Legislating for an Effective and Legitimate System of Online Consumer Arbitration

This chapter addresses the conflict between the restrictive and negative view often taken towards consumer arbitration and the supportive and positive view often taken towards ODR by arguing that a properly designed system of online consumer arbitration can fulfil the promise of consumer arbitration while avoiding its greatest risks. After clarifying what is meant by the term “online arbitration” and addressing the important differences that exist between commercial arbitration and consumer arbitration, this chapter examines the current regulatory framework applicable to consumer arbitration, contrasting the two dominant regulatory approaches found in the EU and the US. Moreover, this chapter discusses the distinctive and problematic features of consumer arbitration, and addresses the additional problems that can develop when consumer arbitration is undertaken in the ODR context. Lastly, this chapter considers current alternatives to online consumer arbitration and concludes by proposing four guarantees that legislators should include in order to ensure a fair and effective system of online consumer arbitration