EVOLUTION OF THE INTERNATIONAL LEGAL FRAMEWORK (EU & UNCITRAL) Key Incentives for the Success of ODR Schemes ODR Forum 2013 Montreal Cyberjustice Laboratory, Université de Montréal, June 2013 Dr Pablo Cortés Senior Lecturer School of Law University of Leicester

Outline I. Recent legislative initiatives: – Consumer ADR Directive and ODR Regulation – UNCITRAL Draft ODR Rules II. The development of incentives to encourage, when appropriate: Participation in the dispute resolution process Amicable settlements Out-of-court enforcement

Part I: UNCITRAL Draft Rules on ODR  December 2010 UNCITRAL WG III issued first draft Rules on ODR (current draft of May 2013)  The Rules will be complemented by  Enforcement protocol  Requirements for third neutrals and ODR Providers  Substantive law principles

UNCITRAL Draft Rules Scope of application: – low-value disputes (incl. B2B, B2C, and C2C) – cross-border – e-commerce Multi-step process in a two track system 1. Negotiation 2. Facilitation 3. Adjudication/Arbitration Enforcement of outcomes Track I and Track II

EU Initiatives: Consumer ADR Directive Coverage: – Availability of ADR entities (public or private) – 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 Minimum legal standards – Expertise, Impartiality and Independence – Transparency – Effectiveness – Fairness – Liberty – 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

ODR Regulation  ODR Platform  Hub for e-commerce complaints in all the EC languages  Slightly different scope: consumers may be respondents when allowed by the gov where they habitually reside  Online traders will be required to include a link  Connects parties with nationally approved ADR entities  Case management tool  Managed by the ODR advisors from ECCs

Two different institutional approaches to support the use of ODR  UNCITRAL:  Model ODR procedure that parties can contractually opt in.  Scope: low-value cross-border disputes (B2B and B2C)  Substantive law: TBC but respecting mandatory law  ODR Platform/s starts with online negotiation.  No other links to enforcement agencies  EU:  Sets up ODR Platform to co- ordinate ADR/ODRs in the EU  Scope: contractual disputes from sales and services (B2C only)  Substantive law: EU acquis while respecting mandatory law  EU ODR Platform operates more like a Clearing-house  Links to public enforcement agencies and possibly with e- justice

Part II: 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  Consumer bespoken information on their rights  Publication of model cases  Couple with effective adjudication  Saving the fees of adjudication

Incentives  To ensure out of court compliance of final decisions  Public enforcement agencies should have access to the information inserted in the ODR Plat  Links to e-Justice  Collaboration with payment providers  Black-lists  Reviews

Conclusion Shift from developing judicial protection to building ODR structures that provide consumers with real and tangible redress The success of ODR will depend on Assisting in the development of ODR infrastructure Effective quality control mechanisms for neutrals and ODR providers, esp. once the private industry develops Imbedding incentives for ensuring participation/settling/compliance