Since
1999 the world has seen a gradual evolution in the B2C online
marketplace. Much attention has been focussed on the dramatic rise and
fall of market valuations for Internet firms and, in the aftermath of
the “dot com” crash, it would be easy to overlook the consistently
upward pattern of growth in online retail sales. For example, official
second quarter 2002 figures for retail e-commerce in the United States
are up 24 % compared to the same period in 2001 and the 2001 figures
were 30 % higher than those for 2000. Retail Internet sales for 2001 in
Norway are up 155 % from 2000, and Canada reported an increase of 67 %
from 2000 to 2001. In the UK, online sales to households increased by
53% from 2000 to 2001. Unofficial estimates of European consumer
spending online suggest a growth rate of 48% in 2001 and 70% in 2000.
Nevertheless, much of the potential for B2C e-commerce has yet to be
realised.
As
with offline transactions, consumers will inevitably confront fraud,
delivery problems, defective merchandise, misuse of personal information
and billing complications when engaging in E-commerce Such problems
could be expected to give rise to consumer disputes, some of which may
not be readily settled with the supplier.
Therefore,
E-commerce arises particular challenges, such as: Whose
law applies when disputants are in different jurisdictions? Are the costs of litigation or unfamiliarity with procedures in a
particular jurisdiction a fundamental impediment to effective action by
consumers in B2C disputes? Is the potential cost of litigation in some
jurisdictions sufficient to deter many businesses from engaging in
e-commerce with consumers in those jurisdictions?
In this context it is
becoming clearer, that traditional means of dispute resolution are not
well-suited to the fast-paced and globalised world of
business-to-consumer e-commerce. Accordingly,
there is growing interest in online alternative dispute resolution (Online-ADR)
mechanisms that might provide timely, low-cost, transparent and
accessible responses to those challenges. Cost-effective Online Dispute
Resolution (ODR) schemes are seen as the only viable means of redress. A
lack of trust in this area of redress could detain consumers from
e-commerce.