What happens when you have a problem with an online transaction?
E-commerce has been on the rise for a number of years. The Covid-19 pandemic accelerated the rate of take-up among consumers, as lockdowns made it difficult or impossible to visit physical shops. But e-commerce has been around since 1994 (the first recorded transaction was the sale of a CD between friends through an online retail website called NetMarket). Now, many people have bought or sold something online. In 2023, global retail e-commerce sales reached an estimated USD 5.8 trillion. Analysts predict this figure will grow by 39% over the coming years, surpassing eight trillion dollars by 2027. At its most basic, e-commerce involves placing an order online with a retailer for home delivery. An example is grocery delivery from one of the big supermarkets. True e-commerce is more like Takealot, Etsy or eBay. These online shopping platforms do not have a bricks-and-mortar shop you can visit; they are often digital marketplaces selling goods from multiple suppliers (whereas when you order groceries from Checkers you are only dealing with Checkers). These platforms are business-to-consumer. Facebook Marketplace, Gumtree and Yaga are just a few examples of consumer-to-consumer e-commerce. If you are unhappy with an item in your online grocery delivery, you can either stop by the local store or contact customer service via the shopping app. But what happens if you have a dispute with an online seller that does not have a physical presence?
Contact the seller
If you are not satisfied with an item you have purchased from an online seller, your first recourse is to contact the platform. Major retailers like Amazon and Takealot have robust customer service processes in place and it is usually a simple matter to return an item for a replacement or a refund, even if the goods have been sold by third-party sellers. In most cases this is the end of the matter. However, if you purchased an item from a fellow consumer, say on Facebook Marketplace, they almost certainly lack the infrastructure of Amazon or Takealot, and you may find yourself in dispute. If this happens, there are legal avenues you can pursue.
Online dispute resolution
Disputes arising out of “smart” or electronic contracts, which is what your online order is, can be resolved through online dispute resolution mechanisms (ODR). ODR is the use of sophisticated technology to enhance, support and replicate existing alternative dispute resolution processes (ADR). Court-related ODR encompasses a variety of methods and tools. It can provide dispute resolution services without the need to file a formal complaint and can support a variety of decision-making aids, including discovery exchange, direct party-to-party settlement negotiations, synchronous or asynchronous mediation support, and technology-supported adjudication.
When litigants successfully resolve their dispute, the program can populate standard settlement agreement forms that can be automatically filed with the court. If the litigants are unsuccessful, the program can also provide a seamless entry to the court’s traditional dispute resolution by automatically populating and filing necessary court forms. The design and implementation of court-related ODR programs does not diminish due process or access to justice for users.
How does online dispute resolution work?
At a practical level, ODR employs arbitration, mediation and negotiation techniques on an online platform. Technology and artificial intelligence (AI) have joined forces with more well-known forms of ADR – mediation and arbitration. ODR automates ADR processes to allow a computer program to perform the human role of third parties in the mediation or arbitration process.
As with ADR, ODR must involve confidentiality, transparency, legality, private autonomy and efficiency. The two techniques work together in automated and assisted negotiations, which may be used in settlement proceedings in which technology replaces the negotiator to help the parties resolve their dispute.
Decision-making software
In these assisted negotiations, the parties use software designed to make the relevant decisions. Each party determines the settlement range and makes an offer. If the offer falls within the agreed range the software calculates a mean value using the two offers to arrive at a settlement amount. If the offer is not in range, the parties start over.
When do humans need to get involved?
The use of technology to resolve disputes does not mean there is no human intervention. AI may find legal issues too complex or there may be legal principles that need further analysis, requiring human intervention. This may occur when there is no precedent or past data to determine how a particular issue should be resolved. AI is only as accurate as its training data. If no such data exists, human intervention is necessary to create a precedent. However, in many instances this technology can help a lawyer resolve client disputes more quickly, efficiently and cost-effectively than with traditional, purely “analogue” methods.
SD Law can help
At SD Law, we welcome tools like ODR that enhance our service to you, our clients. We embrace technology as part of our drive to be a modern, client-centric law firm, and we do so responsibly and ethically. Personal contact with our clients remains a core value of our practice. If you have a dispute or other legal matter you’d like to discuss, contact Simon on 086 099 5146 or email sdippenaar@sdlaw.co.za for a confidential, personal discussion.
Further reading:
- How AI is changing contract review and due diligence
- AI and the legal profession
- AI in litigation
- AI in law enforcement
SD Law
The information on this website is provided to assist the reader with a general understanding of the law. While we believe the information to be factually accurate, and have taken care in our preparation of these pages, these articles cannot and do not take individual circumstances into account and are not a substitute for personal legal advice. If you have a legal matter that concerns you, please consult a qualified attorney. Simon Dippenaar & Associates takes no responsibility for any action you may take as a result of reading the information contained herein (or the consequences thereof), in the absence of professional legal advice.