Online Consumer Dispute Resolution

In light of Government’s recent moves towards demonetising the economy and in times when the Government is urging citizens of the country to adopt a cashless lifestyle and increase reliance to online transactions, a huge influx of first time online buyers is expected.

The Ministry of Consumer Affairs, Food and Public Distribution and the Government of India are taking initiatives to encourage consumers to go digital and to build a robust system to address their grievances efficiently, such as, launch of a mobile application for consumer helpline, launch of another mobile application called ‘smart consumer’ which is a means to lodge complaints and voice grievances against packaged commodities and to access product information, originating online consumer communities known as ‘Local Circles’ to serve as a platform for presenting views, grievances and suggestions and thereby enabling the Government to know the views of the public, which would eventually help in policy making, launch of a microsite with the theme ‘Digitally Safe Consumer Campaign’ with knowledge support from Google,to help Indians stay safe on internet and to protect consumers from fraud and many more.

The Government of India is also encouraging consumers and companies to opt for online dispute resolution mechanisms to resolve disputes relating to these online transactions. These alternative consumer dispute resolution mechanisms are cost and time effective and these disputes can be solved amicably by such modes, pre-litigation.

To take this forward, an Online Consumer Mediation Centre (“OCMC”) is instituted at the National Law School India University, Bengaluru to provide for a state-of-the-art infrastructure for resolving consumer disputes, both through physical as well as online mediation through the OCMC’s platform. The OCMC is set up to provide innovative technology for consumers and organisations to manage and resolve conflicts and to propel online mediation as a first choice to resolving consumer disputes. It is an affordable tool to access justice, a quick and easy redressal mechanism and at the same time provides opportunity for businesses to maintain good customer relations.

The OCMC is a specialised mediation centre which only addresses consumer complaints concerning e-commerce platforms, with a vision of making consumer grievance available online to anyone who is accustomed with information technology.

If a consumer is unhappy with the product or service of any e-commerce company, he/she can file complaint against that e-commerce platform with the OCMC by just registering and signing-up with the them and by just paying a registration fee of INR 100/- (Rupees Hundred Only) per party/per case. Post registration, the consumer needs to provide the OCMC with transaction details such as the purchase date, receipt date, invoice number, value of goods/service, nature of dispute, description of issue, etc.The OCMC, then, provides the opportunity to the consumer to directly communicate with the e-commerce company and negotiate with them to resolve the case and discover a mutually agreeable solution. In case the matter is not settled through negotiation or the parties are unable to reach any conclusion,the parties may appoint a third-party mediator for mediation.

The process of negotiation consists of three parts: a) make a settlement offer b) request to appoint a mediator and; c) have conversation similar to Instant Messaging/ Chat Box platforms. A time of 7 days is provided to parties after the date of registration to reach a settlement. The parties can directly opt for appointment of mediator instead of negotiating. Only when the appointment of mediator is requested, the OCMC shall appoint the mediator in five working days. In case no attempt to appoint a mediator is made by either party after initiating the negotiation after 7 days, the OCMC shall send a message/email to the parties to make the request. The OCMC shall not appoint a mediator if the request is not received as the process of mediation is voluntary and party centric. If no response is found as for 7 days, as mentioned above, the OCMC shall deem the case to be not settled and shall close the case accordingly. The process once settled cannot be reopened under any circumstance.

Once mediation commences, it shall conclude within 21 days and a one-time extension of 15 days can be taken after the approval of the parties. In case any party is found to be irresponsive for more than 10 days then the case shall be closed as unsettled.The mediation shall be terminated by the signing of a settlement agreement by the parties or by the decision of the mediator if, in the mediator’s judgment, further efforts at mediation are unlikely to lead to a resolution of the dispute or by a written declaration of a party at any time after a first discussion of the parties with the mediator.

The settlement through mediation shall be final after the parties sign the settlement agreement and the agreement shall have the same status as that of a settlement agreement that can be executed under Section 73 of the Arbitration and Conciliation Act, 1996.

The OCMC has published a clear set of Mediation Rules elaborating on the process of mediation, the role of the mediating parties, the role and the rules applicable on the mediators, the manner of appointment of mediators, etc. The OCMC has also set forth minimum principles and standards in the prescribed Code of Conduct for the OCMC and the third-party mediators empanelled with the OCMC to guide the conduct of mediators, to inform the mediating parties and to promote public confidence in mediation as a process to resolving disputes such as accessibility, transparency and fairness, privacy and confidentiality, self-determination, independence and impartiality, etc.

The key aspect of the OCMC is that all the information contained and distributed during the mediation process or through the OCMC shall observe the data protection law and confidential requirements established for the time being in force in India and the OCMC, including the mediators, shall make reasonable efforts to maintain high level of privacy and confidentiality with respect to access to such case files and other data.

Therefore, establishment of the OCMC, the appointment of eminent lawyers and judges in the panel of mediators of the OCMC and the proposed changes in the Consumer Protection Act, 1986 and the Consumer Protection Bill, 2015 are some initiatives taken by the Government of India to promote online transactions, reliance of consumers on advanced technology and to adopt a cashless lifestyle.

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