In August 2000, Ford Motor Company approached the Chartered Institute of Arbitrators (CIArb) to discuss the possibility of the CIArb developing and maintaining an arbitration scheme to resolve disputes between Ford and customers buying cars from its new website www.fordjourney.com.
CIArb drew up a tailor-made arbitration scheme, which resulted in the launch of Europe’s first independent online consumer arbitration scheme in October 2000 at the National Motor Show in Birmingham.
By November 2000, news of the scheme had travelled to Europe, and the CIArb was invited by the European Union’s (EU’s) Forum on the Internal Market to attend an exhibition at the European Parliament in Brussels, where it presented the scheme to a distinguished audience.
The scheme was designed to be cost-effective, quick, easy to use, flexible and most importantly, independent. The audience of MEPs and other EU officials from many of the individual European states were impressed by the scheme, which can be used by consumers across all EU states, subject to their agreement to arbitrate under English law.
Also present were Ford’s own global vice president for governmental affairs, Martin Zimmerman from Detroit and Wolfgang Schneider, vice president of legal, governmental and environmental affairs at Ford of Europe.
By August 2000 the CIArb and Ford had identified that although online shopping sites were on the increase, a structured scheme did not exist that could address any grievances generated by the site quickly over the internet.
With the launch of fordjourney.com, Ford needed a dispute resolution scheme that allowed its online customers to go to independent arbitration if Ford’s customer service team was unable to resolve the dispute first.
The scheme was developed by the CIArb to provide an informal and simple mechanism for the resolution of disputes between Ford and its customers, giving access to justice to those often least able to finance more costly litigation.
The online scheme provides real choice to consumers on how they want their dispute resolved.
Research indicates that consumers who purchase from their home computer are also likely to want to use an online service to settle their disputes. The scheme allows consumers to do this, but it also allows those who no longer have internet access, or those who do not wish to have their dispute resolved online, to use the same set of rules in order to have their dispute with Ford resolved. On those occasions, the parties would follow the more traditional offline procedures that CIArb provides to a variety of trade associations, federations and other bodies responsible for business-to-consumer transactions.
In addition, the scheme can also help resolve cross-border disputes, if the consumer agrees to arbitrate under English Law.
One advantage of the Ford scheme is that if the customer is not successful or satisfied with the outcome of the arbitration, they can still follow the traditional litigation route, as only Ford is bound by the decision of the arbitrator. Therefore the customer has the added value of being able to reject the award and pursue the matter through their national courts, wherever they live within the EU.
Furthermore, the cost of online arbitration is low. Consumers pay a small registration fee when they make their application, and Ford returns this fee to them if the arbitrator finds in in their favour.
The main advantages of consumer arbitration schemes to customers are:
-they ensure customers can buy a product online with a feeling of security and confidence;
