www.tourismlaw.pt Legal Tech and ODR in Tourism Andrej Mićović University of Kragujevac International Journal of Tourism, Travel and Hospitality Law PRE-PRINT
LEGAL TECH AND ONLINE DISPUTE RESOLUTION IN TOURISM Andrej Mićović* Introduction For the past several decades the world has seen an explosion in the growth of tourism.1 Inevitably, the rate at which tourists will be dissatisfied with the goods and services they receive will also increase. International tourists and visitors may continue to face significant obstacles with respect to access to justice when a dispute arises between the tourist / visitor and the provider of a good or service.2 Some of the barriers faced by tourists and visitors in accessing justice may include: (1) limited ability to access legal aid, (2) costs associated with initiating court proceedings or securing a judgment, (3) a lack of information on the rights of tourists and the remedies available to them, (4) the requirement of physical presence to initiate, participate in, or conclude judicial or ADR procedures, (5) the absence of small claims courts or procedures that are suitable to international tourist disputes, (6) specificity of administrative or governmental bodies which facilitate the resolution of international tourist disputes, and (7) the limited cooperation mechanisms between national consumer protection bodies. In order to overcome the identified barriers, over the last decade significant work has been within the Hague Conference on Private International Law to facilitate access to justice for international tourists. However, the Experts’ Group on the Tourists and Visitors (ODR) Project at its third meeting (held virtually from 5 to 9 October 2020) did not reach a conclusive consensus on “the necessity, desirability, and feasibility of developing a hard law / soft law instrument on matters * Associate Professor, University of Kragujevac, Faculty of Hotel Management and Tourism in Vrnjačka Banja; IFTTA Membership Secretary, Member of the IFTTA-HCCH Committee. 1 UNWTO Tourism Highlights, 2020 Edition, English version published in January 2021, available at < https://www.eunwto.org/doi/epdf/10.18111/9789284422456 2 Annex I, p. 4 of CGAP Prel. Doc. No. 1 REV of December 2021.
relating to online dispute resolution” of claims by international tourists and visitors.3 It did, however, conclude that the development of a “Guide” may provide useful assistance to tourists and visitors in pursuing such claims.4 At its meeting in 2021, and in response to a recommendation from the Experts’ Group on Tourists and Visitors (Online Dispute Resolution), Council on General Affairs and Policy (CGAP) mandated the Permanent Bureau (PB) to develop a Practical Guide to Access to Justice for International Tourists and Visitors (“Guide”). At its 2022 meeting CGAP approved the Guide, subject to editorial amendments, for publication on the HCCH website. As part of the Tourism Project, Sievi’s report identified online dispute resolution (ODR) and Legal Tech5 as the two principles with the biggest potential impact for the protection of international tourists. The use of technology in the legal service industry (so-called Legal Tech), can serve not only to ease access to justice, but also to ensure accessibility of ODR mechanisms. Unification of legal rules on ODR can be seen as a hardware and Legal Tech tools as a software in achieving the higher level of the protection of international tourists as consumers. The subject of the paper is related to the benefits and challenges of Legal Tech in relation to ODR, as well as to the accessibility requirements, as a conditio sine qua non for ensuring access to justice for international tourists. Benefits and Challenges of Legal Tech in Relation to ODR In order to ensure efficient ex ante and ex post consumer protection, a variety of ODR systems employ artificial intelligence (AI) for dispute resolution processes, often included under the general policy trend of “Legal Tech”. If incorporated into the ODR platform, Legal Tech tools may have positive effect in the: 3 Experts from Argentina, Brazil, Canada, Chile, the People’s Republic of China, Costa Rica, Ecuador, the European Union, France, Greece, Mexico, Serbia, South Africa, Switzerland, the United Kingdom, the United States of America and Venezuela participated, with the International Association of Consumer Law, the International Forum of Travel and Tourism Advocates, the Leisure Industries Section of the International Bar Association and the United Nations Commission on International Trade Law (UNCITRAL) participating as observers. 4 See: Aide Memoire of the third meeting of the Experts’ Group on the Tourists and Visitors (ODR) Project, prepared by the Chair of the Experts’ Group The Hague / Online 5 to 9 October 2020. 5 The term Legal Tech can be defined as use of technology and software with a goal to provide legal services more efficiently. See: Sievi, N., Legal Tech and Resolution of Tourists’ Claims, Third Meeting of the Experts’ Group on the Tourists and Visitors (ODR) Project, 5-9 October 2020.
• conflict prevention - a tool that automatically breaks down and classifies the types of complaints received in the ODR platform can be a valuable asset for regulators and traders allowing them to improve trading standards and avoid future disputes; • online negotiation - two basic models of online negotiation can be distinguished: assisted negotiation (categorizing disputes and matching them with solutions adopted by parties in similar past disputes) and automated negotiation or blind-bidding (used in situations in which both parties agree on the facts and liabilities, but disagree on the calculation of the loss or the type of remedy). Automated negotiation uses software that allows users to analyse their bargaining positions through evaluation and prioritization of offers and counter offers. Such offers are kept hidden during the negotiation, and are only disclosed when these offers match or enter into a pre-established range - hence the name 'blind-bidding'. • case management for the approved ADR/ODR entities – the case management function should offer a one-stop shop for consumers and traders, so that they will not need to use a different web interface for each ADR/ODR process. • monitoring and enforcement activities - the information contained in the ODR platform, if appropriately shared, could improve the enforcement role of regulators, assisting them to identify patterns of market failure and traders' bad practice as well as to ensure a quick response to fraudulent cross-border activity.6 The Committee on Legal Affairs and Human Rights of the Council of Europe recognizes that innovative use of modern information and communications technology (ICT) within courts on the one hand, and ODR procedures on the other, can play a role in overcoming existing barriers to individuals’ access to justice.7 Member States are thus encouraged to promote and further develop ODR mechanisms as part of their obligations stipulated in various sectoral directives. Thus, Art. 14 of Timeshare Directive 2008/122/EU stipulates that Member States should take the necessary measures in order to establish and develop an out-of-court complaints and redress procedures for the settlement of consumer disputes. Also, in order to effectively protect tourism service users, both Package Travel Directive 2015/2302/EU and Timeshare Directive 2008/122/EU oblige 6 Cortes, P. (2015). A new regulatory framework for extra-judicial consumer redress: Where we are and how to move forward. Legal Studies, 35(1), pp. 127-131. 7 See: Committee on Legal Affairs and Human Rights, Access to justice and the Internet: potential and challenges, https://assembly.coe.int/nw/xml/XRef/Xref-XML2HTML-EN.asp?fileid=22245&lang=en
traders and their branch organizations to inform consumers of the availability of such procedures, i.e., availability of ADR mechanisms pursuant to Directive 2013/11/EU and ODR platforms pursuant to Regulation (EU) No 524/2013.8 Apart from the benefits of ICT tools and Legal Tech in relation to ODR (facilitating individuals’ access to justice, enabling rapid and efficient settlement of consumer disputes, at a lower cost and in a less conflictual manner than conventional litigation, affording more flexibility in the choice of procedures used and solutions offered), the committee notes that ODR procedures may come with certain challenges, including technical issues, inequalities in individuals’ access to online resources, privacy issues and problems regarding enforcement of decisions. Similarly, institutional reports and legal doctrine identify the lack of awareness of ADR and ODR mechanisms and the lack of incentives for their use as the most important hindrances to their growth.9 At the EU level, the ADR Directive attempts to mitigate this by requiring traders to inform consumers about ADR entities which are competent to resolve consumers' complaints, and the ODR Regulation requires online traders to provide a link to the ODR platform. At the global level, development of Practical Handbook/Guide under the auspices of HCCH will certainly have positive effect in mitigating lack of awareness of international tourists on the existing ODR mechanisms in different legal jurisdictions. However, a key element that is missing from the European redress system but that is crucial to its success is the development of incentives in order to ensure parties' participation in an ADR/ODR process, the early settlement of complaints and compliance with final outcomes. The list of possible incentives that might be taken into an account has been already provided and analyzed in the legal doctrine and is given below in a summarized manner:10 8 Within the EU, tourism-related disputes can be resolved by the dispute resolution bodies of general competence (Belgium, Cyprus, Denmark, Finland, Germany, Greece, Hungary, Italy, Latvia, Lithuania, Malta, Poland, Portugal, Slovenia, Spain and Romania) or special competence bodies dealing with package travel, stand-alone services (Belgium, Denmark, France and Luxembourg), travel contracts (Austria, Germany), air passenger rights (Norway, Bulgaria, Germany, Italy), and time-sharing (Spain, Portugal). See: Alternative Dispute Resolution in the Air Passenger Rights Sector, http://cecluxembourg.lu/wp-content/uploads/2015/04/ADR-APR-2015-FINAL.pdf 9 European Commission, Communication on Alternative Dispute Resolution for Consumer Disputes in the Single Market COM(2011) 791, p. 2, 6; Cortes, P., pp. 131. 10 Cortes, P., pp. 132-140.
A. INCENTIVES TO PARTICIPATE IN AN ODR PROCESS. – Parties’ participation in the ADR/ODR process greatly depends on the associated costs and the level of trust parties have in the overall ODR process. • COST-EFFECTIVE AND ECONOMICALLY JUSTIFIABLE ODR PROCESS – Parties shall be incentivized to participate at the ODR mechanisms by ensuring free or low-cost process to consumers and by indicating economic benefits for traders (e.g. trader’s participation in ODR process limits the number of chargebacks issued against him which can ultimately affect the interest rates that the trader pays per transaction; efficient resolution of consumer disputes enhances the consumers’ confidence in the fairness of the marketplace and consequently increases the commercial activity of traders, etc.); • CREATION OF GLOBALLY RECOGNIZABLE AND REPUTABLE TRUSTMARK – The role of the trustmark is to assist consumers in recognising reliable traders and ADR entities by setting conditions for displaying (e.g. high rate of resolved disputes) and withdrawal of a trustmark (non-compliance with the adopted standards by ADR/ODR entities; traders’ refusal to participate in the ADR proceedings or to comply with final outcomes) and designating public institution that will be monitoring compliance with the adopted standards. B. INCENTIVES TO SETTLE COMPLAINTS: • AN EFFECTIVE AUTOMATED NEGOTIATION TOOL – Creation of this tool enables most disputes to be resolved in its base, before progressing into the next stage(s), i.e., without the intervention of neutral third parties towards facilitation of settlements and imposition of decisions (e.g. UNCITRAL adopted pyramid shaped ODR scheme). • REDUCTION OF CASE FEES AS A MEANS OF REWARDING PARTIES WHO SETTLE COMPLAINTS EARLY – The purpose of this incentive is to encourage parties to settle meritorious complaints before they progress to procedures in which a third party is appointed and case fees are requested. • COST PENALTIES - Cost sanctions may be used for encouraging parties to settle their disputes when appropriate, instead of employing more costly adjudicative models (e.g. in case of consumer complaints against members of the Association for British Travel Agents (ABTA), the CEDR Solve Consumer Arbitration Scheme provides that when the consumer-complainant is awarded less than was previously offered by the trader, the consumer would be ordered to pay an amount that is equal to the registration fee). • MULTI-TIERED DISPUTE RESOLUTION PROCESSES - A multi-tiered ODR process can be used as a model for the future ODR mechanism under the auspices of HCCH, as it is implemented in the majority of consumer disputes. In fact, not only is this already the model employed by many ombudsmen in Europe but it is also the approach being proposed by UNICTRAL for the resolution of e-commerce disputes. • THE PUBLICATION OF ADJUDICATED DECISIONS – The publication of decisions would have at least three important roles: first, to bring transparency to a process in which the parties do not contest on an equal footing, and in which traders are repeat players while consumers are inexperienced users; secondly, to
help to establish a body of model cases, facilitating legal certainty and the predictability of outcomes; and, thirdly, to act as an incentive for respondents to settle reasonable complaints. C. INCENTIVES FOR OUT-OF-COURT COMPLIANCE OF OUTCOMES: • FEEDBACKS IN REVIEW WEBSITES - Feedbacks in review websites have become a very useful mechanism for incentivising parties to participate in the dispute resolution process and reach the settlement which would be the basis for removal of the negative consumer posts and reviews or announcement of the out-of-court settlement against the consumer's review. In order to avoid the consumer blackmailing traders, it will be necessary to include some tools, such as cease-and-desist letters to ensure the filtering of vexatious reviews, as well as blockchain technology to make review site more trustworthy. Moreover, a trader should be able to invite the consumer to initiate a claim in the ODR platform. If the consumer refuses to do so within an adequate period of time, then the negative posting should be automatically deleted or followed by a post that records the consumer's refusal to participate in the dispute resolution process. • COOPERATIONWITH SEARCH ENGINES - The ODR platform and review sites could also cooperate with the search engines to rank down traders who have a high number of unresolved complaints or that have not complied with final outcomes. Although search engines are committed to neutrality, and so they would be reluctant to change their own settings, search engines could incorporate filters with this option, allowing users to decide whether to refine their browses. • 'NAME AND SHAME' TECHNIQUES AND BLACKLISTS - A number of ADR and ODR schemes already use 'naming and shaming' as an incentive for compliance and to warn consumers (e.g. the Internet Ombudsman in Austria publishes a Watchlist of traders that have generated multiple consumer complaints; the Swedish National Board for Consumer Disputes also makes available to the public its decisions for 'naming and shaming' traders for non-compliance; the Better Business Bureau (BBB), which rates traders in Canada and the USA taking into an account compliance of the trader with the outcomes). • ONLINE INTERMEDIARIES - Intermediaries may be effective in encouraging compliance (escrow companies can hold the money related to the transaction; payment providers, such as credit card companies (i.e. Visa, MasterCard and American Express) and other online payment intermediaries (i.e. PayPal) can reverse payments in compliance with outcomes, moving sums in dispute from the seller's account to the buyer's; online regulators such as ICANN could potentially play a key role in blocking traders that engage in criminal activities through the cancellation of domain names when required by public enforcement bodies. These intermediaries can therefore play useful roles in ensuring quick enforcement without the need for judicial intervention. Legal Tech and Accessibility ODR platform needs to be user-friendly and accessible to all, including vulnerable consumers. Two broad categories of consumer vulnerability can be distinguished: ‘market-specific
vulnerability’, which derives from the specific context of particular markets, and can affect a broad range of consumers within those markets; ‘vulnerability associated with personal characteristics’ such as physical disability, poor mental health or low incomes, which may result in individuals with those characteristics facing particularly severe, persistent problems across markets.11 When it comes to the latter one, three major documents have guided the understanding and promotion of accessibility12 within the United Nations policy framework to date: The World Programme of Action concerning Disabled Persons, The United Nations Standard Rules on the Equalization of Opportunities for Persons with Disabilities and The UN Convention on the Rights of Persons with Disabilities (UN CRPD).13 Together, these three documents require that Governments and the international community recognize the importance of accessibility in ensuring the equalization of opportunities for persons with disabilities by empowering them to “live independently and participate fully in all aspects of life”. The documents give particular attention to accessibility in the physical environment, as well as access to information and communication, and affirm the importance of access to public services such as transportation, education and health care, among others.14 Following the adoption of the UN CRPD which the EU signed in 2007 and ratified in 2010, the EU has adopted the European Disability Strategy 2010-2020 and various disability-related rules in the field of transport, public procurement, electronic communications, networks and services 11 See: Consumer vulnerability: challenges and potential solutions, https://assets.publishing.service.gov.uk/ government/uploads/system/uploads/attachment_data/file/782542/CMA-Vulnerable_People_Accessible.pdf 12 In broader terms, accessibility can be defined as the provision of flexibility to accommodate each user’s needs and preferences. When used with the specific reference to persons with disabilities, acessibility refers to any place, space, item or service, whether physical or virtual, that is easily approached, reached, entered, exited, interacted with, understood or otherwise used by persons of varying disabilities, is determined to be accessible. Accessibility within the context of the United Nations is not only an inherent right of persons with disabilities, but a means of ensuring that persons with disabilities are able to exercise all rights and fundamental freedoms and are empowered to participate fully in society on equal terms with all others. See: United Nations, Accessibility and Development – Mainstreaming disability in the post-2015 development agenda, 2013, https://www.un.org/disabilities/documents/accessibility_ and_development.pdf, p. 3. 13 UN CRPD includes obligations for digital accessibility, i.e., requires signatories to promote access for persons with disabilities to new information and communications technologies and systems, including the Internet (Art. 9), includes the obligation of accepting and facilitating the use of sign languages, Braille, augmentative and alternative communication, and all other accessible means, modes and formats of communication of their choice by persons with disabilities in official interactions (Art. 21); ensures effective access to justice for persons with disabilities (Art. 13). 14 United Nations, Accessibility and Development…, https://www.un.org/disabilities/documents/accessibility_and_ development.pdf, p. 4.
etc.15 To this date, the most important pieces of legislation in this field are Web Accessibility Directive 2016/2102/EU (containing provisions on the publication of information in accessible formats) and European Accessibility Act 2019/882/EU. Taking into an account a correlation between aging and disabilities, digital accessibility requirements are particularly important for vulnerable categories of international tourists, since travel activity is a primary activity for older retirees. It is therefore essential for them to be able to obtain reliable information from the Internet, which serves as the main source for consuming tourist information.16 Making ICT more accessible and better usable can be done through a combination of three approaches: 1. design for all or universal design which is defined in the UN Convention on the Rights of People with Disabilities as the design of products, environments, programs and services to be usable by all people, to the greatest extent possible, without the need for adaptation or specialized design; 2. assistive technology which is defined by the European standardization organization CEN as a piece of equipment, product system, hardware, software or service that is used to increase, maintain or improve functional capabilities of individuals with disabilities; 3. accessible intelligent environment, which is an environment that is adaptive and adapting to the user (which is typically realized by intelligence in the living space of the user).17 While accessibility is a civil and human right of persons with disabilities, accessible ODR platforms and accessible Practical Handbook/Guide containing information about existing ODR platforms, do not provide benefits only to people with disabilities. Accessibility may be essential for some individuals, but many accessibility design features will be helpful and useful for everyone.18 15 Broderick, A., Ferri, D., International and European Disability Law and Policy, Cambridge University Press, Cambridge, United Kingdom 2019, p. 3-4. 16 See: Trinidad Dominguez Vila et al., (2018). Website accessibility in the tourism industry: an analysis of official national tourism organization websites around the world, DISABILITY & REHABILITATION, Vol. 40, Issue 24, p. 2895, 2903. 17 Timmers, P. (2009). Update on e-inclusion and e-accessibility policy at european level. Journal of Legal Technology Risk Management, 4(1), pp. 26-27. 18 Larson, D. (2019). Digital accessibility and disability accommodations in online dispute resolution: Odr for everyone. Ohio State Journal on Dispute Resolution, 34(3), p. 437.
Concluding Remarks Development of the Practical Guide can be seen as an important milestone in pursuing the ultimate goal – adoption of soft law / hard law ODR instrument. Meanwhile, Practical Guide might be the good way to mitigate the lack of awareness of the existing ADR/ODR mechanisms and to ensure access to justice to international tourists by providing them information about relevant out-of-court dispute resolution mechanisms at one place. The purpose of the Guide is to assist international tourists and visitors to foreign countries seeking access to justice for disputes arising from their tourism experience by providing information on online dispute resolution mechanisms that may be available and HCCH legal instruments that may be relevant in a given case In my personal opinion, without differentiating reliable ADR/ODR platforms (that are complying with mandatory/non-mandatory standards) from non-reliable (e.g. listed on national blacklists) and ensuring regular update, informative list will have not only limited effect but could also be misleading. In the context of the development of the Practical Guide, it might be good idea to: differentiate reliable ADR/ODR platforms (that are complying with mandatory/non-mandatory standards) from non-reliable (e.g. listed on national blacklists) and ensure regular update; include the information on the overall percentage rate of the traders’ participation in the ODR process and percentage rate of their compliance with the final outcomes as particular feature of the existing ODR systems worldwide. Due to its scope and nature, Practical Guide cannot tackle the problems regarding enforcement of decisions, but it could however provide international tourists with the comparative information about the incentives that are applied in different legal jurisdictions. Finally, it is essential that webpage containing Practical Guide and Guide itself complies with the accessibility requirements, so that vulnerable consumers can have access to the information on the particular (accessibility) features of the existing ODR platforms.tourismlaw.pt