Conference on Alternative Dispute Resolution, 3-4 December 2018
PrintAfter the successful conferences in 2016 and 2017, the Board organised another conference dealing with the issue of alternative dispute resolution. On 3–4 December 2018 the Third Alternative Dispute Resolution Conference was organised at the seat of the Hungarian Academy of Sciences with the participation of Hungarian and foreign contributors.
The event, which was organised jointly by the Magyar Nemzeti Bank, the National Office for the Judiciary and the Financial Arbitration Board with the support of Wolters Kluwer Hungary Kft., dealt with the issue of rapidly developing digital solutions and was entitled “Alternative dispute resolution at the gateway of digital challenges”.
The opening address was delivered by dr. Erika Kovács, Chair of the Financial Arbitration Board, followed by the welcome of the participants by Dr. Tünde Handó, President of the National Office for the Judiciary and Dr. László Windisch, Deputy Governor of the Magyar Nemzeti Bank.
In her welcome speech, Dr. Tünde Handó, President of the National Office for the Judiciary recalled the rapid change brought about in the past 10 years. She emphasised that digital development should be driven rather than contained. She also pointed out that the digital world was changing progressively in an increasingly wider area, and digital development had also reached the judicial organisation. Hungary was the first country in the EU to introduce online court proceedings. The digital change affects human nature, which is also changing. Lawyers graduating today, who are members of generation “Z” want to become successful quickly, they demand changes, insist on their freedom and have expectations; they should also be made partakers of the judicial organisation while retaining judicial authority, – she said
In his welcome speech Dr. László Windisch emphasised that the subject of the conference – alternative dispute resolution at the gateway of digital challenges – was highly topical given the major changes ahead of us. He presented how digitalisation had changed people’s everyday life, and that it constituted a huge opportunity in all fields of life. It is obvious that there is no other choice, digitalisation cannot be avoided.
Now is the time for regulating this field, but legislators and lawyers need to be extremely careful when laying down ethical and moral foundations. If a dispute is decided quickly, it does not necessarily mean that it has been settled. For this reason, it will be crucial to have a steady hand when choosing between the different options and directions and making the right decision on the basis of the data gathered. Various legal issues can be digitalised, robo-advisers can be produced, but equity and justice cannot be achieved via artificial intelligence. Those dealing with dispute settlement and mediation are well aware of that reconciliation between people cannot be digitalised, because: “It is only with the heart that one can see rightly” (Antoine de Saint-Exupéry), he said at the end of his speech.
“All Hungarian citizens, all local Hungarian communities and all Hungarian enterprises should benefit from digitalisation.” Dr. Károly Balázs Solymár, Deputy State Secretary for Infocommunication, said in the introductory part of his speech that at the beginning of his career he was dealing with online trade, and his long-term goal was the large-scale rollout of online trade. Since then time has proved that online trade and digitalisation has gone through significant development. It is an indisputable fact that by now digitalisation has become a phenomenon fundamental to everyday life. The Government of Hungary has recognised the importance of digital transformation, so the Government’s aim is to make all Hungarian citizens, all Hungarian local communities and all Hungarian enterprises benefit from digitalisation. In the following, he presented the Government’s actions taken up to that point, as well as the Government’s plans yet to be implemented in practice to ensure safe digitalisation.
Péter Virányi, sociologist, university professor, Candidate of Social Sciences – who also has in-depth knowledge of special fields such as sociology of education, pedagogy, communication sciences and psychology – gave the opening lecture of the conference, which was entitled “Consumer behaviour of the digital generation”. “How has the members of generation Z become superconsumers?”- was the question he raised and then answered in his lecture. Generation Z – i.e. those born in the period between 1995–2009 – is the first global generation for whom the use of digital tools is totally self-evident; the members of this generation navigate within two worlds: the real and the virtual world. They are often identified as the Net Generation, because smart phones and computers form integral parts of their everyday life, they get along fine on the internet, they are permanently available on different communication channels (Facebook, Twitter, etc.), while at the same time they often feel embarrassed in the real world, where they get into conflicts and realise that the rules of virtual life do not apply there. They spend a third of their life in possession of electronic devices, and they have no memories of the world without the internet. They spend an average of 3–4 hours online every day, 81 percent of them make and share video recordings or photographs on a weekly basis, they rarely read books, and 67 percent of them learn about what is going on in the world from the television, while 13 percent of them are not at all interested in what is happening in the world. 95 percent of young Hungarians below the age of 25 have smart phones, and 75 percent of them use a search engine on their phones, while 76 percent keep informed about products online.
The demographic gaps are widening to a significant degree in the countries of the EU; while in 2010 the number of 60–64 year-olds and 15–19 year-olds was approximately equivalent (nearly 30 million persons), after 2050 – unless the trends change – the number of 60–64 year-olds is expected to exceed the number of young people by 20 million. What will the future generation be like? What sort of employees will the members of generation Z become? ‘Who are the “seemingly invisible” leaders shaping this generation?’ were the questions raised by the lecturer.
This generation is fundamentally characterised by the fact that they have been socialised in consumer culture, they demand interactivity and experiences, they assess the value of things by determining how entertaining they are, they are impatient when their needs have to be satisfied, and their further characteristics include practical thinking, need for comfort, divided attention, and difficulty in maintaining focus. Hierarchy and authority do not mean much for them, they enter the labour market with unrealistic expectations, being independent is important or even the most important for them. Generation Z is the generation with the greatest purchasing power ever, they also have a significant influence on their parents’ purchasing behaviour, so it is quite understandable that marketing people want to take advantage of the characteristics of this generation. Generation Z is the largest media consumer, its members are not afraid of changes, and even younger age groups become the targets of advertising. This generation is the target of totally incorporative marketing. The culture of “buy it, take it, use it” is the fundamental principle, everything must be immediately accessible and perfect; it is not simply about encouraging consumption, but about bringing up consumers and selling happiness. Generation Z consumes more than any other generation before, which may have serious consequences. This generation is threatened by addictions, obesity, diabetes and depression. Apart from marketing people, their parents’ generation is also responsible for this. Health-conscious generations may be followed by a generation, the average life expectancy of which will be lower than that of their parents, – warned the lecturer in the end.
Six young Hungarian people – Gergely Bihary, Péter Lakatos and Márton Elődi, computer engineering students, Bálint Danóczy, economics student, Dániel Bihary, law student, and Kristóf Nagy, designer student forming the Revealu Team, i.e. the representatives of a Hungarian start-up – won the Global Legal Hackathon competition organised in New York on 20–22 April 2018. Gergely Bihary, Dániel Bihary, Bálint Danóczy, members of the winning team and Belián Baticz were given the opportunity to introduce themselves at the conference. During the panel discussion moderated by Gábor Tóth (Global Innovation Director, Wolters Kluwer Legal & Regulatory), they explained that the best 14 projects of more than 300 teams participating in the global competition were weighted against each other in the final round. Among the European teams only a German team was able to reach the finals apart from the Revealu Team. At the creative global competition for programmers they had to present digital innovations that have the potential to revolutionise the legal sector.
The Hungarian team chose the topic of the GDPR, because the results of their preliminary marketing research showed that the majority of companies did not have solutions for the handling, administration and fulfilment of data requests. REVELAU BUSINESS Service, the winners’ design theme can now provide a solution for this. The Hungarian team created a programme, with which it can be checked with just one click what type of data large tech companies such as Google or Facebook store. By presenting charts and reports, the application makes it easy to interpret “big data” retrieved in this way, and after the analysis has been made, it can be deleted with one click of a button. At the competition two winners were announced in two categories each, Revelau was one of the winners in the Private Sector category. The event was looked upon with great interest all over the world, and it was supported by large international companies such as IBM, Microsoft, American Express or Reuters.
Following their victory in New York, the team also entered a start-up competition in Budapest, in which they won again. This was the point where they became sure that their idea was not simply interesting and valuable for lawyers, but it was also appreciated by others. They also decided to launch the service developed by them, as it would be excellent for all companies that had already spent millions on compliance with the GDPR and wanted to ensure transparency for their clients while reducing the time needed for satisfying data requests from 30 days to only a few seconds.
The Revelau Business Service has three versions: the first one reduces the administrative burden by setting up an automated portal for submitting data requests, where all requests can be handled on the same interface, and it also ensures workflow management within the company, as well as appropriate exporting for authorities. The second version enables the exchange of messages within the application, while with the help of the third version the fulfilment of requests can be fully automated, and the service time can be reduced to a few seconds.
When asked about their future plans and goals, they said that since October they had been working within K&H Bank’s incubator programme, and they had been provided with an office and financial support for a whole year ahead, and they also had large company mentors. They are planning to launch the first version of Business Service in January 2019, but applicants for testing can contact them even now. At the beginning of next year, they will start preparing an investment plan to answer the question on how they will be able to grow and make developments. They want to become market leaders, and as they themselves put it: “If you want privacy, choose Revealu!”
The first foreign lecturer at the conference was James Walker, founder, CEO and driving force of Resolver. He set up his company in 2013. Resolver is a leading and independent service for supporting consumers, which provided help for consumers and ensured a better outcome for everyone in over 3.2 million cases by the end of 2018. In the first year of the company’s existence James was the only employee in Resolver’s team. Since then James has been considered as a recognised expert in consumer rights. He built up Resolver from a company, which initially hoped for 30 cases per day, into a company handling twice as many cases already before 1 a.m. every day. Besides running the company, James writes articles on a weekly basis for local and international journals, and he is often contacted for guidance and explanation on consumer cases even by legislators and by the government.
In his lecture given at the conference and entitled “The role of FINTECH and modern technology in dispute resolution”, he revealed that one of his own experiences represented the starting point for his company. He personally experienced the difficulties of handling complaints and disputes arising between consumers and businesses they come into contact with. It was after this that he started to set up an online complaint-handling platform, where they were able to provide efficient help for consumers in resolving their complaints. The aim was to set up a well-functioning system, which is plain, easy to handle and provides a solution free of charge for any consumer, both in respect of simple cases and more serious cases involving larger amounts. The primary task of Resolver is to reach out to consumers and inform them about their rights, obtain information relating to the given complaint and select key information. In the following they take a position as to whether it is necessary to submit a complaint against the company in question, or whether it is worth doing so. The process of submitting complaints, as well as the handling and forwarding of complaints is supported by the use of forms, which simplify and also accelerate administration and problem-solving. At the same time, Resolver does not simply support consumers, but it also makes it easier for companies to resolve complaints, by arranging and selecting information relating to the complaints. Its primary objective is to provide independent help for both parties.
General experience shows that the smaller the gap is between the two parties and the lower the amount at issue is, the more ready the company is to reach a compromise and the easier it is to find a solution to the dispute. The more easily accessible a company makes complaints procedures for its customers, the higher proportion of consumers will make a complaint in the case of harm suffered by them, and the higher the proportion of complaints will be in which a solution is reached between the parties. And vice versa: where a company makes it difficult to lodge complaints, the number of complaints submitted is much lower, and the proportion of dissatisfied customers is much higher. If a lodged complaint is not suitable for being forwarded to the company as a complaint, then the consumer’s report is sent to the competent ombudsman. Resolver primarily consults its customers via Chatbot, which was initially launched on Facebook, but communication channels are continuously extended, and today, consumers can be contacted via Telegram and WhatsApp, and also in text messages. In several countries, complaints can also be submitted now via customer portals. In the interest of providing help quickly and efficiently, when consulting customers, Resolver devotes special attention to judging the seriousness of the case (e.g. if the complaint is reported on the phone, then it is probably less serious than a complaint reported from a laptop), to the issue of vulnerability (e.g. dependency is linked to financial vulnerability), to filtering out the probability of escalation, and to determining how the case would proceed (e.g. whether it would be taken to the conciliation panel or to the ombudsman). During the development of Resolver, feedback from customers is also an important milestone.
Resolver is a technology company, so it does not undertake conciliation, it does not have the powers of an ombudsman, but it acts as a facilitator in disputes and it provides customers with all possible information for lodging complaints, as well as the necessary forms, and it provides feedback for customers on whether their complaints are justified. In the near future Resolver is planning to provide efficient help in 4–5 million consumer cases in any segment of the market (judicial, parking, energy, telecommunication, railway company or financial legal disputes). In short, as the lecturer put it: Resolver’s aim is to make consumers happy.
James Walker’s lecture was followed by a presentation on the process and the results of digitalisation that has taken place, is currently going on and continuing in the future in the Hungarian justice system. This topic was presented by Katalin dr. Turcsánné dr.Molnár, Chair of the Székesfehérvár Tribunal, and dr. Szabolcs Kékedi, Head of the Department of Electronic Procedures, at the National Office for the Judiciary, during a panel discussion entitled Digital court – “All will be yours in the crystal ball”. “Digital constellation” – in their lecture they discussed issues such as e-lawsuits, the collection of anonymised decisions, the videoconferencing system, electronic communication in respect of court cases, and the so-called “convenience services” such as the lawsuit duration calculator or notifications sent via text messages or e-mail.
This is one of the development paths involving the editing and standardisation of court decisions, the electronic development of the publication and anonymisation of court decisions, the complete computerisation of the documents created during the procedures, and providing access to files via electronic means, and it also involves creating an online link between public registers and specialised justice systems; this is called the e-file. All the above makes the work performed at courts easier and simpler. The other major development path is constituted by the project aimed at the realisation of remote hearings and courtroom video and audio recording. Remote hearing means that the hearing of the parties to the dispute staying at different geographical locations takes place via computer, while paper-based records are drawn up at the same time. It means that the individual parties do not need to be physically present at the same place to be able to hear them in the framework of a court hearing. With the help of courtroom video and audio recordings the hearing of the parties to the dispute is recorded by computer, completely independently of any location, and the recording itself serves as the official records for the court. In order to use these technological innovations, the courts used a closed-purpose communication network until 31 December 2017, and since 1 January 2018 they have been using an electronic communication network.
The legal framework for all this is provided by Council Recommendation ‘Promoting the use of and sharing of best practices on cross-border videoconferencing in the area of justice in the Member States and at EU level’ (2015/C 250/01). Based on these recommendations, the rules of remote hearing were included in Chapter XLVII of the new Civil Procedure Code. As regards the aims, the lecturer presented that the National Office for the Judiciary had a threefold objective when introducing the use of these modern tools. One of these was to set up a modern and cost-efficient remote communication justice system suiting 21st century demands and expectations, which is interoperable with other systems. The other aim was to make the recording of procedural acts and reporting faster and more transparent. And the third aim was to reduce the administrative and other burdens borne by court staff. The tools mentioned above are used both in civilistics and in criminal cases, and even in the field of mediation within courts. So far 72 terminal points for remote hearing have been established, of which 30 terminal points support criminal judicial duties – with one terminal per regional court –, while 42 terminal points support judicial tasks in the field of civilistics – with two terminal points per regional court.
Although the Hungarian justice system is advanced in digitalisation, there is still work to be done. According to the plans, 112 further terminal points will be set up in small and medium-sized courtrooms at regional courts and at seats of district courts. Last but not least, they intend to devote special attention to education tasks too, as all court staff members need to learn the use of the new tools and systems, for which mutually supportive and loyal cooperation between lawyers and IT experts is required at national and local levels, they added and concluded their lecture.
Dr. Orsolya Görgényi (Szecskay Attorneys at Law) and Dr. Miklós Klenanc (Réti, Várszegi & Partners Law Firm PwCLegal), lawyers, gave a lecture entitled ‘Digitalisation of the legal paractice’. They pointed out that lawyers were also facing the challenges associated with digitalisation. They explained that a new lawyer model was emerging, and it became obvious that it was only possible to carry on competing on the market, if – similarly to other industries – lawyers also learnt to look at their own activity from a business point of view, and changed their patterns established earlier by learning from their clients’ needs. According to a survey, 60 percent of young lawyers find that lawyers themselves constitute the greatest threat to the legal profession, i.e. they are the ones who stand in the way changes. Ultimately, lawyers’ activity is also a type of “business” – only their ethical and professional rules distinguish them from other market participants –, so lawyers also need to give some thought to what exactly they are “selling on the market” to customers.
According to a French study, 90 percent of people do not realise it when they have a problem of legal nature, and only a fraction of those who actually come to realise it turn to a legal expert. They primarily find out information from the internet or online platforms, and they contact a lawyer only as a last resort. When choosing an expert or lawyer, trust is a fundamental issue for them. According to available data, 75 percent of them find convenience and easy access important, and they consider the price of the service only after these issues. It can be stated that digital channels are equally suitable for attracting new customers and for more efficiently serving already existing customers. Lawyers were affected by technological development in four waves. First, programmes supporting administration and increasing efficiency appeared (e.g. invoicing programmes), but according to a US survey, these programmes are not used by many lawyers, although they spend a significant part of their working time doing administration and obtaining new clients. This was followed by the automation of documents, and then by using the potential of large amounts of data. And finally, the use of artificial intelligence appeared. As for the latter, in an experiment it took 26 minutes for a legal software to analyse 5 confidentiality agreements with a precision of 94 percent, which took an average of 92 minutes for lawyers, only reaching a precision of 85 percent.
Time will come in alternative dispute resolution too, when disputes will be resolved by artificial intelligence, but it obviously needs to be regulated. Legal regulations should be ensured that satisfy the demands of clients seeking justice and truth, and provide a competent and unbiased service, which is swift and available to anyone. But humans are creatures of instinct, driven by their emotions. How safe will they feel, if their disputes are settled by some software? This is a great opportunity for lawyers! Let us hope that humans can still be better than a programme, because as opposed to machines they are capable of empathy and creative solutions. Consequently, digitalisation represents a great challenge for lawyers too. We are facing or already are right in the middle of a radically new world. It is the lawyers’ opportunity and also responsibility to make sure that “law remains the art of good and fair”, – they ended their lecture.
Dr. Zsolt Hajnal, Chair of the Arbitration Board of Hajdú-Bihar County, held a lecture entitled “Dispute resolution solutions of online marketplaces”, in which he presented the characteristics of the operation and the development of online marketplaces. Among the advantages offered by online marketplaces, he emphasised that it had enabled the emergence of a worldwide market. The appearance of online marketplaces promoted competition between traders, both in respect of the quality and the price of products. Traders and service providers equally benefit from online marketplaces, which can be operated anywhere in the world. He emphasised that consumer trust was the key driver of online marketplaces. Consumer trust can be ensured and strengthened through legislation, the application of law, and also through voluntary commitments made by operators, and consumer-friendly systems. He also presented the results of legislation achieved so far. In this context he pointed out that laws had been made in the knowledge of arising problems, through follow-up. First, rules relating to e-commerce were laid down, and they were followed by the directive on consumer rights and the rules of alternative dispute resolution and online dispute resolution. Among the results of the application of law, he presented several cases, such as the case of eBay in the field of online auctions versus e-commerce services.
Through national and foreign examples he presented the efficient tools used by online marketplace operators to win and strengthen the trust of customers in order to encourage purchases of this type. Consumers’ worst fear in online purchasing is whether they would receive the ordered product in time, or whether they would receive a product with the parameters chosen on the basis of the advertisement. In the case of this type of purchasing too, it is essential to guarantee that purchasers are able to assert their consumer rights efficiently, just as if they had purchased the product in the traditional way. The examples presented clearly demonstrated that both domestic and foreign service providers operating online marketplaces were introducing an increasingly wide range of consumer-friendly measures to win and ensure consumer confidence. It can be mentioned as a positive result that even without legal prescriptions there are examples of both domestic and foreign operators guaranteeing the resolution of potentially arising legal disputes for consumers making purchases on the marketplace below a certain value limit. Enterprises operating online marketplaces continuously offer new solutions to encourage both sellers and consumers to use the marketplace. They place especially great emphasis on positive customer feedback, on the basis of which they set up a ranking list of sellers, and those at the top of the list are granted extra advertising options or reductions from the commission to be paid. The lecturer mentioned the issue concerning the classification of sellers as the sore point of online marketplaces, i.e. when a seller should be regarded as an enterprise. He presented examples to draw attention to the new forms of scam emerging in line with the changing of shopping patterns, against which the current legislation cannot protect consumers. He summed up his lecture saying that in the future this form of abuse would be efficiently suppressed through the practice of legislation and the application of law.
Dr. András Zsigmond (Legal Assistant – Implementation of the Consumer Protection Cooperation Regulation) presented the European Union’s online dispute resolution platform, the ODR platform in the last lecture of the first day of the conference. In his introduction he described in detail the three fundamental requirements set out in Directive 2013/11/EU on alternative dispute resolution for consumer disputes (Directive on consumer ADR) – availability, compliance with the requirements set out in the Directive, obligation to inform –, and the most important deadlines for transposing the Directive on consumer ADR into national legal systems, as well as the measures taken. He was pleased to note that Member States had reported 430 alternative dispute resolution forums using this platform across the Member States. The ODR platform established by Regulation (EU) No 524/2013 (Regulation on consumer ODR) has been available for European consumers and traders since 15 February 2016, and it is intended to enable the consumers and traders of EU Member States, Norway, Iceland and Liechtenstein to settle their legal disputes arising in connection with online sale of goods or services, out of court. The dispute resolution bodies registered on the platform are independent organisations and/or persons. Their aim is to help consumers and traders to settle their disputes out of court. The ODR platform facilitates communication between consumers and traders, forwards complaints to the relevant alternative dispute resolution forum, and also provides the opportunity to settle such legal disputes on the platform.
The online dispute resolution platform is simple to use: entities need to register themselves on the interface before first use, and then users are given guidance about the necessary steps throughout the procedure. Complaints can be submitted instantaneously, or they can be saved as draft for a maximum period of six months. After six months, drafts are automatically deleted by the system for reasons of data protection. If the trader has agreed to the complaint being settled in the scope of a dispute resolution procedure, then within 30 days the parties must come to an agreement concerning the dispute resolution body they would ask to examine their complaint. If they fail to come to an agreement on the dispute resolution body within 30 days, no further processing of the complaint will take place. According to experience obtained so far, the strengths of the ODR system include the significant number of visits, the large number of submitted complaints, high consumer satisfaction, multilingualism, simple communication, the fact that it is free of charge and that the benefits of the structure are exploited. The network of contact points helping online dispute resolution provides support all along the procedure. Based on experience, the network of contact points is functioning efficiently, and there are contact points in all Member States. In order to enhance traders’ commitment and improve the processes, the European Commission organised events and roundtable discussions with the participation of the main stakeholders of the most frequently affected areas in 2017 and conducted an ODR campaign for consumers and traders around Christmas 2017 and in August 2018, respectively. The website was updated in 2018 to offer a more refined version, more extensive information on consumer rights, and a more efficient messaging function for traders. The year of 2019 will be an important part of the next period: the ADR/ODR report will be submitted, which may contribute to the experience obtained so far about operation, discussions with the stakeholders will continue, and based on experience obtained so far there will be a continuing need for efficient communication activity, – he ended his lecture.
The opening lecture of the second day of the conference entitled ‘Digital dispute resolution and the world 4.0’ was held by Erika Csemáné Dr. Váradi, Head of the Alternative Conflict Management and Dispute Resolution Interdisciplinary Research Centre. As a source of inspiration, the lecturer quoted a prophecy by Erich Pinchas Fromm, a philosopher, which says that 'The danger of the past was that men became slaves. The danger of the future is that men may become robots.’ She emphasised that digital dispute resolution offered innumerable opportunities for the extensive use of information and communication technologies (ICT), but it also raised numerous questions and doubts about how it would be possible to provide even better solutions in dispute resolution. According to critics, technical obstacles may occur in respect of such ICT (missing hardware, software, data transfer problems, quality deficiencies), and certain psychological obstacles can also be observed.
She pointed out that digitalisation is a process that cannot be disregarded. It has several consequences that are significant from the aspect of the change in society. Given that the internet has become commonly used and widely available, technical development affects all members of society and induces a generation change. The method and extent of internet use by the different generations – the so-called ‘veterans’, the ‘baby-boomers’, generations X, Y, Z, and the youngest generation Alpha – is completely different. A further consequence of development is the IT paradox: the emergence of collective loneliness and the consequences of loneliness (depression, addictions). According to a thought-provoking national survey, the average time spent using ICT on a weekly basis is multiplying, while the average time spent doing family activities on a weekly basis is significantly decreasing.
She described the nature of the information society that has emerged as a consequence of technical development, as well as the challenges of this society, and the factors for and against this society. According to the definition created by Yoneji Masuda, a Japanese professor of sociology, the information society is ‘a new type of society the transformation and development of which is driven by the mass production of information rather than material goods’. In this society information becomes a factor of power, and the power is with the one who produces and distributes information. The material foundations of the information society are provided by the new and intensely globalising net economy, global values appear. ICT is in the infrastructural background of the transformation of society. Due to accelerated development, the half-life of ‘valid knowledge’ acquired becomes shorter, which generates a constant pressure on individuals to learn and further educate themselves. This society is also characterised by the struggle between the net and the self, which may result in a ‘meta-social chaos’. The joint effect and consequence of all the above factors is increasing social insecurity. Because of the temporary nature of the knowledge acquired, there is less certainty and foresight, and a new system of social inequalities emerges, – the lecturer warned.
Referring to the theory of Manuel Castells, Spanish sociologist associated with research on communication and globalisation, the lecturer presented that the new e-exclusive society is of an exclusionary nature, places and persons that are irrelevant for the net are excluded from the flow inside the net. The excluded ones suffer increasing disadvantage, which induces poverty, and a lagging ‘Forth World’ appears at horizontal and vertical levels. On comparing the definitions of online alternative dispute resolution, online mediation and democracy, the lecturer pointed out several common characteristics: participation, responsibility, volunteering, equality. Parties turn to mediators based on their voluntary and free decision, because they have a conflict, which they are unable to resolve by themselves. During mediation it is important that parties should be able to undertake responsibility for the emergence of the conflict, because by this they become competent to resolve the conflict. In mediation, equality should be asserted between the parties on the one part (the mediator’s expertise is essential, peace offered by one of the parties from a position of power does not lead to reconciliation), while on the other part there should be an equal relationship between the parties and the mediator too, emphasising that one of the mediator’s important tasks is to prevent the deepening of the conflict and strengthen communication aimed at resolving the dispute. At the same time, mediation is clearly incompatible with exclusion, as the key words of traditional techniques, circular and conference models are reconciliation, parties’ active participation, inclusion and readmission. Mediation and alternative dispute resolution solutions are characterised by inclusivity, accepting and respecting the diversity of individuals within a given community – also with a view to differences of any kind –, and thus ensuring equal opportunities. In the context of online dispute resolution, the fundamental features of mediation must be taken into consideration, and these basic principles must be asserted, – she ended her lecture.
The second foreign lecturer of the day and the conference was Rosa Taban, who presented how online dispute resolution was organised in France and shared her experience on the new challenges faced by dispute resolution in France and the answers given to these challenges. We all experience how fast the world is changing around us, – she started her lecture. On the one part, processes in business life have accelerated, but apart from work we also face in other fields of life too that we are expected to find quick solutions, and so we also expect such solutions from others. As a result of this, we need to face new and a growing number of conflicts that never existed before. Today you can buy a product on the internet by only three clicks of a button, but if any problem arises in connection with this rapid transaction, the process of dispute resolution may last for months. In order to handle this situation, a few online dispute resolution forums have been established in France, with the help of which people can settle their disputes easily and fast, at much lower costs as compared to traditional solutions, she said.
‘Demanderjustice.fr’ (assistance before state courts) is a service aimed at helping consumers who are not acquainted with legislations so as to enable them to contact the other party to the dispute by mail, without involving a legal representative, before turning to court, thereby attempting to settle their legal dispute amicably. If despite this no satisfactory solution is reached in the dispute, with the help of the service the parties can prepare submissions containing standard legal texts, and so they can turn to the court directly. After selecting the subject and providing details on the legal dispute, the platform sends official letters and guides the user along the dispute resolution phase before turning to court, or – if necessary – through the litigation procedure. The system was launched in 2012 for handling cases involving small amounts, where the amount in dispute remains below ten thousand euros, and where legal representation is not obligatory under the Code of Civil Procedure. Use of the service is completely free of charge up until the point where the case is referred to court. Statistics so far show that 82% of those who have used the platform have come out successfully from the dispute, and 30% of the cases are resolved already at the first pre-litigation stage.
‘eJust.fr’ is an online arbitration platform. The parties, in an agreement concluded between them, may stipulate in a traditional arbitration clause whether in the case of legal disputes arising between them from the contract, they intend to use eJust or the court with jurisdiction and competence. This is a final choice in each case. The entire procedure takes place online, and platform users may choose between different packages. According to the fundamental principle of the service, as the case progresses, the more the applicant takes up the arbitrator’s time, the more it has to pay for the service (pay-as-you-go). ‘FastArbitre’ is another online arbitration platform established for arbitration in commercial affairs. It can be accessed in six languages, and its use can be stipulated in a traditional arbitration clause too. The procedure can be divided into three phases: the amicable phase, the arbitration phase and the arbitral award. Use of the amicable phase is free of charge, while users in the other phases must pay a fee. This service has been available since 2016. 90% of the 150 cases submitted so far was resolved in the first phase, i.e. free of charge, and only 10% of the cases got as far as the arbitration phase. Although this situation is favourable for the users of the service, if the proportions remain the same, those who established the service may find that the operation of the system is not financially viable.
Unlike the platforms described above, the TAAF (Family Affairs Arbitral Tribunal) may proceed in family law matters. Its establishment in France was preceded by intense debate, as its critics questioned the necessity of arbitration in this field. Due to the particular nature of the subject, the system merges elements of online and traditional, personal alternative dispute resolution. This the latest online alternative dispute resolution forum, which was set up in June 2018. Currently, an average number of 30 claims are submitted to the platform on a monthly basis, i.e. 1–2 claims a day.
What exactly do we expect from online dispute resolution? – the lecturer asked. Do we want to access the already functioning justice system online, or do we want to extend the possibility of self-regulatory online alternative dispute resolution already realised in commercial practice to other fields, or do we want both at the same time? When talking about digitalisation, the necessity of education cannot be emphasised enough, – she continued. In support of this, the University Paris 2 Panthéon-Assas started a new course entitled ‘Digital Transformation and Legal Technology’, the aim of which is to increase awareness of the importance of this field and encourage students to launch projects in the legal field too. Digitalisation raises numerous confidence issues for customers, – the lecturer said. They want to know who makes decisions online in their cases, what sort of interest alignment system and ownership structure the decision-maker has, what incompatibility rules apply, or whether it has the necessary certificates, etc. When setting up an online dispute resolution forum, careful consideration should be given to how safe financial operation can be achieved without posing a potential threat to impartiality or future operation. It must also be determined who can access such a system: in legal disputes initiated by consumers against service providers or vice versa, or maybe in legal disputes between two private persons. Finally, it should also be determined, whether we want to do justice for the system users, or we only want to provide another service, where consumer satisfaction is the main aspect, – she ended her lecture.
After France, another European country’s alternative dispute resolution solution was introduced: the “Danish Financial Complaint Boards” was presented by its Chair, Ulla Wulff Kjær. In her lecture she described the Danish Financial Complaint Boards’ four independent Boards that are specialising in four different financial sectors, which are the following: the Danish Complaint Board of Banking Services, the Danish Mortgage Credit Complaint Board, the Danish Complaint Board of Investment Funds, and the Complaint Board of Danish Securities and Brokering Companies. Each of them has their own statutes, and their work is supported by a joint Secretariat. Each board is chaired by a judge who previously worked for the Supreme Court. Half of the members are appointed by consumer protection organisations and the other half by financial service providers. As of 1 February 2019, the first three boards will be merged under the name Danish Financial Complaint Board. This is expected to optimise work processes and make it easier for consumers to turn to the Board, – the lecturer said.
The deadline within which the Board is expected to conduct its procedure is 90 days following the receipt of the relevant data needed for making a decision. Regarding the outcome of the procedure, the submitted petitions can be found partly or fully substantiated, or unsubstantiated. Experience shows that in 40% of the cases the petitions were found substantiated. The Board does not proceed in cases within the jurisdiction of a different organisation, or in cases in which another board or organisation has already made a decision. Its decisions are not binding, and its decisions found substantiated or partly substantiated can be challenged in district courts within 30 days. If none of the parties initiate a review of the decision, the petitioner may request the court to declare that the decision is an enforcement order. The Board’s decision is without prejudice to the petitioner’s right to take the case to court, but experience shows that financial service providers implement most of the Board’s decisions, – the lecturer said. Before 2015, the Board performed its work by traditional means, on paper. After being appointed as Chair of the Board, the lecturer changed this situation. Upon her initiative, the Board developed an online platform incorporating the official national Danish personal identification system – NEM ID (simple identification) –, which was launched on 1 July 2016. By using the platform, petitioners can submit their petitions via the Board’s website, they can pay procedural fees and attach documents online. Financial service providers can submit their defence via the same system, and parties receive continuous feedback on the decision-making process, on the state of the proceedings, and on the Board’s decision, through this system. The latest technological development concerning the system was the introduction of videoconferences. The success of the paperless solution is demonstrated by the fact that while previously the handling of a case took 30-35 minutes a day, by now it has gone done to 2-3 minutes, and in respect of individual cases the length of proceedings has been reduced from 7 months to 5.5 months. Client satisfaction has also increased significantly since the introduction of the new system, with regard to the fact that the new system saves time for clients, it is easy to use, and it provides a safe environment for data transfer. As a result of the introduction of the new system, the Board has successfully reduced its costs, and instead of a staff of 10 members employed before, now 6 employees are able to perform secretarial duties. Due to the use of electronic files, the equipment costs have also reduced significantly. The success of the project is also demonstrated by the fact that the total costs of digitalisation roughly amounted to one year’s salary of one employee.
The latest challenge for the Board was represented by compliance with the GDPR (the general data protection regulation), in the interest of which numerous measures were introduced. The most important one of these was the privacy policy posted on the Board’s website, in which consumers are provided with detailed information on the data protection rights and procedures that they are entitled to. They are also proud of the fact that the Danish Data Protection Authority also found the online platform safe from the aspect of data protection, – the lecturer emphasised. The comprehensive digitalisation realised by the Danish Financial Complaint Board could serve as a model for many other alternative dispute resolution forums, especially those that are looking for a satisfactory solution in this fast-moving world to today’s technological and data protection regulation challenges, – she ended her lecture.
Consumer protection and alternative dispute resolution in communication and media. This was the title of the lecture presented by Dr. Edina Kastory, Commissioner for Communication, who explained that in recent years new challenges and new tendencies appeared in media and communication, which called for revising the sector’s earlier regulations, and resulted in a change in attitude in the digital world’s consumer protection. She described the legal environment related to this topic and explained European and national general and sector-specific regulations. She noted that new challenges had appeared in the field of communication, which had to be considered when reviewing the regulatory framework. In accordance with this, the New European Electronic Communications Code to be adopted contains significant changes. The Code lays great emphasis on giving priority to and protecting consumer interests. The aim of the regulations is to ensure consumers all over the EU have an equivalent level of security and efficient protection, and to provide access to all consumers with affordable and adequate communication services. By strengthening consumer protection rules, consumers are enabled to make their decisions in possession of transparent, up-to-date and comparable information.
Regarding the legal background related to the alternative resolution of legal disputes, the lecturer emphasised the significance of these forums being permanent institutions with independent and transparent operation, complying with EU requirements, and having appropriate expertise. In Hungary, out-of-court settlement of consumer disputes can take place in front of conciliatory boards attached to the county (Budapest) commercial and industrial chambers. When describing the tendencies related to the assertion of interests, the lecturer presented the characteristics of the individual age groups. In general, it can be stated that although everybody has had an experience of not being satisfied with their service provider, only one in every three persons makes a complaint. New tendencies can also be observed in this field, and based on research results, the generation of NOW is typically critical and confident when using services, they require efficient and good quality service provision and practical solutions. They choose new communication channels, for example they prefer to use different social media sites. Regarding the service providers, the lecturer presented that when dealing with cases their main aim is to increase consumer satisfaction and attract new customers. In the interest of this, service providers striveto have a deeper and fuller understanding of needs, and to provide customised, enjoyable administrative customer experience.
The lecturer also described the institution of the commissioner acting in the field of media and communication and emphasised that it was aimed at protecting consumer interests and facilitating consumer welfare. The commissioner functions as an advocacy intermediary forum, its proceedings are not regarded as official proceedings, it cannot examine individual cases or activities of service providers, and it proceeds in the case that interests are harmed to an extent, which is significant from the aspect of society. Regarding conciliation proceedings the lecturer presented that the subject-matter of such proceedings includes media content, and harm to interests caused by communication service practices, or a potential threat to such interests, which affects a significant number of consumers, as well as fair and reasonable consumer interests. In the context of procedural rules, the lecturer pointed out that the commissioner does not represent a classical dispute resolution forum, it may not make decisions or arrange settlement between different parties; the commissioner can reach settlement with the service provider itself, with regard to all parties concerned. In the course of proceedings initiated by complaints relating to electronic communication services, the commissioner consults the service provider either orally or in writing, and the complainant is involved upon the complainant’s request, if the commissioner finds it appropriate. If an agreement is reached between the commissioner and the service provider concerned, it is also recorded in writing. In connection with proceedings instituted by complaints relating to media content services the lecturer pointed out that in such cases the media content providers’ professional representative organisation or self-regulatory organisation must proceed, which is competent in respect of the given service provider. In the end the lecturer explained that on the basis of statistical data relating to the years 2016–2018 it could be stated that the number of complaints falling within the lecturer’s competence was decreasing year after year.
In the last lecture of the conference the special rules and practice of domain legal disputes were presented. Three well-known experts, Dr. Erika Mayer (Infomediator – Domain Name Mediator Alternative Dispute Resolution Forum), Dr. Ivett Paulovics (Dispute Case Manager - MFSD IP DISPUTE RESOLUTION CENTRE) and Dr. Katalin Szamosi (SBGK Attorneys at Law), talked about this subject under the title ‘An overview of the similarities and differences between domain dispute resolution solutions’. During the panel discussion they emphasised that domain dispute resolution was the earliest one of online dispute resolution solutions, which is natural and understandable. In order for service providers to be able to appear in the online world, domain name registration is needed, and if they have disputes, they want to and have to resolve them in a fast and simple way. There is no time for long procedures, because they need to know whether they can continue to operate under the given name or not.
Dr. Erika Mayer is head of the Hungarian Domain Name Mediator Alternative Dispute Resolution Forum, and she deals with legal disputes related to ‘.hu’ and ‘.eu’ domain names. In this respect, besides trademark infringements, proceedings can also be instituted for example in the case of the infringement of copyright. A council of one or – in more complex cases – three adjudicators acts in the procedure. Three types of decisions can be made: revocation of the domain name, transfer of the domain name, or rejection of the application. Court proceedings between the parties can be instituted within 30 days after the decision is made.
Dr. Katalin Szamosi presented the rules of procedure in two major dispute resolution forums, where she was personally concerned as an adjudicator. On the one part, she talked about WIPO (World Intellectual Property Organisation) seated in Geneva and operating since 1999, while on the other part she described the National Arbitration Forum seated in Minnesota and operating since 1986. The organisations proceed in the case of disputes arising from top level domain names (‘.com’, ‘.org’), where 70 percent of the cases are constituted by disputes relating to ‘.com’ domains. Both forums deal with online dispute resolution, and adjudicators proceed in the case of both forums. She presented that the proceedings were instituted upon request, and the rules of procedure were determined in the so-called UDRP, which was binding upon the parties. She emphasised that the UDRP constituted uniform and supranational law, which was independent from location, national law and trademark, consequently disputes were decided under a uniform legal system. The decisions are made by panels consisting of one or three members, in respect of whom no grounds for exclusion may exist. There can be two types of applications, depending on whether they are aimed at trademark cancellation or domain transfer. The jurisdiction cannot extend beyond these limits, and payment of the procedural costs cannot be required. The panels are entitled to ask back, give answers and obtain further evidence. The procedural deadline is 14 days, the procedure takes place in writing even between the adjudicators, but they can discuss their positions during conference calls.
Dr. Ivett Paulovics presented the procedure of URS (Uniform Rapid Suspension) based in Milan, dealing with domain disputes for 20 years. The aim of the procedure is to provide an efficient, fast and cheap opportunity for trademark holders to have the use of a domain name or a website suspended in the case of trademark infringement. This organisation also proceeds in the case of top level domain names (‘.web’, ‘.budapest’, etc.). The procedure is instituted upon request, which must be submitted in English, but the language of the procedure depends on the language used in the country where the party registering the domain name is seated. A formal examination takes place 2 days after the request is submitted, and then the domain name is suspended within 24 hours following notification of the registering party. No amendments can be made after submitting the request, the domain user has 14 days for defence as to the merits, in the lack of which the adjudicator is appointed and makes a decision within 3 days, she presented.
After presenting the different domain dispute resolution options, the participants of the panel discussion shared their opinion on the extent to which the GDPR affected the different dispute resolution procedures. Dr. Katalin Szamosi explained that after requests were submitted, taking legal interests into consideration, the National Arbitration Forum itself contacted registrars to request data, and WIPO did the same. Professional organisations are holding discussions on the amendment of the GDPR, which is aimed at making data accessible to those who intend to assert a claim. Dr. Ivett Paulovics said that since the GDPR entered into force, no changes have taken place in the course of proceedings of the URS, the proceedings have not become longer, and data entries happen fast. They continue to publish their data, as ICANN gave no instructions on what they should do with the data, but according to the rules they are obliged to publish them. Dr. Erika Mayer thought that the data of domain users can be requested from the registrar or from the registering organisation by demonstrating a legitimate interest in that regard. Among the problems she mentioned that if after instituting the proceedings it turns out that the domain user is a person who has some right to the domain name, then the applicant loses the procedural fee too. Decisions published earlier have been removed from their website and anonymised, which takes time, so currently not all decisions can be accessed.
The last topic the participants talked about was why they would recommend the use of certain alternative dispute resolution forums instead of regular court proceedings. Katalin Szamosi explained that although trademark infringing domains can be subject to infringement proceedings, such proceedings take a long time, they are costly and require an enormous amount of preparation work. If the primary aim is to have the domain cancelled or transferred, then it is recommended to use an alternative forum. She noted that with its 12 percent participation rate the financial sector (Allianz, Credit Agriculture, Rotschild Bank, etc.) is very active in online dispute resolution and comes first among all sectors. It is followed by the fashion industry.
Ivett Paulovics pointed out that online procedures are cheap, efficient and fast, as they are closed within 23 days and the domain name is suspended if the request is granted. In respect of the statistics mentioned by dr. Katalin Szamosi she presented that in their records fashion and cosmetics companies were at the top of the list. Erika Mayer said that the new Act on Civil Procedure had made litigation difficult and costly, while their procedure remained just as fast and costs the same as before. There have been cases when a decision was made within 3 days. No court can compete with that. Although unsuccessful parties cannot be obliged to pay procedural costs, compared to the costs of certain court proceedings it is still worth choosing their procedure. Furthermore, legal representation is not obligatory during the procedure. She also mentioned that the number of domain disputes judged by courts is not very high, there are very few cases when the parties challenge the adjudicator’s decision in court. On the contrary, the Curia’s decisions refer back to their decisions. This type of dispute resolution procedure will play a significant role in the future. All platforms of domain disputes have proved that they deserve a place among online dispute resolution forums, she summarised their discussion.