Does ODR Herald a New Age of Dispute Resolution in India?

Does ODR Herald a New Age of Dispute Resolution in India?

The functioning of Courts in India has been severely affected by the Covid-19 pandemic. Increasingly, courts are only taking up urgent matters for hearing and encouraging e-filings and video conferencing. This has added to the high backlog of cases and compounded the troubles of the already strained legal system.

In India, several problems plague the traditional litigation system such as the high pendency of cases in the courts, low judge to population ratio, inadequate governmental administration wherein a large quantum of cases is filed against government authorities and bodies, unsatisfactory infrastructure and shortage of funds and staff.

The emergence of ODR as a long-term and sustainable solution

Online Dispute Resolution is one of the solutions to the problems that plague the traditional litigation system.

Online Dispute Resolution is a digital space where parties can convene to resolve their disputes or cases. The platforms are specifically designed to encourage parties in resolving their case. In India ODR has taken off in a big way since 2015 but there is still progress to be made. Some of the prominent players in this space are CADRE, SAMA, Presolv360, Jupitice, Agami, Webnyay and SmartSettle.

Impact of the Covid-19 pandemic and the need for ODR

In India, alternative dispute resolution mechanisms have been slow to take off but one oft cited example is the Lok Adalats that have been incentivized by the government as there is no charge of court fees. Today, the number of cases that are disposed of by Lok Adalats every year is more than 50 lakh. Furthermore, to give an impetus to Lok Adalats that suddenly saw a halt during the pandemic, a need for ODR was felt and digitisation was undertaken wherein video-conferencing rooms were set up and ODR platforms were built.

Some case studies demonstrate the importance of the Online Dispute Resolution process. These include ICICI bank that found that many small value loans (that are less than 20 lakhs) are very difficult to recover and in order to address this concern, they tied up with an ODR based service in Bangalore. The results were extremely promising with 10,000 retail loan disputes being resolved before the pandemic struck.

According to Snapdeal, the ODR platform has not only helped resolve disputes through an online mechanism but people also trust the system more and as such have repeatedly used the website even after the dispute, regardless of whether they won or lost the dispute.

Let us look at some of the advantages of an ODR model as opposed to traditional litigation 

1.) Asynchronous Communication – Parties can respond after due reflection and consultations to ensure that discussions are fruitful and the level of the discourse is maintained. Parties can respond at their convenience and there is no need for both parties to be present at the same time. As the matter is decided online, there are no constraints for parties and the authority overseeing the case. This mode is also extremely beneficial when the parties are uncomfortable being in physical proximity with each other. Examples include divorce matters, domestic violence, payment of maintenance or children’s custody.

2.) Faster Resolution – As explained above the online mechanism has fixed timelines and parties are encouraged to reach a mode of settlement. The collection of data and the experience of parties as cases progress will improve how systems are designed and will help remedy inherent flaws in online architecture.

3.) Ease of Access – It is estimated that 75%-97% of justiciable problems don’t reach court. Since the cost of escalating a matter or filing a case will reduce considerably, people will not hesitate before accessing an online dispute resolution platform.

How to Ensure People Adopt ODR Mechanisms

ODR is a great opportunity that is already growing in India but to expedite this process, there is a need to scale up considerably and ramp-up capabilities to ensure that ODR becomes a reality in India on par with traditional litigation. Let us examine some steps that the government can take to that end.

1.) Mass Awareness Campaign - The government, Niti Aayog and all stakeholders must get on board and start a mass awareness campaign. As ODR platforms are particularly suited to commercial and business-related disputes as seen in the case of e-commerce sites that have readily incorporated these platforms, they should take the lead and demonstrate the benefits of a robust ODR model. There should be efforts by the government and ODR platforms to ensure that capabilities are built and people have access to computers, stable internet connections and a user interface that is convenient and easy to use.

2.) Infrastructure and Security – The government must ensure that people adopt this mechanism readily by ensuring that people trust these platforms. In order to ensure that people repose faith in these platforms, there should be greater enforceability and all parties should be guaranteed a fair and equal opportunity of being heard. Governments should focus on a security infrastructure that ensures any confidential information that is uploaded cannot be hacked or the platform itself cannot be breached.

3.) Professional Services – The government and private players must introduce robust training modules and programmes so that lawyers/mediators/conciliators/arbitrators etc. can enrol in these programmes and learn the intricacies and nuances of individual platforms. The platforms must ensure enforceability of all awards without any delays and this will be the fulcrum around which the movement towards ODR is built. Enforceability will lead more people to adopt ODR mechanisms as many businesses, individuals and enterprises rely on enforceability of contracts and face losses when they spend time and money going through courts.

Conclusion

Contracts should now have provisions for ODR in the event of a conflict. Furthermore, there must be established ODR platforms and institutions to ensure enforceability. It will be incumbent on these platforms and institutions to ensure that the award is enforced. Provisions should be created to ensure that any party that is seen causing undue delay to defeat the right of the opposite party is strictly punished.

The government must also work towards building trustworthy and credible institutions from where Dispute Resolution Professionals can be appointed.

ODR heralds a new age in dispute resolution in India. With internet penetration increasing and the pandemic signalling a halt in traditional litigation, this method can be used to effectively resolve disputes and ease the burden on courts. Enforceability of Contracts is one of the key parameters that need to improve to increase our Ease of Doing Business rankings and ODR is a step in the right direction.