Are the EU ADR Directive and the proposals for an online court likely to work together to bring in an era of greater access to justice for those with low-value disputes? Or are they parallel initiatives that expose a gap? Pablo Cortes has been researching, from a socio-legal perspective, the main consumer ADR schemes operating in the EU. This article was originally published by The Conversation on 2 August 2016 and is published with permission. The opinions expressed are those of the author. This post is part of our series of commentary on ODR and ADR.
By Pablo Cortes
British justice remains an unequal beast. There is a big gap in access to justice if you are in a dispute over relatively low values. Imagine you have been let down by a seller on Amazon, or your used car has just collapsed on the motorway. The methods open to you to seek recompense are looking patchy at best.
A landmark report by the Judiciary of England and Wales recently concluded that ‘the single most pervasive and indeed shocking weakness of our civil courts is that they fail to provide reasonable access to justice for the ordinary individuals’.
It is a painfully familiar tale. Over a century ago Sir James Matthews is said to have observed that that ‘in England, justice is open to all, like the Ritz Hotel’. Only those few who can afford it benefit from the full protection of the law.
There are a number of Alternative Dispute Resolution (ADR) schemes that tackle these smaller disputes outside the hugely expensive courts, such as mediation and ombudsman schemes. However, major gaps still remain, and two recent legal initiatives, as they are now, will struggle to fill them.
In February 2016, the EU launched an online dispute resolution website that helps consumers to send complaints to businesses and to identify schemes they can use, but in most cases traders are not required to participate. More recently, in July 2016, the judiciary’s report recommended an online court accessible for litigants without legal representation.
The EU system makes traders tell customers if they adhere to a certified ADR scheme before a transaction goes ahead. Even if they’re not signed up, they have to tell consumers with whom they are in a dispute about these schemes’ existence. So in theory, if you are stuck in a row over a delivery of vacuum cleaner parts or the fees on your current account, the trader will have to tell you which ADR schemes can resolve the dispute out of court – but in most cases they can also say that they will not use them. That leaves the consumer more confused and without an option to seek redress outside the courts.
The rationale behind the EU legislation is that good businesses are incentivised to engage with (and sometimes pay for) ADR schemes, which will have the effect of a trust-mark on the quality of their services. But this has simply not happened. Some sectors have forced it through for certain disputes, but it is by no means a benchmark. Indeed, most traders who are not signed up don’t inform customers about it. Those who do, bury it in the terms and conditions (T&Cs), such as paragraph 14 in Amazon T&Cs, which rubs up against the law that requires them to provide this information in an easily accessible manner.
There is a law that threatens a penalty of an unlimited fine and two years in prison, but this blunt tool does not assure compliance. It would be better to devote resources to awareness campaigns and enforcement.
The online court
That’s why the proposal for an online court, endorsed by the judiciary and the government and expected to be rolled out by the end of next year, could be so important. It would be a departure from the traditional adversarial process. The court would operate as a tiered procedure with three main stages for most claims under £25,000.
You would get an automated ‘diagnosis’ process where simple online advice was offered after you filled in a claim form. In the second stage, your complaint would be passed to a case officer from the court, who would offer a mix of conciliation services and case management. This may include another judge providing a recommendation (an early neutral evaluation). Ideally, the case officers will settle the majority of cases. But for the system to work well, parties will need strong incentives to settle before they resort to the next stage, where a trial judge would make a final determination.
And so in effect, we may end up with a patchy and voluntary ADR system, working alongside but not quite in tandem with an online court that is more formal, slower and probably more expensive. Like the rest of the civil courts, the online court is expected to be self-financed by the users (especially consumer claimants) through court fees. And so it will not work well for many low-value consumer disputes in the hundreds of pounds or lower.
So how might we end up with a system which addresses this gap in our access to justice, using the tools we currently have at our disposal? In short, how can we integrate the two systems?
Let’s deal with the basics first. Regulators should ensure that traders comply with the information requirements and have incentives, such as a recognisable online label, to opt in to an ADR scheme. There should also be a residual ADR scheme for low value consumer disputes that issues recommendations and publishes their outcomes. Online court case officers should seek to move people towards early resolution through the ADR schemes or expert review. And there need to be cost incentives in the online court procedure that push people towards the ADR system at all points, escalating as the process reaches full trial.
It boils down to an acceptance in the online court process that the ADR system offers a simpler and cheaper alternative. An escape chute into that system should be on offer at all times accompanied by incentives that empower parties to settle their private disputes rather than have them determined by a judge.
About the author:
Pablo Cortes is Professor of Civil Justice, School of Law, University of Leicester.