Publicly Funded Consumer ODR Is Now a Reality in Quebec

Ever since we started this regular column back in 2012, we’ve been defending a basic thesis: for consumer online dispute resolution (ODR) to succeed, it needs to be publicly funded and retailers need to be given a clear incentive to take part. This is the thesis we aimed to test when, on October 7^th of 2016, the Cyberjustice Laboratory (the “Lab”), in collaboration with Quebec’ consumer protection agency (the Office de la protection du consommateur or “OPC”), and the ministère de la Justice du Québec, decided to launched a pilot project around the Lab’s Platform to Assist in the Resolution of Litigation Electronically, better know under its acronym PARLe, which is French for “to talk” or, as defined by Merriam-Webster, also means “to speak with another”, or “to discuss terms with an enemy”.

The Cyberjustice Laboratory started working on PARLe back in 2010, thanks to funding we received from Services gouvernementaux Quebec (which is now part of the Conseil du trésor). PARLe built on prior ODR applications we had developed over the years, namely the Cybertribunal, eResolution and, more directly, ECODIR (Electronic COnsumer DIspute Resolution).

Like ECODIR, the first iteration of PARLe – the one currently used for the pilot project – was developed to settle what are commonly known as low-value – high-volume (what we like to refer to as “low intensity”) consumer disputes. In fact, although the coding behind both platforms is obviously very different, their functionalities remain quite similar: A consumer logs on to a platform, fills out a form to describe the problem, and a second form to propose a settlement. An email is then sent to the merchant so that he can log on to the platform and either accept the consumer’s proposal or make a counter proposal. Should the parties be unable to reach a settlement using this simple mechanism, a mediator is invited to log on to the platform and help them resolve their issue. PARLe offers more bells and whistles, but we chose to build on this same general outline.

ECODIR, although it’s still technically available to settle disputes, never reached the levels of success that were expected, or hoped for. In fact, as we’ve expressed elsewhere, the project never really got off the ground. Keeping this in mind, one might wonder why we decided to build upon a project that we ourselves admitted had “never really taken off”. After all, to use a quote attributed to Albert Einstein, the definition of insanity is “doing the same thing over and over again and expecting different results”.

As we’ve pointed out in previous contributions to Slaw, we’ve always believed that the problem with ECODIR wasn’t the technology as much as the business model. Getting back to the second part of our basic thesis: “for consumer ODR to succeed […] retailers need to be given a clear incentive to take part”. This is also what Lesley Caplin pointed out in her Analysis of the ECODIR Project:

“ODR faces a number of challenges on the road to reaching its full potential. The greatest of these – as has been revealed by examination of the ECODIR project – is centred on business‘ reluctance to participate. This is primarily due to a lack of trust in ODR systems.”

Ms. Caplin goes on to state that:

“Some form of prior relationship or understanding between ECODIR and the business party is required. A large number of cases did not proceed to the negotiation phase due to the business party simply ignoring the notification email from ECODIR. As the process is entirely voluntary, there are no immediate repercussions for the second party should they choose not to participate.”

In order to address the challenges underlined by Lesley Caplin (and others), and, consequently, ensuring that PARLe wouldn’t meet the same fate as ECODIR, the OPC met with a number of Quebec businesses that held important market shares and that were therefore statistically more prone to being sued by consumers. By explaining to these businesses the added value of taking part in the pilot project (better press, not having to go to court, higher consumer satisfaction, lower costs, etc.), the OPC managed to convince quite a few retailers to sign on.

As for consumers, since the pilot project is funded by the OPC and the Cyberjustice Laboratory (who share costs for maintenance, hosting, and the help desk), as well as the Quebec DOJ (who pays the mediators), PARLe offers them a free tool to settle their disputes in a timely manner (cases are usually resolved within a 30-day window).

The general process of the pilot project is as follows: A dissatisfied consumer calls the OPC to complain about goods or services he purchased either online or in a brick and mortar establishment. If the retailer has signed on to the pilot project, the OPC agent will give the consumer a code, after verifying a few items (is the consumer computer literate, does his or her claim fall within the parameters of the OPC’s mandate, etc.). The consumer will then log on to PARLe and enter the code. This mechanism ensures that the OPC can control the types of claims that are filed (claims regarding illegal goods or services, for example, could be weeded out). It also limits the chances that vexatious litigants flood PARLe with baseless claims. The parties then have up to twenty days to settle their dispute using the tools described above, after which a mediator (selected from a list of pre-approved lawyers and notaries) is randomly assigned to the file. The mediator then has ten days to bring the parties together. If this fails, the OPC informs the consumer that he or she can chose to take legal action against the retailer using more conventional means (i.e. filing a small claims case).

After only a few weeks, the statistics seem quite encouraging: Of the few hundred cases filed between October 7^th of 2016 and the New Year, almost 70% were resolved within the allotted time. Even more interestingly, many consumers that did not manage to reach a settlement still expressed their satisfaction with the platform.

Although it’s too early to claim that this pilot project confirms our thesis, it does seem to give credence to it. This is not to say that private ODR platforms cannot flourish, but the specific field of consumer ODR seems destined to develop within the public sphere.