Feb 17, 2015

Online Dispute Resolution: Is the eBay Model the Way Forward?

A recent report by the Civil Justice Council has highlighted the fact that bringing low value claims in the current court system is too costly, too slow and too complex, and the means by which to overcome this could be by establishing a new internet based court system modelled on other such online dispute resolution systems as those used by companies such as eBay. This new online system will be known as Her Majesty's Online Court (HMOC).

We have previously reported on the Government's plans to introduce a controversial and widely opposed rise in the cost of issuing money claims (see news post). In short, the proposal seeks to levy an issue fee equivalent to 5% of the value of the claim value on all money claims between £10,000 - £199,999. Issues fees of £200,000 or above will be capped at £10,000. The proposal also seeks to encourage electronic filing by offering a 10% discount on issue fees on money claims between £10,000 - £99,999.

The remit of Advisory Group to the Civil Justice Council was to explore the viability of an Online Dispute Resolution (ODR) in civil disputes with a value of less than £25,000.

The recommendations presented by the report are that HMOC should provide a three tier service as follows:

  • Tier 1 - Provides an online evaluation and information service which enables individuals to classify and categorise their grievances as well as understanding available remedies.

  • Tier 2 - Provides an online facilitation service which would include mediation and negotiation without the involvement of judges.

  • Tier 3 - Provides for full and part time members of the judiciary who will decide relevant parts of a case online via electronically submitted papers and where required, telephone conferencing.

The Civil Justice Council hold eBay's dispute resolution method as an example of good practice in terms of managing capacity and functionality. eBay, it transpires, resolves an incredible 60 million disagreements between its traders every year using their version of an ODR through structured negotiation between parties at first instance. Should that process fail, then eBay offers a resolution service whereby both parties present their arguments and an eBay member of staff determines a binding outcome under its Money Back Guarantee.

eBay also offers resolution to disputes stemming from negative reviews through a third party company called Net Neutrals.

Whilst there are many lessons to learn from such online platforms as Ebay with regard to handling high volume dispute resolution, the report identified the fact that over one fifth of the population (22%) do not currently use the internet. An ODR that is purely online may deprive many from being able to access justice.

In addition to that, our recent article on the ongoing threat of cyber-crime highlights the ease and consistency at which institutions may be targeted. It is entirely feasible that such online systems would be an enticing target for cyber-attackers or 'hacktivists' and would necessitate costly mechanisms for protecting data.

In the foreword of the report, Lord Dyson, Master of the Rolls, praises the foresight of the report but tempers his praise by saying:

'It is important that we get this right…A system linked to the court service would provide reassurance for all users…There will be a lot of work to be done, but I have no doubt that ODR will play an important role in the future of civil justice'.

Posted by: in: Civil Procedure, Consumer Law, Digital/Tech, Legal News, News

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