Dispute Resolution is a process of settling a disagreement on a business transaction made between two or more parties. Every online website has certain protection policies for buyers, but there are instances where a protection policy is unable to stop a dispute from being raised.
According to Emarketer, “China and United States are the world’s leading e-commerce markets combining 55% of the global internet retail in 2014.” As per the analysis, China will top the chart by exceeding $1 trillion in retail e-commerce sales by 2018 accounting for more than 40% of global e-commerce sales.
With these huge number of transactions, it would be hard for anyone to keep disputes at bay. Without a robust dispute resolution mechanism in place, companies are finding it difficult to stay even competitive due to the inability of evaluating a dispute legitimately. With every on-going dispute settlement, companies will not only bleed out chunks of dollars for reaching a mutual settlement but also slowly lose the user tractions on their websites.
According to the “Online Dispute Resolution for Business by Colin Rule,” for $7 trillion internet projections, the rule of thumb is that 1 to 3 percent of transactions end up in some dispute that will result in hundreds of billions of dollars tied up in disputes needing resolution.
With the ODR process in place, a lot of disputes that were unmanageable earlier are now resolved promptly. Two renowned e-Retail giants have recently implemented an ODR system for efficient management of disputes. They even have strong policies of Buyer Protection, where if charges are proved against a merchant, then the whole amount will be refunded to customers with no questions asked. These companies are working continuously to make their ODR process more flexible than what it was in its earlier days to achieve a level of customer delight. There are some other companies like Modria, PeopleClaim, and 4PS, who only specialize in settling disputes between other companies and customers.
When we talk about resolution, there are different ways of resolving a dispute that varies from company to company. There are certain basic methods that are pinpointed by most companies for settling disputes are mentioned below:
Negotiation – Mediation – Conciliation – Arbitration
After a dispute is raised, it is advised that the disputed parties come together for a discussion to reach a mutually agreed solution using ‘Negotiation’ process between them. In some cases, when negotiation is failed, ‘Mediation’ process is followed where a mediator tries to direct the discussion to reach a consensus but does not suggest any outcome. But there are times where disputed parties will not mediate, and then a third party known as conciliator tries to settle a dispute by providing multiple suggestions for reaching a common agreement. This process is known as ‘Conciliation.’
There are events where all processes mentioned above are unable to settle a dispute, then a single person or a group of people known as arbitrators hear the case presented by disputed parties along with all supporting pieces of evidence. This process is termed as ‘Arbitration.’ All parties involved in a dispute need to be bind by the decision put forth by arbitrators. Arbitration helps in resolving a dispute privately instead of going to court.
Below are some of the steps of how an ODR process would work online.
- Do you have a problem with a transaction? Raise a dispute
An online dispute can be raised either by a customer or a merchant for a particular transaction within a specified time span. Once a dispute is raised, parties involved in the dispute will be notified with the details of the dispute.
- Negotiate to reach a mutual consensus
In the first instance, all disputed parties will communicate with each other and try to settle a dispute amicably by reaching a mutual agreement. The parties once satisfied will close the dispute. - Still not satisfied? Escalate an existing dispute to a claim
If any party is not satisfied with the terms negotiated for a dispute, may escalate the same to a claim within some specified time span. - Solve a claim with expert advisors
As soon as it gets escalated, a third party first understands the reason of the claim and then asks for some supporting documents. After all, documents are evaluated, the concerned person tries to direct the discussion towards a common agreement and may also provide some suggestions as part of the resolution process. - Close a claim
Once an agreement is reached, the claim is closed, and the third party freezes all documents to avoid any legal actions filed against them in the future. - Want to arbitrate? Re-open a closed claim.
In case a disputed party is not satisfied, he can re-open a claim within a particular time frame. Once re-opened, the process of arbitration may follow to reach a settlement.
Using these steps, a generic ODR system can be outlined. While having an ODR process in place, the companies can save their money from being drained out due to different disputes. This also gives a sense of protection to buyers which increases their loyalty for the websites. The Modria team already helped companies like eBay and PayPal to solve more than 400 million cases.
In eBay, there are approximately 60 million disputes among traders are resolved using their ODR process. Now – a – days, in the UK people are so much inspired by the ODR process of eBay that they are thinking of creating an ODR system to move the judicial system partially online. As per the report written by Prof. Richard Susskind, cases like financial claims worth less than £25,000 or various family disputes could be resolved over email and telephone conference calls.
By 2017, the new and updated three-tier online dispute resolution system known as ‘Online Courts’ would be running live in the UK with an aim to resolve civil disputes on some pre-defined criteria using techniques like e-negotiation and e-mediation.
In the coming days, Online Dispute Resolution (ODR) process will be a game-changer for companies to survive in this highly competitive world.
