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As an electronic commerce brand selling to customers, there may be times when you and your customers disagree on an issue, which creates an online dispute. For example, your customers may consider that their products from their online transactions could function better than they did. Alternatively, you may provide consumers with a service they believe to be poor.
One way to resolve a consumer dispute for online purchases and avoid court proceedings is to offer alternative dispute resolution (ADR). You should be aware of some rules about this dispute resolution mechanism for your online business, such as those for cross-border disputes. This article explains how an alternative dispute resolution process works for online businesses.
What is Alternative Dispute Resolution?
Alternative Dispute Resolution (ADR) is a method for resolving commercial disputes, which includes consumer ones. It is an option to consider to avoid a business dispute reaching the commercial litigation stage.
As an eCommerce business owner, you will likely want to resolve your commercial dispute outside court. Court litigation can be a costly process in terms of the following:
- finances;
- your time; and
- the reputation of your business.
ADR is a way to resolve your disagreement with your consumer through a partial and neutral body. The person will decide for you or help you and your client agree on a way forward. There are different types of ADR you may choose to use as an online business, which include:
- mediation
- adjudication;
- conciliation; and
- arbitration.
What Are My Legal Obligations for Alternative Dispute Resolution as an Online Business?
As an eCommerce business, you should be aware of the Alternative Dispute Resolutions Regulations, which contain some rules on ADR.
This guide sets out how to set up, finance and grow an online business in the UK.
You are only legally obligated to use ADR for consumer disputes if your eCommerce business is in a sector that requires it, such as financial services or energy services.
However, there are still some legal obligations you have to comply with. These include:
- letting your customers know the details of a certified ADR service; and
- advising your customers on whether the above is a certified ADR service you intend to use.
A helpful place to provide these details to your online customers could be in your terms and conditions or on the customer service section of your website. However, you are not legally obliged to provide these details on your website or your terms and conditions. Instead, once you and your customer are in a dispute which you cannot resolve, you must let them know these details, such as in a:
- email; or
- letter.
What is Certification of ADR?
As you are legally obligated to provide details of a certified ADR, it is helpful to understand what this is. A certified ADR provider is one that meets a good level of standards which is consistent with other ASDR providers. This means they meet specific characteristics in terms of their:
- skills;
- independence; and
- impartiality.
The Alternative Dispute Regulations 2015 ensures that all types of businesses, including eCommerce businesses in any sector, can access these ADR providers. This is important as sometimes consumers can access these for free, so they may wish to use them for a consumer dispute with you. They will likely want to access them as they know they will not show bias. Also, they should look at the consumer dispute on its merits as an individual case.
What is the ODR Platform?
A further obligation regarding ADR is specific to you as an eCommerce business. This refers to the ODR online platform for alternative native dispute resolution.
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Key Takeaways
Alternative Dispute Resolution (ADR) is a range of methods for resolving commercial disputes, such as those with your consumers. It includes, for example, mediation and arbitration. As an eCommerce brand, you have legal obligations in terms of ADR. Regardless of whether you wish to use this dispute resolution method, you must let your customers know information about this. You must let them know a certified ADR provider and whether or not you plan to use them.
As an online business, you must also provide a link to the ODR platform on your website. This platform helps you and your customer in a dispute when you are in different countries. Even if you have no customers overseas, you must still provide this.
If you need help understanding how alternative dispute resolution works for online businesses in the UK, LegalVision’s experienced eCommerce 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 for a low monthly fee. So call us today on 0808 196 8584 or visit our membership page.
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