Par Riikka Koulu

In the previous post I shed light on the background of UNCITRAL’s work in drafting unified procedural rules for resolving e-commerce disputes through online dispute resolution. In this post I will discuss the meeting on February 2015.

UNCITRAL’s work concerning ODR rules has proven to be much harder a task than expected, as fundamental differences between different jurisdictions are very much present in this particular context. The hot potato, so to speak, is whether to allow binding pre-dispute arbitration in business to consumer (B2C) relations or not. It all comes down to ways of providing consumer protection in an online world. As it is, no one is against consumer protection in itself, but opinions on how it is achievable differ significantly. A key element in this debate is whether to emphasize the consumer’s fundamental right of access to courts and the non-binding nature of ODR, or to insist on binding pre-dispute consumer arbitration and resorting to credit card chargebacks.

This is a debate that can basically be summarized as the choice between one or two clicks of a mouse. Whether by agreeing to ODR in the first place the consumer simultaneously agrees on the possibility of binding arbitration if the dispute is not otherwise resolved (one click) or whether the consumer gets a non-binding recommendation as a default and has the option to accept arbitration instead of it (two clicks). This is a debate that has brought UNCITRAL’s future work in this field into question. This is a debate that has taken up to five years of work and is still no closer to finding a solution. It is also a debate that could end the work of the whole working group.

 

Where Are We Today

UNCITRAL’s working group III has focused on ODR since 2010 and is now in its 10th meeting on the topic (and 31st session altogether) which was held in New York in February 2015. As depicted in the previous post, progress came to a standstill in the meeting on October 2014 when no solution was found for the fundamental issue of binding pre-dispute consumer arbitration.

After the unsatisfactory compromise in late 2014, the pressure on the next session in February 2015 in New York had grown to almost astronomical proportions. As the two-track system had been sidelined for the time being, the WG’s work seemed to have taken several steps backwards. Could it be possible to reconcile differences within a single track? Could we return to the two-track system and solve the inherent issues on the interface and annex?

 

Arbitration or Recommendation, One or Two Clicks?

The 31st meeting of WG III and its 10th session on ODR took place in New York in the beginning of February 2015, and the week progressed in a somewhat nonlinear fashion. It started with the somewhat tedious task of going through the current draft rules, progressed to discuss yet another proposal and ended up with the suggestion that perhaps this really was it.

At first, the wording of track I draft rules was discussed, and then later on during the week another proposal was tabled with the hopes that it would overcome the differences with a compromise. However, the proposal did not provide a clear-cut solution for addressing the question between one and two clicks but instead left the wording ambiguous. Then again, ambiguous wording could prove to be the compromise as anyone could interpret it according to their needs. The proposal could be interpreted as installing the second click or as requiring just the one, pre-dispute click. It was further clarified that the interpretation would depend on the legislation of each jurisdiction and that the proposal itself did not contain an opinion one way or another.  Skepticism against this solution was voiced as a referral to national legislation would not necessarily be in accordance with the objective of unification. After five years of work, this ambiguity would be a cold comfort when compared to the original objective of clear-cut procedural rules.

The discussion circled around the acknowledged stances, though they were not explicitly stated. The fundamental disagreement on consumer arbitration was barely addressed directly, as the conversation focused on details of wording and possible ways of interpretation. The stances were known, whether voiced or not, as the role of arbitration has been the hot topic in all the meetings on ODR. On one hand, consumer arbitration was argued to be an improvement of consumer protection, as it enables a consumer to reach an enforceable award in low-value cases where the case would never otherwise be litigated. On the other hand, it was claimed that consumer protection is forfeited by binding consumer arbitration, as arbitration is often expensive, prevents access to courts and might be biased towards repeat-players. These stances reflect the reality of the online markets which are discussed in the earlier post.

 

Is There a Future?

It is clear that UNCITRAL’s work in this global legal environment is challenging, to say the least. The ongoing discussion of the last five years has not yet found a way to overcome the differences of markets and adopted solutions, fundamental legislative differences and the realities of political decision-making. The process is starting to be frustrating as so little progress has been achieved.

As a result, there was discussion in the 31st session about whether to continue with the working group. This discussion stems directly from the problematic related to the second click. On one hand, there were many who considered the fundamental chasm too wide to overcome, but on the other hand, there are others who thought the need for a compromise, even a weak one, more urgent than the alternative of laissez-être.

So, the final decision lies with UNCITRAL’s Commission, which convenes in July 2015 for the next time. In this meeting the working group’s future will most probably be at least discussed, if not resolved. If the WG’s work is terminated, UNCITRAL member states are left to their own devices to address the problematic procedural issues of cross-border e-commerce. This would most likely prove hard for developing economies, with less impact on the established ODR Regime of the EU and the commonly used chargeback models of the USA. If the work is continued it is inevitable that the WG’s mandate (i.e. the scope of work) has to be specified, as no solution has been found in five years of the current scope. If the work continues, the one-or-two-clicks-problem still exists and has to be addressed again, most probably with a compromise, which has the danger of watering down the whole work in any case.

In the end, the practical meaning of UNCITRAL’s draft procedural rules depends on the fundamental choice between one-track, two-track or even three-track (B2B, binding B2C and non-binding B2C) systems. If uniform procedural rules are finally accepted, it is still up to the Member States to implement them on voluntary basis. If the major players decide against implementation, the unification process has to find other means than UNCITRAL.

 

Riikka Koulu
Candidate au doctorat à l’Université d’Helsinki