ONLINE DISPUTE RESOLUTION : SOME REFLECTIONS ON LAW AND PSYCHOLOGY Workshop: Arbitration & Psychology Brunel University, London 24 May 2013 Dr Pablo Cortés.

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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 I. Online Dispute Resolution II. Recent legislative initiatives: – Consumer ADR Directive and ODR Regulation – UNCITRAL Draft ODR Rules III. 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

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

Part II: Recent Legislative Initiatives  Challenges in the growth of ODR UNCITRAL Draft ODR Rules EU Initiative to enhance consumer redress: 1. ADR Directive 2. ODR Regulation

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

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 1. Negotiation 2. Facilitation 3. Arbitration (second track only) Enforcement of outcomes

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

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

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

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

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

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

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