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Online Dispute Resolution: Introduction

Introduction (Online Dispute Resolution)

Introduction

Given the rise of e-commerce, consumers have shown their preference for online transactions. Online Dispute Resolution (ODR) is the application of information and communications technology to the prevention, management, and resolution of disputes. ODR emerged in the mid-1990s as a response to disputes arising from the expansion of e-commerce due to its environment with significant numbers of transactions and interactions, where relationships are easily formed and easily broken, seemed likely to generate disputes in which parties would be unlikely to solve the problem face-to-face. ODR is needed, especially in e-commerce transactions, because it gives the consumer a voice. While anger may fuel a consumer's initial email or phone call regarding a purchase problem, consumers generally do not follow up after receiving no reply or facing long hold times with customer service phone lines. ODR ensures consumers are heard and receive closure to their problem. 

ODR is a more accessible, efficient, and low-cost means for consumers to obtain remedies online, regardless of their socio-economic status. Currently, a majority of consumers forgo legitimate claims, thereby allowing companies to avoid responsibility to their customers and hide improprieties from the public eye. For every 1,000 purchases, households in the highest status category voice complaints concerning 98.9 purchases, while households in the lowest status category voice complaints concerning 60.7 purchases. Consumers in lower socioeconomic status groups often become accustomed to poor treatment and have lower expectations regarding the quality of their purchases and their ability to obtain remedies if problems arise. Stereotypes and biases through traditional means make assumptions about the other based on race, gender, and age. Additionally, given the cost of arbitration or court, it is unlikely for many complaints to be pursued without ODR as an option. Furthermore, consumers and sellers are busy, and with ODR they both can file a claim at any time online, whereas small claims court and arbitrations take place during the day time when people are typically working. 

Several companies and local governments have responded by creating ODR platforms. Enforcement of these ODR decisions is done through ratings, chargebacks, and direct enforcement. This research guide's purpose is to assist attorneys and consumers about the importance of ODR, availability of ODR, and concerns and benefits of ODR. ODR is the fastest growing area of dispute resolution and is an essential topic to learn more about. 

Scope

This guide provides resources relating to the need for ODR, the relationship between ODR and access to justice, how ODR works, concerns and benefits of ODR, examples of public entities and companies that have implemented ODR, ODR software, and the international reach of ODR.

Getting Started: Secondary Sources and Current Awareness Tools

Given the recent development and nature of ODR, case law and treatises are not good places to begin research. Rather, law review articles and public websites are a better place to begin learning about ODR. Additionally, there are blogs so attorneys and consumers may keep up to date and informed about ODR. 

Conclusion

As the Internet continues to overtake traditional methods of shopping, it is clear consumers would also like the Internet to replace other traditional forms of face-to-face communication, including those about disputes. It is important for attorneys to know about ODR options to advise clients and for consumers to know their options of both the courtroom and ODR. 

Disclaimer

This guide has been created by Theresa Mullineaux in support of Professor Diamond's Advanced Legal Research class for Fall 2016. The contents of this guide should not be taken as legal advice or as the work product of Mizzou Law librarians.

Sample ODR Process

Concerns about ODR

There are some concerns about ODR:

•Online communication has become too nasty or offensive
•Could diminish empathy and foster misinterpretations
•Internet security
•Capacity for algorithms to deliver justice
•May not know ODR is available
 
Most of these concerns have been fixed by ODR platforms. A 'digital trail' is created on ODR platforms which presents opportunities to monitor and prevent nasty or offensive language. Some ODR platforms allow for videoconferencing, so that parties can see and interpret more clearly what the other side is saying. Additionally, all platforms claim to be hacker and virus proof. Research has shown that algorithms are more fair than traditional means of dispute resolution, as human error is significantly reduced or eliminated through the algorithms. Finally, knowledge about ODR can be increased through marketing efforts by companies. 

Benefits of ODR

There are many benefits of ODR:

•Very good for low-dollar claims because of its ease and efficiencies
•For all claims, it lowers the costs and burdens of pursuing complaints so all consumers feel comfortable and able to seek assistance
•Relative anonymity and comfort of communicating through a computer or smartphone also may ease some of the social and power pressures of face to face communication
•Helps go beyond online review and blog sites by providing substantial remedies
•Also helps businesses as consumers won't lose patience and respect for companies’ sense to its customers
 
Market fairness is increased through the use of ODR. Through research, it has been shown that ODR helps consumers who fear stereotypes or biases based on appearance. Research also shows it is easier to retain current customers than it is to find new customers as it is roughly five times harder to attract new customers than to retain current ones.