did a blog also on the EU Regulation which can be read here 

I also attach a paper I wrote on the subject as an addendum to the final Report of the EMCOD project on Measuring Justice in ODR.

Attachments:

Dear Pablo, 

Thanks for your commentaries on confidentiality.

You have raised a very interesting issue regarding trustmarks. I agree with you that they are not magic bullets but they may help in promoting ODR. As you know currently trustmarks remain largely nationally-based. However, without any public intervention what do you think it could happen in the middle run: do you think this will continue as it is or do you think that private trustmarks could initiate a move towards a European-wide approach? It seems to me the last option would happen only if private entities see an economic benefit, and therefore the question is whether there is a market for low-cost B2C European conflicts. Another option would be a regulatory approach. As you say, some institutional support (European Commission) may bring more credibility and achieve a critical market. According with your experience with the Commission, do you think that the ODR Proposal could have also included some rules for the establishment of a generic European-wide trustmark, or do you think that the European Commission could later on address this issue?

Thanks!

Josep

Pablo Cortes said:

Dear Josep,

 

You have raised very interesting points.

 

I completely agree with you that private and public ADR/ODR providers will need to work together, though I suspect that because of the mandate in the Directive initially, at least in some jurisdictions, we may initially see more public providers being accredited. But, in time, once start-ups crack how to make profitable B2C ODR models, private providers will take over. Perhaps even a few big providers will fight for the EU market.

 

In terms of the trustmark, you definitely know this market better than I do, but so far they haven’t proved to be a magic bullet. Maybe, with the exception of Confianza Online in Spain. Indeed, this initiative suggests that a trustmark with some institutional support (e.g. INC or European Commission) may bring more credibility and achieve a critical market –key factors for their success.

 

Confidentially is important in ADR, but in typically the low-value ODR may, as you noted, need to be balanced with transparency. A concern may appear when the same neutral is allocated to the same businesses that participate as repeat players. Procedural disclosures, transparency, and diligent accreditation mechanisms should be put in place to minimise potential forum shopping and conflict of interests. Also the neutrals’ degree of access to the information exchanged between the parties during the negotiations has not yet been decided. One possibility is that neutrals could have full access to the negotiation stage, while yet another would be to allow an exception at the request of one of the parties in order to respect the confidentiality of the negotiations. This approach responds to the traditional judicial and arbitral systems, where parties are granted complete confidentiality in their negotiations.  Confidentiality in the negotiation seeks, on one hand, not to discourage parties from disclosing evidence or settlement proposals that may be used against them in the adjudicative process, and, on the other hand, ensures that the perception of the adjudicator is not coloured by parties’ discussions and admissions of liability. Taking into consideration that ODR in this context aims to ensure an expeditious and efficient resolution of low-value disputes, the confidentiality of the negotiations could also be limited; but in if such approach is followed, then parties should at all times be notified of the level of confidentiality of the ADR/ODR process.

 

Un saludo,

 

Pablo

 



Josep Suquet said:

Dear Pablo and all,

 

Thank you very much for organising this discussion forum on such an interesting topic.

As to the questions, in my opinion I would think that the ODR platform could perhaps leave room for private or public initiatives. This could benefit competition. It could also be a good effort for improving interoperability among private/public entities.

I also understand that trustmarks may help users to participate in the platform.

Moreover, I’d like to raise another issue regarding the confidentiality principle in the current EU Proposals on ODR/ADR (not privacy). On the one hand, the Regulation Proposal only refers to the national rules on confidentiality for ODR facilitators and ADR entities. On the other, the Directive Proposal does not contain as such the principle of confidentiality. In the B2C domain it seems that there are some tensions between confidentiality and a key principle in this domain such as transparency. However, the principle of confidentiality has always been considered a key principle in a mediation process (i.e., Mediation Directive, Green Paper on ADR) and sometimes it is regulated as a principle in a consumer mediation process (i.e, Consumer Code in Catalonia). The question that I would like to raise to the forum is then: Should there be any confidentiality requirements in the B2C ADR/ODR?

Thank you very much, 

Josep 

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