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Online Dispute Resolution is the expedient, cost-effective and convenient resolution of disputes using technology and methods such as negotiation, mediation and arbitration.
So much has been written about Online Dispute Resolution (ODR) in the recent past. A field that was on the fringes has moved to the centre. Is it just a hasty response to COVID-induced remoteness? Is it just a fad? Far from it. Like online education, online payments, or online banking, it will quickly become a part of business and society.
Here is my central message – ODR is the future and every obstacle it faces, such as the digital divide, legacy mindsets, class and power asymmetries, and the huge role of government in litigation, will shake itself out over a 3-5 year horizon. This has been the case with every seismic change driven by the digital revolution, be it healthcare, finance or government services. So the business leader, or legal leader in business, can choose to meet ODR once it has become pervasive or be a steward of the change, shaping it and spreading it. This choice is yours – leadership or followership.
Here’s why I believe this will come to pass – Every major change is usually a convergence of many factors that make it the unshakeable new reality. Online payments was a convergence of – a brilliant solution i.e. a common platform in UPI, unbeatable convenience, the archaic alternatives, the presence of entrepreneurial energy, the growth of the new economy, and the entry into the formal economy of more and more people. Online dispute resolution is a convergence of the following:
- The availability of ODR platforms offering negotiation, mediation and arbitration at a totally different price point and execution window.
- The failure of the mainstream options i.e. the courts – the time, the cost, the opaqueness and the uncertainty.
- The suboptimal nature of the alternative options that have emerged in the last decade i.e. the cost of arbitration and the inconsistency of mediation.
- The importance of trust and expediency for enterprises.
- The digital native who wants high expedience – hours, not years – at low cost.
- The conviction of most of the government and judiciary to make this happen.
If I had to cull out the essence of the above I’d say that the troika of trust, expediency and cost, is what will carry ODR to nation-scale by 2025.
An Accenture survey in 2018 found Trust to be the single biggest competitive advantage in business. In the Bottom Line on Trust, published by Accenture earlier this year, the authors say “To be competitive in today’s environment, companies need to execute a balanced strategy that prioritizes trust at the same level as growth and profitability. Those who do benefit from greater resiliency from trust incidents, making them more competitive. Those who don’t are putting billions in future revenue at risk.” Businesses in India today, particularly in the new economy, recognize that everyone is a repeat customer, client, or partner, and any champion can be a vociferous detractor. Recourse to litigation must be reserved for the rarest of rare instances.
On the subject of Expediency, the contrasts are even starker. You buy a ticket in 2 mins, get a microloan in an hour, get your groceries in two, and yet, you’re told, that to resolve a dispute you have to wait months, if not years. As a business, you’re talking about digital KYC, digital contracting, just-in-time inventory, but if it goes sour, you’re caught with fossilized solutions. Early data on ODR in areas such as lending, property rentals, and supply chain, shows an >85% time-saving as compared to mainstream resolution.
Where Cost is concerned, the adage time-is-money holds good and ODR processes being digitized and remote are 90% cheaper than other methods. The savings could be even more given that other methods are highly indefinite i.e. your dispute could linger and your lawyer would keep appearing in pursuance of it.
These are not incremental changes. They have the potential to transform business and society – lowering the cost of credit, improving operations, reducing insurance burdens, reducing overall cost of business, driving greater FDI, and increasing the GDP.
ODR will look and feel different for every category of business and this is where the role of intrapreneurial general counsels, trusted lawyers and energetic startups will be key to identifying the right solutions for the problems at hand. What is a SAAS solution for someone will be an independent platform integration for another, what will be rule-based negotiation for one will be online mediation or arbitration for another; versatility is key, and very much possible.
The philosopher Alan Watts said it well – “The only way to make sense out of change is to plunge into it, move with it, and join the dance.”
Disclaimer: This article reflects the personal views of the writer.