This issue brief considers what court-sponsored online dispute resolution (ODR) means for consumers who are sued in debt collection lawsuits by creditors collecting consumer debts and ways that courts may guard against potential problems. Court-sponsored ODR offers a way to resolve court cases online without ever setting foot in court.
While ODR has been used to resolve disputes on e-commerce websites, such as eBay, since 1999, the earliest court-sponsored ODR efforts date back to 2010-2012. In the United States, courts in multiple states are currently using ODR and courts in other states are considering adopting it. Some of the courts that have adopted ODR are using it to resolve lawsuits to collect consumer debts.
Court-sponsored ODR may appeal to state court administrators because of the sheer volume of collection lawsuits they must currently manage and ODR designers may view collection lawsuits as “simple” or “low stakes” cases without appreciating the long-term consequences that judgments impose on low-income consumers. However, adopting court-sponsored ODR for collection lawsuits raises a number of important consumer protection issues. If implemented, court-sponsored ODR needs to truly protect consumers from new and existing harms.
The following tables are intended to help courts and consumer advocates identify key problems that need to be addressed and solutions that courts should implement if they adopt court-sponsored ODR for collection lawsuits.
The five tables discuss:
- general considerations for ODR system design,
- using ODR to resolve disputes after a collection lawsuit is filed,
- using ODR to resolve disputes without filing a collection lawsuit,
- using ODR in collection lawsuits post-judgment, and
- evaluation of ODR platforms for collection lawsuits.