The Legal And Institutional Framework Of Online Dispute Resolution (ODR)

The explosive expansion of the use of the internet makes it possible for businesses to expand their markets and render services to a large group of e-consumers. While offline transactions can lead to various types of disputes, the same is true for online transactions. In other words e-commerce transactions will sometimes result in e-disputes.


Technology has brought about profound and irreversible impact on communication. Online dispute resolution can be defined as the use of applications and internet networks for resolving disputes with Alternative Dispute Resolution methods. It uses technology to facilitate the resolution of disputes between parties.

Online Dispute Resolution (ODR) is a wide field, which may be applied to a range of disputes; from interpersonal disputes between consumers or marital separation and interstate conflicts. Thus ODR is a different medium for resolving disputes with respect to due process principles.

At this particular point in time there is not yet any empirical evidence of cross-border consumer e-disputes, but with the increase in the number of cross-border e-commerce transactions all around the world, there will be increase in the number of e-disputes.

In the developing nations there isn’t much going on at the national levels on the legal and institutional framework of ODR. However, this is not the case on the international level.

The United Nations Commission on International Trade Law (UNCITRAL) has been recognised as the core legal body of the United Nations system in the field of international trade law. UNCITRAL’s business is the modernization and harmonization of rules on international business.

The Commission has six working groups to perform the substantive preparatory work on topics within the commission’s programme of work.  The working group III is responsible for Online Dispute Resolution. They have been working on issues connected with the preparation of legal standards on ODR since year 2010, it is however yet to come out with any legal framework.

On the July 8, 2013 “The ODR Regulation (Regulation 524/2013) came into force in the European Union (EU). The regulation provides for the EU Commission to establish a free, interactive website through which parties can utilize alternative dispute resolution (ADR) in connection with online transactions. The use of ODR will require the consent of the parties to the transaction.

Member States in the EU must bring into force the legislation to comply with the ODR regulation, which, for the most part, took effect in January 2016. Under the ODR regulation, the European Commission established an ODR platform – the ODR website offering a single point of entry for consumers and traders seeking to resolve disputes out of court.

The Online Dispute Resolution has been accessible to consumers and traders as at the 15th day of February 2016.

In order for the ODR mechanism to be successful, the platform must meet the strict criteria of being user friendly; have the capacity to translate the complaint while providing strict confidentiality and protection of personal data.

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