DJN Blogs

Anugra Anna Shaju, National University of Advanced Legal Studies, Kochi
Date: 12.06.2021
DEVELOPING A SYSTEM OF ONLINE DISPUTE RESOLUTION (ODR) IN INDIA
What is Alternative Dispute Resolution (ADR)?
ADR is the resolution of disputes outside courts. It is
cost-effective than traditional court proceedings and ensures faster disposal
of cases. It also has the additional benefit of ensuring that parties have a
chance at ensuring a fair deal beneficial for all parties concerned and helps
avoid uncertainties associated with court procedures and processes. It is a consensual
process, both parties should agree to the use of ADR in case of disputes or there
must be a clause in the contract between the parties specifying ADR as a means
to resolve disputes in case it arises.
ADR is also flexible and can be molded to suit the
parties’ issues and needs. There are different methods of ADR that can be used
according to the time, issues involved etc. The whole process can be customized
according to the kind of dispute or to meet the specific needs of the parties.
The need to turn to the use of ADR or alternate means
of settling disputes was especially highlighted during the pandemic when the
functioning of courts was put on halt. Given that justice delayed is justice
denied and because of the cost-effectiveness of ADR, the legal system as well
as public and private sectors, all have to promote ADR in the country.
Most importantly, ADR process helps address the issue
of long backlog of cases and will ensure timely justice. The pandemic further
worsened the deficiencies and problems of the legal system. With 4.5 million
cases pending in high courts, 31 million cases pending in district courts and
350,000 backlogs in the top 5 central tribunals, ADR or ODR is a very suitable
option and good alternative in the country.[1] It
eases the burden on the Indian judicial system and has become an important
option to consider given the pandemic.
The different forms of ADR practiced in India are:
·
Arbitration:
Here an independent third party considers the facts and law involved in the
issue and gives a decision. The decision rendered by the arbitrator is called
an arbitral award and is binding on the parties.
·
Mediation:
Here the third party helps the parties find solutions acceptable for both by making
the parties concentrate and communicate the issues of concern between them. The
results are not binding and the parties may or may not find a solution.
·
Conciliation:
Here the independent third party provides or suggests solutions that may be
acceptable to both the parties. So the third party points out solutions that
may resolve the dispute between the parties and reach a mutually acceptable
outcome.
·
Negotiation:
Here the parties who have opposing interests engage in discussion so as
to reach a compromise or find a solution.
What is Online Dispute Resolution (ODR)?
Technology is being harnessed in every sector from
farming to the education sector. The pandemic necessitated everything to shift
online including ADR. Anyhow, all the processes involved in ADR from pre-action
to final decision and resolution of costs are possible in the online mode also.
ODR can be said to be the use of online technologies,
including information and communications technology in resolving disputes
between parties. It is a dispute resolution process administered through and
with the help of online technologies.
ODR is widely used by retailers to solve complaints of
their clients. For example, eBay entirely uses ODR for resolving disputes
between buyers and sellers on their platform.[2] Paypal
also resolves their disputes online.[3]
Online transactions are increasing in India and ODR is an efficient mechanism
to resolve disputes arising in the online space as they would ensure faster and
fairer dispute resolution.
Some of the most convenient and effective ODR platform
in India right now are CADRE (Centre for Alternate Dispute Resolution
Excellence), SAMA, CODR (Centre for Online Dispute Resolution) and AGAMI.[4]
However, like every other thing, ODR also has its own
advantages and disadvantages.
·
Advantages
of ODR:
“Online Dispute Resolution (ODR) has the potential to decentralize,
diversify, democratize, and disentangle the justice delivery mechanism” –
Justice DY Chandrachud
There is no doubt that traditional court processes are
time consuming and expensive. ODR is the one solution for this problem, coupled
with the ability to deal with the huge backlog of cases and issue of delayed
justice in the Indian legal system, the advantages of developing an ODR culture
in the Indian legal system are unimaginable.
ODR makes access to dispute resolution possible, it
makes the process accessible, affordable and participative. In a traditional
court process, often court fees along with lawyers’ fees and other procedural
necessities, not to mention time lost in deciding cases adds huge burden on the
parties. The cost of these processes blocks access to legal remedies and makes
redress processes inaccessible to parties. The time as well as money lost in
the process would make one doubt if the aggrieved person actually got justice. ODR
processes help save a lot of time with frequency and length of each proceeding
decided according to the parties and their issues and they also helps save
money as they take shorter time periods to reach an outcome.
ODR method is perfect to resolve disputes between
parties separated by physical distance, they remove geographical barriers. It
allows virtual simultaneous presence of all the parties without needing
personal attendance at a particular place and time. The parties can be located
anywhere and still participate in the proceedings in the comfort of their home
or office. This would also save costs involved in transportation or
accommodation to attend court or dispute resolution proceedings.
Storage and collection of data and documents are
easier in ODR. ODR allows the recording of oral or visual communications,
statements and pleadings that can be stored as digital records. It also allows
easy exchange of documents through emails or other communication channels and
helps avoid costs like postal charges if the documents were to be sent in hard
copy.
ODR provides a very suitable means to resolve low
value, simple disputes as well as high value, complex disputes. The flexibility
in procedures and processes that can be used allows this. The procedures and
processes are non-afflicted with rigors of rules of procedures and can be
tailored according to the parties and the dispute at hand, the sessions can be
flexible.
The effectiveness of ODR in the country is inarguable.
For instance, Udaan, India’s largest B2B platform was able to resolve over 1800
disputes in one month using ODR, and each dispute took an average of 126
minutes.[5]
·
Disadvantages
of ODR:
ODR has been referred to as “rough justice”.[6] This
is because there aren’t any procedural protections like in the court. This
limits justice, ODR helps with dispute resolution but the justice granted is
limited and could be unfair to the party who would have got a better outcome if
the issue was before the court. In ODR the focus is on fast and speedy
resolution of disputes, often fairness or justice elements are minimal.
Lack of proper standards, guidelines and even lack of
training of people using ODR mechanisms is a problem. The people involved and
the parties concerned in the dispute should be aware of the tools used in the
process for the ODR system to be effective.
This requires training and skill development of people. With increased
popularity and use, ODR is forcing people not used to technology also to adopt
it. The digital divide and the digital infrastructure in the country is a
problem. Not everyone has access to digital infrastructure or internet
services. These situations make the widespread use and promotion of ODR
worthless.
There is also the need to develop the software used
with changing needs and time. This requires updating of technology from
time-to-time. It is important to ensure that the software and platforms are
user-friendly and secure, data protection and privacy is a worry here as the
proceedings would involve exchange of confidential documents or settlement
agreements. Adequate confidentiality cannot be ensured and there are chances of
the data getting hampered.
Chances of having misunderstandings between the
parties and the arbitrator or third party are high in ODR. There is no face-to-face
interaction in the process and the credibility of the parties or the arbitrator
cannot be ensured. There can also be difficulties in judging the accountability
of witnesses and evidences.
Things to Consider While Developing ODR Systems in the
Country:
It is important to ensure complete access to the ODR
systems and platforms. The dispute resolution process and system should
facilitate and not limit access to justice. This calls for development of
adequate accessible, user-friendly, effective and secure platforms to conduct
ODR processes. They should be developed according to the procedural requirements and
obligations to the parties. There should also be means for the parties to
authenticate themselves and a system to manage the case log. The technology
should also be regulated to prevent abuse. People involved in the dispute
resolution should learn about the tools in the process and be aware of how to
use the ODR platforms. Training programs are required to ensure this, teaching
ODR technologies should be part of the movement to promote ADR in the country.
It must be ensured that the proceedings are conducted by competent people with
sufficient skills and training to ensure that effective solutions are found to
the dispute at hand. Honesty, neutrality and impartiality of the third party are
also very important components in ADR and ODR. So for people to develop trust
in the system, it should have relevant technological and human competency.
The system should be such that it is not arbitrary and
there should be some accountability in the system. The parties should have
adequate safeguards so that they are not exploited. There should be transparency
in the system and it should be run in accordance with legal obligations. The ODR systems need to be accountable to the
legal system and the parties.
There should not be any bias or benefits for any of
the parties involved in the resolution process. All participants in the process
should be treated equally and fairly, no one should be in an unfavorable
position or at a disadvantage in getting justice because of the system as the
ultimate aim of developing ODR it to ensure justice to all.
The state should also play a role in developing and
promoting ODR in the country through incentive mechanisms and policy stimulus.
Private ODR and ADR providers need to be promoted so that they reach
industries, locations and different parts of the country and support public
institutions. Also like Justice Indu Malhotra said, ODR
should be made compulsory in specific categories to scale its use.[7]India currently has the opt-in
model while Italy has an opt-out model. The difference is that in India, the option
of trying out ADR or ODR in case of disputes is voluntary while in Italy the
parties have to attend at least one session and decide whether to opt-out. In
India a hybrid model of the two may work.
The
Sikri Panel Report:
A
committee headed by Justice A.K. Sikri (Retd) has prepared a report to the
Prime Minister’s Office to suggest measures to advance access to justice
through ODR.[8]
The report has made recommendations for an umbrella legislation for ODR and
have also suggested mandatory pre-litigation mediation for certain categories
of disputes such as family, inheritance and consumer issues.
Promotion of ODR by NITI Aayog:
NITI Aayog has launched an ODR handbook in association
with Agami and Omidyar Network India and with the support of ICICI Bank, Ashoka
Innovators for the Public, Trilegal, Dalberg, Dvara, NIPFP.[9] It is
a great stride towards promoting ODR in the country and an invitation to
business leaders to adopt ODR. The handbook brings out the idea that disputes
can be resolved seamlessly from anywhere, by anybody at a fraction of the cost
and time incurred by traditional mechanisms.
Justice Chandrachud while launching the handbook held
that questions regarding the efficacy of such a system are no longer
theoretical as though there are things to improve and issues to resolve, the
system as it stands does work. The
Justice pointed out that though organizations have been pushing for it and
using it for far longer than virtual courts, substituting every dispute
resolution process with ODR is not possible until there is digital penetration
and literacy everywhere in India. So he argued for stronger digital penetration
and literacy to make ODR possible in every dispute.
NITI Aayog had also held a virtual meeting with key
stakeholders in the judiciary, government, industry and policy in 2020 to
promote ODR in India.[10] The
aim of the meeting was to have a multi-stakeholder agreement
to catalyse ODR in India and
achieve a sustainable, efficient and collaborative manner for the
transformation of justice delivery in the country.
ODR and ADR:
ODR and ADR are not much different. The only
difference between them is that most procedures in one is done online
while in the other, it is done
offline. So ODR is the online
equivalent of ADR. They share
the same practice, theory and ethical foundations, ODR stems from ADR. After
all ODR is the integration of technology into ADR. The ultimate aim of both the
processes is to ensure justice with efficiency and without any delays.
There also exist differences between them. ADR was
largely developed by academics, lawyers, judicial officers, government agencies
and non-profits.[11]
On the other hand private sectors play a much greater role in developing and
promoting ODR. This is because they have the resources to develop appropriate
technologies to suit their requirements and can maintain them. Technology
changes fast and it is important to be up to date to ensure a fair and smooth
ODR process, this could be why most innovations in terms of the technology
itself as well as in formulating guidelines and rules have been looked into by
private sectors. The private sector is also playing a huge role in promoting
and popularizing the ODR systems through conferences, discussions, innovations
etc. However, people are wary about the profit motivation or revenue-generating
opportunities related to ODR and in developing ODR platforms that might have
made private parties active in the ODR system.
It is pertinent to note that ODR is the future of ADR.
With everything from shopping to studies happening online, the ADR process also
has its own place online. This however does not mean that there won’t be
offline dispute resolution or ADR processes. Anyhow ODR is a great means for
the ADR process to become commonplace and grow. There is no doubt that ODR
would allow ADR to expand and grow to its fullest potential.
Conclusion:
The ODR process is on its way to find its own place in
the justice and legal system in the country. It will provide a new justice
system soon. This will be enhanced through the collaborative and effective
efforts of the legal system and the public as well as private players. Now what
is required is to ensure quantitative as well as qualitative improvements along
with increased usage and participation. Their usage especially in the public
sectors, as a subset of the traditional courts is required. The improvements
should focus on making the process and system more efficient and of better
quality. The development of ODR should be such that it ensures fair resolution
of disputes and improves access to justice.
[1] Karan Singh, Online Dispute
Resolution (ODR): A Positive Contrivance To Justice Post Covid- 19, Mondaq (Apr. 13, 2021, 11:00 PM), https://www.mondaq.com/india/arbitration-dispute-resolution/935022/online-dispute-resolution-odr-a-positive-contrivance-to-justice-post-covid-19.
[2] ADR and ODR – what’s the
difference?, DisputesEfiling (Apr.
13, 2021, 11:00 PM), https://news.disputesefiling.com/2019/06/11/adr-and-odr-whats-the-difference/.
[3] Karan Singh, Supra, at 1.
[4] Id.
[5] Online Dispute Resolution’s
Role Critical during Covid-19 Pandemic: Justice DY Chandrachud, PIB Delhi, Apr. 10, 2021, https://pib.gov.in/PressReleaseIframePage.aspx?PRID=1710900.
[6] Colin Rule, Is ODR ADR?,
3(1) International Journal on Online Dispute Resolution 8, 10 (2016).
[7] Samaya Dharmaraj, Boosting
online dispute resolution in India, OpenGov
(Apr. 13, 2021, 11:00 PM), https://opengovasia.com/boosting-online-dispute-resolution-in-india/.
[8] Sanya Dhingra, National platform,
new law — how Sikri panel wants online dispute resolution to work, The Print, Apr. 13, 2021, https://theprint.in/india/governance/national-platform-new-law-how-sikri-panel-wants-online-dispute-resolution-to-work/590560/
[9]NITI Aayog to Launch Online Dispute
Resolution Handbook on Saturday,
PIB Delhi, Apr. 9, 2021, https://pib.gov.in/PressReleasePage.aspx?PRID=1710646#:~:text=ODR%20is%20the%20resolution%20of,negotiation%2C%20mediation%2C%20and%20arbitration.
[10] Samaya Dharmaraj, Supra, at
7.
[11] Colin Rule, Supra, at 10.
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