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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.