ODR is a dispute resolution mechanism that involves the use of technology in facilitating resolutions. The Internet has brought major changes to ADR methods, making them more agile and time and cost effective. As with regular dispute resolution, ODR allows for filling the gaps of the current regulations in international private law to deal with Internet cases. In addition, it allows for:
- Improved early neutral evaluation by enabling to bring in experts regardless of the geographical location;
- Improving negotiation by fostering single or double blind negotiations - negotiations where the liability of the parties is not subject to dispute, however the offer and the demand are kept hidden during the negotiations and are disclosed only if both offers match;
- Introducing e-mediation where parties are led through automated choices to achieve consensus before working with a mediator; and
- Introducing new forms of arbitration and new rules of procedure (such as the digital submission of evidence and documentation, holding hearings via online platforms, etc.)
An example of these new forms of arbitration is the Universal Domain-Name Dispute-Resolution Policy (UDRP), developed by the World Intellectual Property Organization (WIPO) and implemented by the Internet Corporation for Assigned Names and Numbers (ICANN) as the primary dispute resolution procedure. The UDRP is agreed to in advance as the mandatory dispute resolution mechanism in all contracts involving the registration of generic top-level domains (gTLDs) (e.g. .com, .edu, .org, and .net) and for some country code top-level domains (ccTLDs) as well. Its unique aspect is that arbitration is not agreed upon by the parties, rather it is applied to all the contracts. In addition, awards are applied directly through changes in the domain name system (DNS) without resorting to enforcement through national courts. This way, UDRP allows for efficient and fast means to resolve domain name disputes between trademark holders and bad faith registrants of domain names. By providing a uniform set of guidelines, the UDRP mitigates the jurisdictional and jurisprudential issues that may arise in an international prosecution of a complaint.
The need to regulate disputes in cross border e-commerce consumer cases in the European single market has led the EU to adopt the Directive of consumer ADR. It required EU member countries to establish ADR bodies for the settlement of consumer-to-business disputes beginning in 2015. A year later, the Regulation on consumer ODR came into effect, creating an online platform to file complaints regarding e-commerce. This regulation introduced significant changes to the existing civil justice system in the EU. It has created an additional way for consumers to achieve accessible, timely, and cost effective redress.
In the USA, ODR has been offered by e-commerce companies since 2000, and now various courts mandate the use of ODR as the first step of dispute settlement.
Another example is the Hangzhou Internet Court in China established in 2017, offering an ODR platform for dispute resolution for Internet-related cases.
ODR is evolving and on track to be widely used in many parts of the world. While it has its weak points, such as accessibility and confidentiality issues, it gives parties a more convenient, flexible, and effective way to resolve their disputes compared to traditional arbitration.