October 22, 2020

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LegalTech and Online Dispute Resolution need of the hour in India

The National Institution for Transforming India, (NITI Aayog), is the premier policy ‘Think Tank’ of the Government of India, providing both directional and policy inputs.

While designing strategic and long-term policies and programmes for the Government of India, NITI Aayog also provides relevant technical advice to the Centre and States

NITI Aayog is keen to explore the potential of Online Dispute Resolution (ODR) to enhance the Ease of Doing Business in India.

Ease of Doing business has been a priority area of the government for combating deceleration in the growth of GDP and investment.

COVID-19 has instilled an urgent need for ODR that requires decisive action, with the likelihood of a spurt in disputes before the courts – most notably in lending, credit, property, commerce and retail.

With this as a background, a discussion with heads of legal firms and industry representatives and NITI Ayog was co-hosted by Confederation of Indian Industry (CII) on 8 August.

ODR is the resolution of disputes, particularly small- and medium-value cases, using digital technology and techniques of Alternate Dispute Resolution (ADR), such as negotiation, mediation, and arbitration.

LegalTech in general and ODR, in particular, can be a game-changer for citizens as well as Indian businesses, particularly MSMEs. It has the potential to

  1. reduce the cost of dispute resolution in the face of rising cases and disputes
  2. allow citizens and consumers to raise any grievances they may have at the click of a button and have an independent third-party firm review and address their grievance.
  3. in the medium-term, once ODR firms have collected enough data around disputes, it can start feeding back into business decisions regarding the product and service being offered

The benefits can help businesses sharpen their offerings apart from improving access to dispute resolution. They can truly help businesses enhance consumer trust and improve customer retention.

Amitabh Kant, CEO, NITI Aayog said India is witnessing a visionary period in the history of India’s court system.

In today’s age of data-driven solutions and machine learning, ODR provides the potential to resolve a substantial percentage of disputes at the site of their occurrence without burdening the courts.

Progressive and disruptive changes in justice delivery are critical components that can alter the course of access to justice in an unprecedented way.

Former Supreme Court Justice, B.N. Srikrishna said ODR could complement the court system. As an auxiliary to the system, it could limit the large numbers of litigations present in courts.

ODR does away with the need of the A litigant to travel, attend face-face hearings and can resolve disputes through the electronic platform. Online Dispute Resolution can help deliver justice to the doorstep of the litigant.

It was felt that pandemic has presented an opportunity to not just use technology to optimise the old way of doing things, but to be creative, create the right alliances and to bring in transformation.

This was the opportunity to reimagine dispute and conflict resolution for the future, for the 21st century and post pandemic era.

Innovative methods like Online Dispute Resolution have extensive application and can be used to resolve a wide variety of commercial disputes.

Recognising the essence of ODR, Confederation of Indian Industry (CII) has also undertaken a plethora of initiatives such as setting up a CII Centre for Alternate Dispute Resolution (ADR).

Through this Centre, CII plans to impart training and undertake analysis through research papers, seminars and conferences.

Interaction with various national and international arbitration forums and other stakeholders in promoting arbitration is also planned.

These initiatives will reduce time and cost to litigation and can advocate harmony in the legislature, executive and the judiciary.

It was opined that ODR should be promoted vigorously and any constraint in law or procedures that reduces its efficacy must be eliminated.’

A need to facilitate online ombudsperson platforms to resolve disputes at the pre-litigation stage was also proposed.

Online dispute resolution can be very substantive for India, it was expressed,  as it will bring the labour market outsiders back into the labour force.

People who prefer flexibility, gig economy and those who can’t commute will be greatly benefitted.

However, to enable ODR to reach its full potential will require an significant public-private collaboration.

ODR startups will be a critical stakeholder in this as they are the ones working on the actual solutions to the different use case categories.

A multi-stakeholder exercise will be undertaken in the coming weeks to enable ODR in India in a sustainable, efficient, and collaborative manner.

Desh Gaurav Sekhri, OSD, NITI Aayog, said: ‘We need to enable an ecosystem that is conducive for the entire landscape of stakeholders being active participants to make sure ODR becomes a point of first contact for dispute avoidance, containment and resolution.’