The application of the consumer protection principle in the UNCITRAL ODR rules and its implications for the ODR practice in China

Abstract

In the e-commerce era, litigation is often too expensive, complicated and time-consuming. Online Dispute Resolution (ODR), as a quick, cheap and amicable mechanism which better satisfies the needs of e-commerce, has been introduced and become increasingly appreciated by the e-commerce stakeholders. Despite the impressive growth of Chinese ODR platforms in practice (e.g., the Taobao Public Jury System and the Hangzhou Internet Court), relevant norms, standards and legal regulations that are indispensable for the long-term growth of ODR are still scarce in a broad way. Currently, most of the legal initiatives for ODR emanate from developed economies such as the US, the EU, and key international organisations such as the UNCITRAL. There is a wide legal gap to be filled for the ODR practices in China. Based on the existing theories and practices in relation to ODR and consumer protection, this study is developed in a twofold manner: 1. Based on doctrinal studies on relevant rules, norms and standards pertaining to e-commerce and consumer protection, put forward a regulatory framework for Chinese ODR that can formulate better redress strategies for handling consumers’ grievances and can help enhance consumers’ trust in the e-commerce market (from a theoretical perspective). 2. Based on empirical studies of the foreign developed ODR providers (such as the credit card chargeback system and the blind-bidding system) and Chinese ODR projects (such as the Taobao Jury System and the Hangzhou Internet Court), propose a nationwide ODR project to inform the government’s decision-making process in promoting the e-commerce market, and to guide practitioners in their efforts in securing online marketplace (from a practical perspective). The thesis examines consumers’ access to justice in the online marketplace. It provides a review on the UNCITRAL’s six years of negotiations over ODR and explores its deliberations on the ODR procedural rules. It is fair to say that delegations shall think outside the box rather than only adopting traditional ADR models for the design of ODR system and rules. The rapidly evolving online market and the advancing information technology require correspondingly ODR systems that constantly learn. And a well-established ODR system does not simply apply offline dispute resolution procedures to the online world, but rather recreates and optimises the entire set of dispute resolution procedures. The study proposes a centralised ODR platform which connects independent accredited domestic ADR entities. The significance of such a platform is not only reflected in the resolution of conflicts. Its true value lies in the prevention and control of future disputes, the adjustment and improvement of trading mechanisms, and the positive promotion of the ecosystem of the entire e-commerce market. Achieving such a goal can be extremely difficult, but efforts must have to be taken if e-consumers are not to be left stranded. It is undeniable that the possible loss and damage to each individual consumer in online transactions can be very low, whereas the scattered damages accumulated can be enormous and widespread. The study believes it is underestimated how much frustration there can be within the existing dispute resolution system for online transactions in China. The study is dedicated to formulating a viable Chinese online dispute resolution system which can better protect online consumers from unfair marketing practices, unsafe and counterfeit products, insecure payment methods as well as loss of personal privacy, ensuring that justice exists for all.