Legal Articles

ODR – A Solution whose time is already upon us

For as long as we can remember, we have heard of  cases or disputes in family or between friends or relatives, dragging on for many years. Every year additional cases get added to already overburdened judiciary and as such one cannot blame them for not rendering speedy justice,  as the sheer volume of cases will take many decades to resolve considering the pace at which new matters are getting added.

Though the docket explosion, as it is called, spans all types of civil and criminal cases, there is, however, a sliver of hope, which was hastened by the pandemic and which the government, to its credit, is apprised of and working on.

In November 2021, Niti Aayog released a report titled ‘Designing the Future of Dispute Resolution: The ODR Policy Plan for India’, the objective being “to scale dispute avoidance, containment and resolution online. The roll out of the stated recommendations in the report can help make India a world leader in using technology and innovation through Online Dispute Resolution (ODR) for effective access to justice for every individual.”

The Government recognised that, although it, by and large contributed to the largest percentage of litigations in Courts in India, enterprises are not far behind.  For instance, if one was to take a subset of the total number of cases for recovery of dues, filed by Banks and Non-Banking Finance companies, in only one type of forum i.e. Debts Recovery Tribunal (DRT) under the aegis of the Recovery of Debt Due to Banks and Bankruptcy Act 1993, the numbers are, as per Govt figures 160,000+ (as of Feb 2022)  – this when the act itself restricts the filings to, as the preamble states, “… shall not apply where the amount of debt due to any bank or financial institution or to a consortium of banks or financial institutions is less than ten lakh rupees or such other amount, being not less than one lakh rupees, as the Central Government may, by notification, specify.”. These figures are by no means high considering India’s geography and GDP levels, but they reveal only a fraction of the total number of civil and criminal cases filed by Banks and Financial institutions alone, leaving apart other Industries.

It is in this backdrop and pandemic related strain on judicial processes, the concept of ODR or e-ADR promises to help resolve or mitigate to some extent. ODR is the resolution of disputes, particularly small- and medium-value cases, using digital technology and techniques of ADR, such as arbitration, conciliation and mediation. It refers to the process of using technology for dispute avoidance, containment and resolution outside the traditional court system. As a dispute resolution avenue it can be provided both as an extension of the public court system and outside of it. World over, the potential of dispute resolution mechanisms, especially through technology, is being recognized. Increasingly, ODR has received impetus across Government, businesses and even the judicial processes to tide over the constraints due to Covid-19.

In India, close to 76 different start-ups and companies like Sama, CORD, CADRE, JustAct, Presolv360, IDRC, have automated the process of sending notices via SMS, WhatsApp, email and some have also attempted to solve the issue of bias in appointment of sole arbitrators to adjudicate cases by having algorithms to automatically allot cases to arbitrators.  For instance, Sama alone has taken up around 10,000 plus cases of ICICI Bank credit cards post pandemic and helped through conciliation and arbitration to help resolve these disputes.

The cloud based software solutions of these startups, e-signing and digital signature of notices and awards, e-dispatch of notices to registered mobile numbers and email-ids of respondents, help speed up the traditional methods of noticing to disputing parties and thus it solves a small hurdle in the traditional legal process of using the process server.

The resolution rates of filings with these ODR startups is quite high and Sama alone has a resolution rate of 50% and average time taken to close a dispute can be as low as 15 days as per its founder, Pranjal Sinha.

Considering the pace of growth in GDP numbers and need for speedy resolution of Civil disputes, it is inevitable that ODR is scaled up, given due recognition in law. With the Government recognising this vide the Niti Aayog report of Nov 2021, it is a matter of time that such solutions are adopted by the wider industry, Banks and other financiers.           The so-called docket explosion needs to be contained at least in areas such as credit/loans and other types of civil disputes -where litigating parties are savvy in using internet based tools and smartphones. ODR is thus is a revolution waiting to happen to the legal space and sooner it takes off, the better it is going to be for the Indian economy.

About the author

K.R. Subramanian

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