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COMMENT: The rise of ODR pathways for consumers in Europe

* Published as part of the 2023 CoI conference: 'Towards just institutional approaches to conflict prevention and resolution' *

 

 

Introduction


Individual consumers increasingly purchase their goods and services through online intermediary platforms: a new second-hand dress through Vinted, a novel through Amazon marketplace and vitamin pills from their favorite influencer through Instagram. When such purchases result into a dispute, the consumer often struggles with achieving redress for such small-value claims. 

 

This blog is about the rise of ODR pathways in Europe as a response to the ongoing challenge in safeguarding consumers’ access to justice. In response to this ongoing challenge, online dispute resolution (ODR) avenues have mushroomed in the past decades. Where ADR can lower the barriers to access justice by taking procedures out of the court, online dispute resolution (ODR) can lower the barriers even further by taking the procedure from the physical into the virtual space. The field of cODR is going through important developments throughout Europe, since novel ODR providers are entering the field and a growing number of ADR bodies rely on digital technologies to resolve complaints. There exists a multitude of ODR bodies, developed along different styles, designs and utilizing a range of distinct technologies. While some ODR bodies merely function as communication platforms, other bodies offer an end-to-end online process using algorithmic-based assessment tools that help in drawing up outcomes.

 

The development towards the application of technology in dispute resolution procedures fits with the more general development of the digitization of justice in Europe. The increased interest in ODR relates to its potential to increase access to justice by centralizing the procedure online, especially with regard to small value claims and cross-border disputes. 

 

The EU legislative framework on ODR


The potential of ODR has also caught the eye of the EU legislator. In 2013, it adopted the complementary ADR Directive and the ODR Regulation the ADR Directive 2013/11 and the ODR Regulation 524/2013 which envisions the EU-wide ODR platform. As of July 2023, the European Commission is undertaking a revision of this ADR/ODR framework, so we will for instance await to see whether the ODR platform will develop into more than a mere referral tool of consumer complaints. With the Digital Services Act (DSA) - which recently came into force on 27 October 2022 and will apply from February 2024 onwards – we will likely see a whole new realm of ODR bodies arising in Europe under the auspices of the DSA. Hence, the DSA entitles users of platforms to select a certified ODR body to address decisions issued by the internal complaint systems.

 

ODR and access to justice


ODR is thus often embraced for its potential to increase access to justice. Certainly, this potential cannot be neglected; ODR enables parties to log-in to procedures from the comfort of their own home, saving costs and time related to travel; it offers tailor-made and guided online procedures simplifying the redress journey for consumers; it automatically enforces decisions. Technology can facilitate access to information by means of creating intuitive and user-friendly interfaces. At the same time, ODR evokes several challenges to access to justice. Private ODR platforms largely decide disputes in the ‘shadow’ of the law; they design their procedures and enforce their guidelines with the main incentive of ‘efficiency’ rather than of ‘quality’, in turn challenging key principles such as transparency and legitimacy. 

 

Furthermore, when involved in full online procedures, parties rarely know who is behind their decision (a human or an algorithm?) and parties are often bargained into a sub-optimal settlement. While the issue of digital divide is becoming smaller since nowadays almost everyone has access to the Internet in some way, the question arises whether a new digital divide is arising. This refers to access to the type of technology. Think of an individual consumer logging in to ODR from their personal laptop sitting in their home where children are running in the background, having connection issues and having a webcam and audio-system which is rather old. The counter-party is a large trader, who has the newest software in place, a high-quality webcam and audio surround system, a stable internet connection and a peaceful office from which he can participate in the procedure. This new digital divide can increase the challenges for accessibility to redress mechanisms, but also for equality of arms between less digitally skilled consumers and stronger traders. Furthermore, the command of technical tools and the knowledge of the digital dimension can also widely differ between parties making less tech-savvy citizens vulnerable in the digital world. 

 

Access to justice does not only entail access to a dispute resolution body to seek redress, but also entails the right to a procedure that complies with standards of fairness. Parties need to have a chance to be heard and need to be granted the opportunity to give their voice. In using ODR with the aim to enhance access to justice, safeguarding access to ODR is thus not the only important aspect, but also safeguarding that ODR upholds a certain level of quality. The EU legislator already shows increased attention for the quality of ODR procedures by laying down quality standards and putting in place monitoring systems.

 

This presentation aims to present an overview of the current trend of ODR procedures, to identify the potential and challenges against the background of access to justice and to present recommendations on how to secure the quality of ODR.

 

Emma van Gelder is an assistant professor at the department of Civil Law (Molengraaff Instituut voor Privaatrecht, at Utrecht University. She defended her PhD in November 2022. She wrote her PhD on consumer online dispute resolution pathways in Europe at the Erasmus University Rotterdam within the ERC Project ‘Building Civil Justice’. Her research interests include ODR, access to justice and civil procedure. She teaches in the Master Private Law and the Master Law and Technology.