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Dr Pablo Cortés Senior Lecturer School of Law University of Leicester

ONLINE DISPUTE RESOLUTION : SOME REFLECTIONS ON LAW AND PSYCHOLOGY Workshop : Arbitration & Psychology Brunel University, London 24 May 2013. Dr Pablo Cortés Senior Lecturer School of Law University of Leicester. Outline. Online Dispute Resolution Recent legislative initiatives:

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Dr Pablo Cortés Senior Lecturer School of Law University of Leicester

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  1. ONLINE DISPUTE RESOLUTION :SOME REFLECTIONS ON LAW AND PSYCHOLOGYWorkshop: Arbitration & Psychology Brunel University, London 24 May 2013 Dr Pablo Cortés Senior Lecturer School of Law University of Leicester

  2. Outline • Online Dispute Resolution • Recent legislative initiatives: • Consumer ADR Directive and ODR Regulation • UNCITRAL Draft ODR Rules • Psychology could inform the development of incentives to encourage, when appropriate: • Participation in the dispute resolution process • Amicable settlements when appropriate • Out-of-court enforcement

  3. Part I: What is ODR? • Generally referred as ADR + ICT • The fourth party in the dispute • ODR is often the only option for dealing with e-commerce disputes, especially when they are: • cross-border • low value • high volume • occurred online • A few success stories

  4. Part II: Recent Legislative Initiatives • Challenges in the growth of ODR • UNCITRAL Draft ODR Rules • EU Initiative to enhance consumer redress: • ADR Directive • ODR Regulation

  5. UNCITRAL Draft Rules on ODR • UN Commission for International Trade Law (UNCITRAL) has the goal of developing int. law to facilitate int. trade. • December 2010 UNCITRAL WG III issued first draft Rules on ODR (current draft of Dec 2012) • The Rules will be complemented by • Enforcement protocol • Requirements for third neutrals and ODR Providers • Substantive law principles

  6. UNCITRAL Draft Rules on ODR • Scope of application: • low-value • cross-border • e-commerce • Language will be the one employed in the contract • Multi-step process in a two track system • Negotiation • Facilitation • Arbitration (second track only) • Enforcement of outcomes

  7. EU Initiatives: 1. Consumer ADR Directive • Coverage: • Availability of ADR entities (public or private) in all the MS of the EU • Scope: contractual consumer complaints arising from the sale of goods and provision of services in the EU * Exclusion of claims brought by traders against consumers and claims related to health services and higher education

  8. Cont. Consumer ADR Directive • Legal standards • Expertise, Impartiality and Independence • Transparency • Effectiveness • Fairness (incl. the principles of liberty and legality) • Information obligation (and penalties for non-compliance) • Traders must inform when adhered to an ADR entity • ADR entities must inform about their own procedures

  9. 2. ODR Regulation • ODR Platform • Hub for e-commerce complaints • Online traders will be required to include a link • Complaints forms in all the EC languages • Link parties to approved ADR entities • Case management tool • Managed by the ODR advisors from ECCs

  10. Part III: Psychology and Incentives • To ensure the participation in ODR • Traders will always make a cost-analysis • Mandatory in specific sectors • Online label or trustmark • Feedbacks and reviews • Rank down by online browsers • Judicial cost penalties

  11. Incentives • To ensure an early and amicable settlement • Effective online negotiation tool that manages parties expectations and facilitates proactive communications • Pyramidal approach • Consumer bespoken information on their rights • Publication of model cases • Couple with effective adjudication • e.g. Arbitration or ombudsmen schemes • Saving the fees of adjudication

  12. Incentives • To ensure out of court compliance of final decisions and arbitral awards • Public enforcement agencies should have access to the information inserted in the ODR Plat • Links to e-Justice –i.e. fast-track online judicial processes, e.g. ESCP and collective redress options • Collaboration with payment providers in the enforcement of awards • Chargebacks • Black-lists/Reviews

  13. Conclusion • Shift from developing judicial protection to building ODR structures that provide consumers with real and tangible redress • There is a gap on socio-legal research for online arbitration • This is because there is a lack of successful initiatives • The new legal framework aims to remedy this by promoting the use of ODR • Future empirical analysis will be instrumental in helping to design more efficient and fair online processes

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