Online Dispute Resolution (ODR) Platform for Electronic Commerce

Our E-Arbitration-T Project Online Dispute Resolution (organized by Eduardo Paz Lloveras and funded by the European Commission in 2000) was the first approach for an online dispute resolution mechanism for electronic commerce matters. (See The origins of E-Arbitration-T concept )

In 2013, the European Commission launched directive on alternative dispute resolution for consumer disputes which seeks to encourage traders and consumers to participate in these out-of-court mechanisms for resolving disputes. The directive does not give a consumer the right to force a business to use alternative dispute resolution procedures, although member states remain free to make participation mandatory.

In order to encourage the use of such mechanisms, the directive requires member states to ensure that these procedures are available where both parties agree to use them to resolve their dispute. The directive further provides for the establishment of entities to mediate disputes initiated by consumers against traders.
The directive does not deal with disputes initiated by traders or disputes between traders, and only applies to traders established in the EU and consumers resident in the EU in relation to contractual obligations stemming from sales or services contracts, both online and offline. The scope of the directive excludes health care services, public providers of further or higher education, and non-economic services that are performed for no economic consideration.
There is also an dispute resolution for online purchases. EU Regulation 524/2013 on online dispute resolution for consumer disputes entered into force in January 2016, and applies directly in all member states. The regulation obliges the EU Commission to set up a European-wide online platform specifically designed to help consumers seek redress if they have a problem with online purchases.

The Commission has indicated that the platform will be operational as from February 15 and it will be accessible through HERE.
The scope is to create a a single point of entry for consumer and traders alike, free of charge and fast.

The most important facts for traders and consumers:

  • The ODR Platform is an interactive and multilingual platform specifically designed for assisting consumers who have a complaint about goods or services they have bought online.
  • Consumers or traders, when agreeing to ODR, must complete an electronic complaint form, made available on the ODR Platform.
  • The parties then decide which ADR entity shall be competent to settle their contractual dispute. The ADR entities are bodies that comply with the binding quality requirements established by the ADR Directive and which are included in the national lists of ADR bodies.
  • The selected ADR entity shall handle the case entirely online and reaches an outcome within 90 days. The legal value of the decision of the ADR entity will depend on the form of ADR chosen (mediation, arbitration, conciliation, etc).
  • What do I need to do as an online trader?:As a trader engaging in online sales or service contracts with consumers and established within the European Union you will have to inform consumers about the existence of the ODR Platform as well as the possibility of using the ODR Platform for resolving your disputes.

More specifically, keep the following requirement in mind:

  • You must provide on your website(s) an electronic link to the ODR Platform and your own e-mail address. That link must be easily accessible for consumers.
  • If you make commercial offers to consumers via e-mail, similar information should be included in the e-mail.
  • The information shall also be provided in the general terms and conditions applicable to online sales and service contracts.

ICC International Court of Arbitration, number of cases jumped from 599 in 2007 to 663 in 2008

ICC International Court of Arbitration Secretary General Jason Fry described the last year as challenging. “This year can be best described as a period of consolidation. Mr Fry highlighted ICC’s new Hearing Centre in Paris, which opened for business in October 2008. Available for hearings, whether ICC, ‘ad hoc’ or under the auspices of other arbitral institutions. the Hearing Centre, the first of its kind in Paris, was proving to be very successful.

The Court’s Secretary General emphasized the importance of the anticipated information technology system upgrade, which would allow the Secretariat to keep track in real time of the status of each case, this is part of an entire review of priorities and procedures internally and externally with a view to delivering a quality service.

The ICC International Court of Arbitration‘s work load continues to increase at a fast pace. The number of cases registered jumped to 663 last year from 599 in 2007. In addition 407 awards were rendered in 2008, compared with 349 in 2007, while there were 1,317 cases pending compared with 1,285 at the end of the previous year. The new Hong Kong office of the Court was up and running, with some 100 cases already registered.

ICC seminar on resolving disputes in space and aeronautics industries

ICC will hold a seminar on resolving disputes in the space and aeronautics sectors. The conference Dispute Resolution in Aeronautics and Space will take place on 5 February under the auspices of the ICC International Court of Arbitration. It will address three main themes: risk management; the impact of financing on enforcement and repossession strategies; and the methods available for resolving disputes. The conference will identify the specific risks in the aeronautics and space industries, taking into consideration recent developments in this sector; notably the increase in air traffic, new types of material, more innovative technologies and the development of new airline companies. Given these risks, one session will also be devoted to the importance of insurance and re-insurance.

The conference will also delve into dispute resolution in the industry, covering issues such as litigation B2C, secrecy obligations and dual purpose technology, and their impact on dispute resolution proceedings. The range of procedures available to resolve disputes – such as state court procedures and international commercial arbitration – will be addressed.

The conference will be held at the ICC Secretariat in Paris and will be conducted in English and French. Simultaneous translation will be available. Space is limited, and a discount will be offered to members and non-members of ICC who enroll by 12 January.

Dispute Resolution doing business in China

Rapid change has taken place in China since 1978 when Deng Xiao Ping led plans to re-establish a judiciary and a legal system. Since then, there has been a systematic attempt to legislate in all areas and to create and promote a judiciary and legal profession – now 150,000 strong – for the country’s population of 1.3bn.

What can a foreign party expect in relation to dispute resolution when doing business in China? If a dispute arises, negotiation is the best initial method of resolution. Most business contracts in China will include a clause requiring negotiation before other dispute settlement mechanisms are pursued. Negotiation might require attempts to enlist the help of local government officials by emphasising the importance of the foreign company’s investment.

If negotiation fails, it is arbitration that has for many years been the preferred method of resolution for foreign-related commercial disputes in China. Arbitrators have, at least until recently, been more experienced and better qualified in the subject matter than judges, and procedures have been more flexible and predictable. Arbitration also has the advantage of finality, in that awards are not subject to appeal whereas court rulings may result in a lengthy appeal process. Continue reading Dispute Resolution doing business in China

ICC International Court of Arbitration launches Young Arbitrators Forum YAF in a conference in Barcelona

ICC International Court of Arbitration is hosting a weekend conference in Barcelona 27 to 29 June for lawyers and in-house counsel under the age of 40. The conference marks the launch of the new Young Arbitrators Forum YAF by ICC to strengthen links with the young arbitration community. The conference will be held in collaboration with the YAF US chapter.

Jason Fry, Secretary General of ICC International Court of Arbitration said that the ICC Court is delighted to welcome young arbitration practitioners and corporate counsel to learn from some of the worlds most distinguished arbitrators and professionals. This is the first of what we hope will be an ongoing programme of events tailored to the new generation of arbitration professionals. Continue reading ICC International Court of Arbitration launches Young Arbitrators Forum YAF in a conference in Barcelona

Dispute resolution in business partnerships

One of the most nettlesome challenges business partners face when entering into a new venture is selecting an appropriate dispute resolution mechanism.

The topic is inherently difficult for many entrepreneurs and executives because it requires them to address the possibility of failure at the outset of a relationship they necessarily believe will succeed. As a result, many joint venture associates and business partners simply gloss over the issue, refusing even to address it.

If their clients are willing to listen, many lawyers offer the standard list of dispute resolution mechanisms: arbitration, mediation and buy/sell arrangements, also referred to as Russian roulette or Texas shootout provisions. Continue reading Dispute resolution in business partnerships

Alternative dispute resolution in IT matters, in UK

Daniel Djanogly was interviewed by ITweek, UK about experts in alternative dispute resolution are a popular way to resolve disputes between conflicting parties in technica cases:

So what exactly is expert determination and how does it differ from other methods?

This is one of a number of private dispute resolution methods collectively referred to as alternative dispute resolution (ADR). Other ADR methods include arbitration and mediation.

In expert determination an independent expert is asked by the disputing parties to decide one or more issues between them. The experts are required to use their knowledge and experience to reach a decision based on their own investigation of the issues. The experts must act fairly and the parties must agree to be bound by the decision.

In England and Wales arbitration is supported and controlled by the Arbitration Act 1996, which supports the enforceability of arbitration awards locally and internationally. There is no similar statutory involvement in expert determination.

In arbitration, fairness is formalised by the Arbitration Act. The arbitrator can only undertake an investigation if permitted by the parties and must share the results with the parties. Unlike the arbitrator, the expert is not immune from actions for negligence. In mediation, the mediator helps the parties arrive at their own settlement.

Are there particular types of dispute that suit expert determination?

Expert determinations tend to be applied to technical disputes. The expert is usually chosen for their expertise. The types of dispute for an accountant acting as expert include: share/business valuation disputes; disputes in relation to completion accounts; deferred consideration disputes following a sale of a business; profit share disputes in partnerships and joint venture agreements; and disputes about the loss of profits from breach of contract.

There can be numerous subsidiary disputes in connection with facts and the interpretation of words, which may be outside the expertise of the expert.

Together with other procedural considerations, the expert may need to agree arrangements to enable these matters to be dealt with in a way that does not lead to the validity of his award in respect of the substantive issue(s) being undermined.

How are appointments as expert made and what happens if no agreement can be reached?

A dispute resolution clause may be included in a contract, for example in a sale and purchase agreement for a company, which requires that an expert is appointed to resolve the dispute by expert determination.

If the parties to the agreement have not named the expert, or they are unable to agree on an expert, the contract may provide that the appointment is made by the president of a particular professional body from among its members.

Alternatively, there may be no pre-existing contractual provision for the appointment of an expert to determine the dispute. The parties may decide to use expert determination to solve the dispute.

How does the whole process work and what can the parties expect in terms of fees?

The initial stage of an expert determination assignment involves completion of the engagement formalities and agreement of the expert’s powers. The expert will check whether these are sufficient and, if not, seek to agree those necessary to fulfil their mandate. Continue reading Alternative dispute resolution in IT matters, in UK

Mediation in civil and commercial matters: European Parliament endorses new rules

Mediation in civil and commercial matters European Parliament endorses new rules

A Directive on certain aspects of mediation in civil and commercial matters was adopted today 23 April 2008. The purpose of the Directive is to facilitate access to cross-border dispute resolution and to promote the amicable settlement of disputes by encouraging the use of mediation and by ensuring a sound relationship between mediation and judicial proceedings. The Directive is one of the follow-up actions to the Green Paper on alternative dispute resolution presented by the Commission in 2002, the other being the European Code of Conduct for Mediators established by a group of stakeholders with the assistance of the Commission and launched in July 2004.

Welcoming the adoption of this Directive, Vice-President Jacques Barrot said: “This Directive fulfils the political objective established in October 1999 by the European Council of Tampere, which – in the context of encouraging better access to justice in Europe – called for the creation of alternative, extrajudicial procedures for dispute resolution in the Member States. Mediation can provide cost-effective and quick extrajudicial resolution of disputes in civil and commercial matters through processes tailored to the needs of the parties. Agreements resulting from mediation are more likely to be complied with voluntarily and help preserve an amicable and sustainable relationship between the parties.

The Commission proposed the Directive in October 2004 (IP/04/1288). The Directive facilitates recourse to mediation by strengthening the legal guarantees accompanying it, thus giving real added value to citizens and businesses in the European Union. The key components of the Directive are as follows:

The Directive obliges Member States to encourage the training of mediators and the development of, and adherence to, voluntary codes of conduct and other effective quality control mechanisms concerning the provision of mediation services.

The Directive gives every Judge in the Community, at any stage of the proceedings, the right to suggest that the parties attend an information meeting on mediation and, if the Judge deems it appropriate, to invite the parties to have recourse to mediation.

The Directive enables parties to give an agreement concluded following mediation a status similar to that of a Court judgment by rendering it enforceable. This can be achieved, for example, by way of judicial approval or notarial certification, thereby allowing such agreements to be enforceable in the Member States under existing Community rules. Continue reading Mediation in civil and commercial matters: European Parliament endorses new rules

Colin Rule PayPal’s Director of ODR interviewed by Practical eCommerce

Colin Rule PayPal’s Director of ODR interviewed by Practical eCommerce

¿How, exactly, PayPal resolves disputes between ecommerce merchants and their customers? Colin Rule, PayPals Director of Online Dispute Resolution was intervied by Practical eCommerce magazine:

Practical eCommerce (PeC): If an ecommerce customer pays for a legitimate product using PayPal and then decides he doesn’t like it and complains to PayPal, what will PayPal do?

Colin Rule: In cases where the buyer is simply disappointed in the item, we would encourage the buyer to work directly with the seller. PayPal does offer buyer protection, but this protection covers buyers for items that they didn’t receive and for items that are significantly not as described. It does not cover cases where the buyer is merely disappointed with the item or where the item did not meet the buyer’s expectations.

Practical eCommerce (PeC): What are a merchant’s options if a customer asks PayPal to hold payment?

Colin Rule: If a merchant does get a chargeback, a couple pieces of information can be extremely helpful to dispute it. Proof of delivery, such as online tracking offered by both USPS and UPS, can be critical evidence in reversing the chargeback. A copy of the buyer’s signature confirming receipt can also be extremely effective. Finally, if a merchant did refund the buyer at any point in time, proof of the refund (and/or the shipment of a replacement item) is important.

Practical eCommerce (PeC): What other options are available to merchants to address disputes?

Colin Rule: Again, we always encourage buyers and sellers to first try to work through disputes together. To help with that, we’ve launched the dispute resolution center – a step-by-step system designed to facilitate communication between the buyer and the seller in order to get resolution of the issue. Since launching PayPal Dispute Resolution, buyer claims against sellers decreased by 50 percent, and seller losses on PayPal due to chargebacks decreased 20 percent.

If the dialogue with the seller fails to produce a satisfactory result, the buyer can then escalate the dispute into a claim, where our claims specialists gather information from both parties, examine the case and work with both parties to try to fairly and efficiently resolve the claim. In this process, PayPal will ask sellers for documentation that helps us determine that they shipped the item to the buyer and that the item was as described. Continue reading Colin Rule PayPal’s Director of ODR interviewed by Practical eCommerce