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Online Dispute Resolution

Online Dispute Resolution (ODR) is often referred to as a form of alternative dispute resolution that takes advantage of the speed and convenience of the internet as well as information systems (it includes both arbitration and mediation as well as other alternative dispute resolution methods).

The European Union promotes the online resolution of disputes between consumers and businesses through the European Online Dispute Resolution Platform in accordance with European Regulation 524/2013

E-Commerce

A large number of ODR Systems are concerned with resolving consumer disputes arising from e-commerce transactions which are concluded over the Internet. E-commerce has gained immense recognition and nowadays cross-border transactions occur daily. As a result, differences arise regularly between parties who are at a distance from each other.

Resolving such disputes through the courts, in most cases, is a disproportionate and expensive process, as it includes, among other things, court costs, travelling costs etc.

In addition, disputes usually involve low value purchases, such as the purchase of books, music and other consumer goods, and therefore the costs of litigation are significantly higher than the amount of the dispute.

Online Mediation

Online mediation seems to be the main ODR method for small consumer disputes. There are four advantages in choosing online mediation:

  • First, the process is flexible. The mediator essentially uses his skills to assist the parties in communicating and finding their own solution.
  • Second, the fact that participation in the process is voluntary, means that once the process begins, the chances of finding a solution are high.
  • Third, the result of the process is not limited to refunds. Online mediation allows parties to find creative solutions to their dispute. For example, a consumer complaint could be resolved with a significant discount from future purchases, or by offering new products.
  • In concluding, some consumer disputes, especially those arising from low-value e-commerce transactions, are better viewed through the lenses of good customer service than as a matter of who is right and who is wrong.

Practices and Benefit of ODR

Currently, all ODR systems are based on the consent of the parties. In almost all cases, consent is provided through dispute resolution clauses concluded electronically. On US merchant websites, for example, there are online arbitration clauses and the ability to file a complaint through an ODR platform (see, for example, Ebay/Esasa/Amazon platforms). ODR is only offered as an additional tool for resolving the dispute and the parties are not obliged to use it.

Considering that in relation to low value disputes the main benefits of the trader are a) maintaining the customer relationship and b) the minimization of complaints, then ODR offers the opportunity to traders to resolve their disputes  economically and fast and prior to them escalating out of proportion. With the development of technology and in particular the ease of access to the internet, the parties and the mediator increase the possibility of creating a climate of trust and therefore the prospect that the process will offer value to both the business and the consumer.

The Cyprus Consumer Center for Alternative Dispute Resolution is an Entity approved by the Consumer Protection Service, notified to the European Commission which enables consumers and businesses to resolve their disputes easily, quickly and confidentially.

This article does not constitute legal advice.

The publication of this article is co-funded by the European Union’s “Consumer Programme (2014-2020)”.

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