What is Online Dispute Resolution in the UK?

If you find that your business is in a dispute, you may come across different ways of handling that dispute. Some common methods include arbitration and litigation (going to court). However, these can be time-consuming and expensive to deal with a dispute. As a result, you may want to explore online dispute resolution (or ODR) options. This article will explain what ODR is, how it differs from normal dispute resolution, and when you can benefit from using ODR.

What is Alternative Dispute Resolution?

ODR is often referred to as a form of alternative dispute resolution (sometimes known as ADR). Alternative dispute resolution refers to a range of ways of resolving a dispute without going to court. It usually involves a third party, and some examples include mediation and arbitration. 

Mediation is the process where an impartial third party mediator helps you try to negotiate a settlement with the other party. Arbitration is an alternative to going to court and involves an independent arbitrator deciding on the dispute between the parties. 

What is Online Dispute Resolution?

Put simply, ODR is a type of dispute resolution that uses technology (such as the internet or digital software) to carry out the dispute resolution process. ODR uses a mixture of online tools, such as confidential discussion rooms on platforms like Zoom and Microsoft Teams. In addition, it usually involves an independent third party, who will assist in the dispute resolution process.

When Should I Use ODR?

ODR may be appropriate for a consumer complaint if the complaint is:

• low in value;
• high in volume;
• cross-border; or
• between different users on the internet.

This is because the benefits of ODR are that it does not require you to meet the other person online. Therefore, it is a quick and easy way of resolving a dispute without looking for an ADR entity to offer a more thorough process. 

Moreover, online dispute resolution has lower costs. However, online technology or online arbitration does not always replicate the level of detail that that in-person dispute resolution would. As a result, engaging in ODR makes sense if you can solve the key issues in the dispute through an online negotiation.

What Are the Disadvantages of ODR?

ODR can be a cost-effective way of dealing with consumer disputes. However, it is also still in its early stages and has some disadvantages.

First, ODR can be inaccessible to those who do not have a stable internet connection or cannot navigate technology, such as an ODR platform. This means that you cannot always rely on ODR as your main source of dispute resolution. This is because it is inaccessible to some consumers. 

Second, ODR systems can also be vulnerable to privacy breaches. Because ODR operates entirely online, there is a risk that a party can access information exchanged as part of an ODR which is supposed to be confidential. 

Additionally, in a cross-border dispute, you may find difficulties in dealing with language differences on your ODR platform. In this vein, it can also be difficult to enforce an ODR decision because you will have little correspondence with the other party beyond the online platform. 

Finally, there can also be issues with ODR being viewed as a biased way of dealing with the dispute. Because ODR service providers are usually for-profit businesses, the trader or the consumer can sometimes feel as if the system is skewed against them. 

Key Takeaways

ODR is a dispute resolution method focused on resolving a dispute using online technology, such as an online mediation or online arbitration process. 

ODR can be a good way of resolving your dispute if you are dealing with consumer complaints concerning smaller payments. Further, if you would rather deal with it online instead of meeting face to face, ODR can help you save time and cut costs in otherwise expensive dispute resolution processes. However, ODR is mostly suitable for businesses frequently dealing with online transactions, such as e-commerce businesses. 

At the same time, ODR can be limiting to some consumers, especially those who: 

• are uncomfortable with using online technology; or 
• do not have a stable enough internet connection. 

ODR can also be a disadvantage if it would be useful to meet the other party in person or if there are confidentiality and privacy concerns. If you need help with a business dispute, our experienced disputes lawyers can assist as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents. Call us today on 0808 196 8584 or visit our membership page.

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