Electronic commerce makes it possible for consumers to transact with companies or other individuals without regard to geographic location, but it also raises the question of how disputes will be resolved, especially when the buyer and seller are physically distant. Alternative Dispute Resolution (ADR) can be very helpful to both parties in electronic transactions, especially in cross-border complaints.
The development of alternative dispute resolution systems for electronic commerce which leave open to consumers the ability to pursue other avenues of recourse.
ADR systems that are easily accessible, fair, and provide swift resolution of individual problems will help foster confidence in electronic commerce. They will also benefit governments, consumers and businesses by mitigating the need to involve more formal systems of adjudication.
While consumers are generally protected by the laws of their jurisdictions, and vendors are also subject to legal oversight in the countries in which they are located, cost and other factors may make it difficult for consumers to obtain redress for cross border complaints.
Links to ADR systems can be provided by governments, consumer organizations, businesses and others to make it easy for consumers to find and reach them. Complaints and responses can be submitted online. If is desirable to bring the parties together electronically for "real time" discussion, this can be scheduled at a mutually acceptable time.
ADR can be faster than the traditional legal process.
The necessary framework and standards for ADR systems should be set by legislation.
Companies engaged in electronic commerce should help develop and support such systems.
Businesses who participate in such systems should provide links from their Web sites. Governments, consumer organizations, trade associations and others should also provide links to make it easy for consumers to find help. Disputes and responses should be able to be made online as well as offline.
ADR systems should be designed and presented as a voluntary option for consumers, not as a legal or contractual requirement.
ADR systems should be independent. They should be operated by reputable third parties, which could include government, nonprofit organizations, for-profit entities that are not directly involved in the disputes, or any combination thereof. If ADR systems are offered by trade associations or other industry groups, they should be separate and independent, and operate in consultation with consumer organizations.
Vendors may attempt to require consumers to use ADR mechanisms whether they wish to or not.
ADR that is binding on consumers may prevent their cases from being used by legal authorities, code enforcers or others representing consumers' interests in broader actions to stop fraud or abuse.
Differences in language, cultures, and expertise in specific subjects may make it difficult for the parties to understand each other and lead to unfair results. If ADR systems lack adequate independence, the parties may not be treated equitably and decisions may be biased.
If parties fail to comply with decisions and there is no practical means of enforcement, the ADR process may be an exercise in futility.