The “Success” of Online Dispute Resolution in Europe

Readers expecting to glance at part 3 of our multi part Towards Cyberjustice retrospective will have to wait a few extra weeks since we felt it more timely to address recent reports coming out of the European Union following the two-year anniversary of the EU’s online dispute resolution (ODR) platform.

As a reminder, the platform was launched in 2016 as per Regulation (EU) no 524/2013 of the European Parliament and of the Council of 21 May 2013 on online dispute resolution for consumer disputes and amending Regulation (EC) No 2006/2004 and Directive 2009/22/EC (Regulation on consumer ODR). As observed in subsequent reports, creating, launching and administering the platform seemed, at the time, to be an appropriate way of dealing with the 21% of consumers who face certain issues when making online purchases. As stated in the Regulation’s Preamble:

“Being able to seek easy and low-cost dispute resolution can boost consumers’ and traders’ confidence in the digital Single Market. Consumers and traders, however, still face barriers to finding out-of-court solutions in particular to their disputes arising from cross-border online transactions. Thus, such disputes currently are often left unresolved. […] ODR offers a simple, efficient, fast and low-cost out-of-court solution to disputes arising from online transactions. However, there is currently a lack of mechanisms which allow consumers and traders to resolve such disputes through electronic means; this leads to consumer detriment, acts as a barrier, in particular, to cross-border online transactions, and creates an uneven playing field for traders, and thus hampers the overall development of online commerce.”

This is the backdrop on which the EU’s ODR platform was created, and recent statistics seem to confirm that the initiative has been successful. As reported by Etienne Wery, after two years, more than 6.4 million unique visitors have accessed the platform, and filed an average of 2000 claims per month. This is particularly impressing considering that only 28% of online retailers link to the platform (which is mandatory as per article 14 of the Regulation, as is stating your email address, something 85% of retailers do).

The European Commission also offers statistics on the provenance of disputes. Unsurprisingly, most disputes (60,7%) remain national (between a consumer and merchant stemming from the same country). For example, out of the 6 460 complaints coming from French nationals, a majority (3 000) are against French corporations.

Germans seem to be the most active on the platform with 16 458 complaints (of which 13 184 are against Germain businesses), followed by the UK with 14 422 complaints. It will be interesting to see how Brexit will affect these numbers in the future since the Regulation technically only applies to “traders established in the European Union” as per article 2. Unsurprisingly, Iceland and Liechtenstein, two of Europe’s smallest countries (and non-members of the European Union) have registered the least amount of complaints with 11 and 6 respectively. They are also the only countries where all complaints are against foreign businesses (which against makes perfect sense given their non-member status).

It’s also interesting to note that consumer confidence in ecommerce has increased by 21.1% in Europe since the launch of the platform. Although it is difficult to establish direct causality between those numbers and the presence of an accessible, fast, and low-cost process to settle ecommerce disputes, common sense would dictate that the ODR platform has had a positive impact on consumer confidence.

The most interesting statistic, however, is the one relating to satisfaction. According to the above-mentioned article published by Etienne Wery, 71% of surveyed users were satisfied with the system. How does that satisfaction rate stack up against the court system? As we can gather from a 2014 study published by the French justice department, this is the same satisfaction rate as that registered overall for civil matters (excluding divorces) that appear before the courts of that country. In other words, French consumers consider the current ODR system to be as good a way to resolve their disputes as the courts. This gives credence to the UK’s 2015 report that online tribunals are the way of the future to settle low intensity disputes – a model regular readers of this column will recognise as one currently being used in different jurisdictions in British Columbia, Ontario, and Quebec.

In fact, as impressive as the most recent European statistics may be, they still pale in comparison to those that have been recorded here in Canada. For example, the ODR platform launched as a joint project by the Quebec Consumer protection agency and the Cyberjustice laboratory currently registers an 88% satisfaction rate as opposed to the European platform’s 71%. Further, considering relative population sizes, the Quebec platform (PARLe) seems to be much more popular than its European counterpart. As of theses writings, PARLe has received 2 142 complaints. Given a population of 8.4 million, that implies a ratio of roughly 0.026%. As a comparison, the European platform’s 24 000 registered complaints only represent 0.005% of the EU’s 511,8 million inhabitants.

Of course, many different reasons could explain this discrepancy. First, it could stem from the fact that business adhesion was stronger in Quebec thanks to the Consumer protection agency’s efforts to convince companies that the project was going to serve them in the long run. Therefore, approximately 80 out of a possible 257 179 businesses signed on to the project in Quebec (which represents 0,03% of businesses), as opposed to only 300 out of 3 188 138 French companies being registered (which represents 0,009% of businesses). Further, it should be mentioned that the European platform only deals with online commerce, while the Quebec platform welcomes all forms of consumer contract disputes (both on and offline). Another explanation for the difference could simply be the fact that Quebecers are more litigious, but, even if this could be demonstrated to be right, we doubt it would be more than a contributing factor.

We would submit that the European platform’s flaws, or rather the reasons it’s not as successful as it could be, reside in two distinct areas. First, as with past EU ODR initiatives such as ECODIR – a platform developed by eResolution (a former endeavour of one of the undersigned) for the European Commission in 2001, but for which little to no advertising was done – the EU has not put in sufficient effort to publicise the “new” system. Further, the fact that, in some member states such as Cyprus, Malta, and Latvia, less than 1% of online merchants advertise the service shows that oversight is insufficient. This could even be said of countries where this obligation is met by a larger number of online merchants such as Germany (66%) or Austria (47%), which still register far from impressive statistics. The lack of publicity and oversight undoubtedly translate into a lack of awareness on the part of consumers.

Second, and most important, the EU’s ODR platform is not an ODR platform in the purest sense of the word. Consumers cannot resolve their conflicts using the platform directly; they are redirected towards one of more than 350 accredited ODR providers of unequal quality to settle their disputes (in the spirit of full transparency, we should mention that one of those platforms, the French Chambre nationale des huissiers de justice’s “Medicys”, was developed by the Cyberjustice Laboratory). Because of this multitiered system, complaints can take up to 90 days to get resolved (as allowed by ADR regulation), which seems long for an ODR process. As a comparison, the Quebec model sees disputes get settled in under 30 days on average, notably because they are treated directly through the PARLe platform.

Of course, even if this comparison demonstrates that the European platform remains perfectible, it still offers consumers a faster, cheaper and more convenient vehicle to settle their disputes, with an outcome judged to be as satisfactory as going through the long and strenuous court process. It should therefore be seen as a huge success and will hopefully develop over the next few years to allow for access to justice in other fields than consumer contracts.