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CETA and ODR: Facilitating Trade Through Online Dispute Resolution

Unless you’ve been completely disconnected from international economic news, you’ve heard about the fact that, for four years now, Canada and the European Union have been negotiating “the Comprehensive Economic and Trade Agreement (CETA) in order to bring their trade and investment relationship to a new level”. As explained on the EU’s website:

CETA will cover the key issues relevant to a modern trade and investment environment, from ambitious new market access opportunities to clear rules for European and Canadian traders and investors.

Of course, one of the key issues relevant to a modern trade environment (or to a less modern one for that matter) is undoubtedly how to settle the disputes that are bound to emerge in said environment between trade parties, whether they be businesses, governments, or consumers. Although the official content of the CETA has yet to be made available to the public, leaked drafts and off the record comments suggest that the agreement will promote arbitration. In fact, one of the aforementioned leaked drafts goes so far as to indicate that arbitration will be conducted in accordance with “the UNCITRAL Arbitration Rules”. These dispositions are obviously pertinent and, we would dare say, welcomed when regarding the relationship between businesses or between businesses and governments, but what of consumers? Current UNCITRAL Arbitration Rules are somewhat ill adapted to settle high-volume, low-value disputes such as those that will undoubtedly emerge through laxer trade rules (i.e. the great majority of consumer disputes).

Will the CETA offer a framework to help Canadian consumers dealing with European businesses and vice-versa? This question is especially pertinent since Canada and the EU seem to want to use the CETA “to promote the development of electronic commerce between them”. This sentiment is referenced in a section of the CETA draft titled “Electronic Commerce” (the first section of the agreement to be concluded, should one choose to trust online sources). According to said section, one of the goals of the CETA is to foster “trust and confidence in electronic commerce”.

Although the proposed means to reach this end (protecting personal information, and protecting consumers from “fraudulent and deceptive commercial practices in the sphere of electronic commerce”) are difficult to disagree with, we would suggest that online dispute resolution should also be – if not incorporated in the list – at least alluded to in some capacity. After all, since ODR, in its widest acceptance, encompasses all methods and mechanisms that allow parties to settle their disputes using the Internet, and since these methods and mechanisms can be “incorporated directly into the electronic marketplace [which] not only make it possible to resolve disputes at the source, when they arise, but also to reassure the parties and create trust conducive to commercial transactions”, it goes to reason that fostering trust and confidence in electronic commerce is closely linked to encouraging access to ODR for high-volume low-value disputes. CETA drafters should therefore logically do all they can to facilitate the deployment of ODR solutions.

In fact, Canada and the EU should take advantage of these negotiations to consider developing or sponsoring public ODR providers. This could go a long way in improving trust and confidence in electronic commerce – which the CETA aims to do – and, therefore, augmenting online transactions (another of the CETA’s goals). As one author observed while proposing a similar platform for Canada-USA electronic commerce:

The resources expended through the public creation of an ODR system would likely be recovered through the savings of judicial resources, by providing alternative solutions to formal adjudication, and the increase in the wealth of the economy created by improving relationships and confidence in engaging in bilateral trade, allowing businesses to prosper through international online transactions.[1]

The CETA has been back in the news recently since Stephen Harper announced last week that said agreement wouldn’t be concluded anytime soon. If this gives the parties a chance to consider incorporating or even acknowledging ODR solutions in the agreement, it could be worth the wait. Of course, incorporating an ODR provision into the CETA would probably have little real-world effect on actual efforts and collaborations to help promote online negotiation or arbitration. After all, Canada and the EU have already begun collaborating to this end through the UNCITRAL Working Group on Online Dispute Resolution, and we would argue that a multilateral ODR framework would be preferable to a bilateral one (supposing both agreements are equal). But since the outcome of that working group’s work is still unknown, it wouldn’t hurt to have a “plan B” through the CETA…


[1] AndraLeigh Nenstiel, “Online Dispute Resolution: A Canada-United States Initiative”, (2006) 32 Can.-U.S. L.J. 313, 320.

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Comments

  1. Dr. Richard Beifuss P.Eng., C.Arb., Mediator

    As designer and Director of The Contract Disputes Advisory Board back in the 80s and 90s I quite often conducted online negotiation, mediation before initiating “fact based” arbitration. Even the arbitrations were expeditious as no legal argument was permitted. Dealt with simple and complex claims up to $20 million dollars. Hearing time was restricted to three days. Total cost inclusive of arbitrators salary, paying for claimants board member, rental of venue facilities and travel(hearing was held as close as possible to claimants location) was a maximum of $15K.
    Crown considered itself bound by the arbitrator/chairman’s recommendation but claimant was free to accept or reject. Nevertheless, over 90% of all claims were resolved by this non-binding process. It would not be very difficult to adapt this for private sector.

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