A global solution for on-line consumer disputesi

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2009 International Workshop on ADR/ODRs

A global solution for on-line consumer disputesi
Zbynek Loeblii

The ADR.EU Center of the Czech Arbitration Court prepares its new project to provide a quick and inexpensive solution to on-line consumer-related disputes within the European Union and beyond (Project).

The ADR.EU Center of the Czech Arbitration Court (ADR.EU) administers the alternative dispute resolution (ADR) process which is used to settle disputes around .eu domains. Since 2006, we have administered over 1,000 .eu ADR cases after being authorized by EURid (.eu Registry) and the European Commission. Proceedings are managed in 21 of the 22 official EU languages using an innovative on-line platform. Decisions are made by a team of panelists recognized experts in intellectual property and internet law covering every country in the European Union.
At the ADR.EU, we have also created the first electronic only process for the administration of UDRP complaints relating to gTLDs (available at www.adr.eu). The UDRP on-line platform provides for each user an electronic master file of all disputes in which it is involved, enables users to use a simple authentication tool called a Chess Card and includes a number of other on-line dispute resolution (ODR) services. ADR.EU administers also disputes relating to .cz and .co.nl domains.

I. Scope of the Project
We are considering a scheme that would extend the remit of the ADR.EU to the on-line administration of multi-lingual consumer disputes relating to internet transactions within the European Union and in other parts of the world. We want the costs of the dispute resolution to be kept low so that it can be used by anyone making an internet purchase and the process to be fast – ideally less than one month.
The system may be developed in such a way to inable also resolution of off-line consumer disputes. We expect that the Project will include resolution of general consumer disputes as such and will also provide resolution of specific consumer disputes (e.g. disputes related to suspected counterfeited products or disputes regarding financial services). The focus will be on cross-border consumer disputes or disputes in multi-lingual environments.

1. Way of dispute resolution
Our idea is to provide a quick and inexpensive solution that is effective across borders featuring an initial “self-resolution” process (i.e. amicable resolution of the dispute among its parties by mutual communication using the on-line platform) followed by expert mediation and arbitration.
We are prepared to consider other innovative ways of dispute resolution like the quasi-jury system (i.e. dispute resolution by a group of selected users which need not be lawyers). The aim of the Project is to implement a flexible solution adaptable for different types of disputes.

2. Multi-lingual functionality
Each dispute will be administered and resolved in the appropriate languages of the parties, with a summary of the decision being published on-line in English.
Our approach will be to adopt standardized messages describing almost all the procedural situations which can occur during a consumer dispute. Our standardized set of messages will grow organically, language by language, as the number and type of disputes increase. At all times, our priority will be to keep it simple so that an internet-user sitting at home has the confidence to use the system for even a small internet transaction which has gone wrong.
We plan to organize a pilot of the system in 3-4 countries and languages (one of the languages being English) for 6-12 months after initial development to get user feedback and to complement as much as possible our initial set of standardized messages. We believe, based on our experience with .eu disputes, that it is possible to step by step build a comprehensive database of standardized communications of the parties to a dispute that would respond to all or almost all needs of the parties, no matter in which country they are located.
Consumer disputes are incomparably more diverse than domain name disputes but we think that if we are successful in attracting large number of users of the system we will be able to implement a comprehensive enough set of standardized forms and messages also for majority of consumer disputes.
Our platform will enable the parties of a dispute to search for similar decisions and in this way get a preliminary view of possible outcomes. ADR.EU will also be preparing regular reviews of decisions according to the main types of consumer disputes. Our goal is to enable the parties to resolve as many disputes as possible by their mutual communication, without involvement of panelists or mediators. Such usage of the on-line platform should be free of charge for consumers. It also means that a large majority of disputes should be administered automatically, without the involvement of individual case administrators.
The system will benefit from its implementation not only in EU but globally. The fact that there are many differences in national laws on consumer protection in the world is certainly an important factor, but it also creates a substantial opportunity and benefit for the system we plan to develop: as mentioned above, our focus is to provide an on-line platform which would encourage the parties to resolve their dispute amicably as they see fair and appropriate. For the parties in such cases the differences in national laws would perhaps become less important.

3. Financial sustainability after launch
Businesses offering on-line transactions will be eligible to participate. They will be charged a low annual subscription fee – likely to be around €100 - and in return they can carry a Trust or Quality Mark to demonstrate that they have opted into the scheme. As this mark will in time be recognized by consumers as a “mark of quality” that can be trusted, we hope businesses who subscribe will benefit from increased sales and client loyalty.
Trust Marks may not be a viable option for a number of on-line providers, for differing reasons. Such providers may prefer building-in our system into their websites and becoming themselves virtual ODR providers vis-a-vis their customers, customizing our system according to their needs and business strategies. The development of our system will take into account such possibilities.
Internet is becoming more and more multi-lingual and on-line providers begin to look at multi-lingual cross-border sale applications. Our system would form a useful and important supplement to such cross-border on-line business applications and thus should address business needs of the on-line providers and their customers who shop across borders.
If consumers encounter difficulties with enforcement of arbitration or mediation decisions, the right to use the Trust Mark and the system would be withdrawn. The proceeds from the subscription fees will form the financial basis for the on-going funding of the system.

4. Marketing
We think that the success of the Project lies in successful global marketing. We would like to involve in the marketing of the Project entities which will benefit from its successful implementation. When we considered only EU-wide scope, we have started to prepare the following marketing channels:

  • through the European Commission and the network of national consumer protection centers in EU member states;

  • through large Internet players like eBay or Microsoft who would support the Project;

  • through European business associations;

  • through national domain name registries in Europe which would inform their registrars and the registrars would inform their registrants of domain names about the Project. The Project should support more active usage of domain names in Europe which is key for the registries and registrars.

The entities involved in marketing of the Project will be able to participate in the Supervisory Board of the Project and be more actively involved in Project planning and strategy development.

5. Organization Infrastructure
The ADR.EU Center will be capable to select arbitrators and mediators with appropriate language capabilities of multiple European languages and to administer disputes in these languages in Europe.
Should similar centers be accredited within the Project within Europe and/or other parts of the world? Should the accredited ADR Centers be inter-connected to ensure the sharing of information on decisions, updates on the standard forms etc? These questions will be discussed in the initial stages of the Project.

6. Project Planning
At the moment ADR.EU is finalizing its budgetary preparations. ADR.EU plans to start the Project at the beginning of 2010. We envisage a 2 year development and implementation process including the pilot project, after which the new on-line platform should be prepared for launch in EU and also in few countries outside EU (e.g. in India).

i Recommended citation: Loebl, Zbynek, (2009). «A global solution for on-line consumer disputes», 2009 Internacional Workshop on ADR/ODRs. Building bridges: legal framework and principles. Universitat Oberta de Catalunya (UOC), Internet Interdisciplinary Institute (IN3), September 15, 2009. http://www.uoc.edu/symposia/adr/ [online academic paper]

ii External general counsel, ADR.EU (zbynek.loebl@adr.eu).

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