The Global Trend

Global e-commerce is growing at a rate of 20% per year. There were more than 50 billion e-commerce purchases globally in 2017, which means that in 2018 there will be 60 billion or more. Studies have shown that approximately 1% to 3% of e-commerce transactions generate a dispute, so that means there were about 1 billion global e-commerce disputes in 2017, and that number will continue to grow at the same rate as e-commerce grows.

Large e-commerce marketplaces have responded to this growth in disputes by building their own redress processes. In 2004, eBay launched the Resolution Center, which has since resolved hundreds of millions of disputes. Similarly, the Chinese e-commerce giant Alibaba also has an ODR-based resolution process that processes an even greater volume of cases. Even sharing economy companies like Airbnb and Upwork have integrated Resolution Centers into their marketplaces to provide quick and efficient resolutions to any problems that arise. And not all redress processes look the same: the TaoBao online marketplace in China has resolved millions of disputes through a crowdsourced resolution process which utilizes online juries.

But relying on each individual marketplace to build effective redress is not enough. Many e-commerce transactions take place outside of large marketplaces, and individual merchants do not have the resources to build robust ODR systems. National consumer protection authorities have dealt with consumer complaints regarding cross-border e-commerce purchases since the late 1990s, but they had no effective way to pursue these cases to resolution. As a result, momentum has built behind international proposals to deploy ODR to assist consumers in these kinds of cases. International organizations have promoted ODR as a solution to access to justice challenges since 2002. UNCITRAL, the United Nations organization in charge of harmonizing global laws, convened a working group devoted to ODR with more than 66 participating national delegations, and the group issued its final recommendations in 2016.

In Europe, the number of private and public ODR start-ups has grown steadily. Certain countries have led the way as early adopters (e.g., England, The Netherlands), but now the more conservative governments on the continent are following suit.1 In 2015, the EU adopted a new regulation requiring all merchants in EU member states to notify their consumers about the availability of ODR, and the EU launched its own ODR filing form to collect buyer complaints and distribute them to regionally appropriate ODR service providers. An excellent example of the expansion of dispute resolution in Europe is the Directive 2008/52/CE de le Parlement Européen et de Conseil de 21 Marz, 2008,2 which made mediation mandatory in EU member states in certain cases such as torts and contract disputes, where the parties were from different countries. Now, the International Standards Organization is evaluating a proposal to make ODR a de facto standard for all international e-commerce transactions.

The momentum behind ODR appears to be growing around the world. Those who have seriously considered the problem of access to justice, especially for high-volume/low-value cross-jurisdictional disputes, have come to the conclusion that ODR is the best option for the future. Judges, Bar Association presidents, regulators, general counsels and legal aid attorneys are all confronting shrinking budgets, growing numbers of self-represented litigants and changing expectations among the constituencies they are trying to serve. The track record that ODR has already achieved in a wide variety of global applications is encouraging them to think seriously about how ODR can work in their home geographies.3 With all of this momentum, it is clear that ODR’s time has truly arrived.