This chapter outlines the main takeaways of the OECD assessment of online dispute resolution (ODR) in Latvia and summarises key policy recommendations to support its development. OECD recommendations have been designed to support Latvia in attaining its strategic objectives of modernising its justice system and successfully implementing ODR.
Developing Effective Online Dispute Resolution in Latvia
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1. Developing online dispute resolution in Latvia: Assessment and recommendations
Abstract
1.1. Introduction
This report describes Latvia’s digital transformation efforts in the justice sector, assesses opportunities and challenges, and provides recommendations for the successful implementation of online dispute resolution (ODR), drawing on the OECD Online Dispute Resolution Framework (“OECD ODR Framework") (OECD, forthcoming[1]). The report identifies potential areas to use ODR in Latvia and applies the forthcoming OECD ODR Framework to three specific types of claims – simplified and warning procedures and consumer claims. Based on the OECD Recommendation on Access to Justice and People-Centred Justice Systems (OECD, 2023[2]) and the experience of other OECD countries, this chapter summarises key policy recommendations to support Latvia’s ongoing efforts to modernise its justice sector and help with the coherent implementation of ODR.
1.2. Continue advancing towards a people-centred justice approach
In line with the Sustainable Development Goal (SDG) 16 and Indicator 16.3 on leaving no one behind, Latvia has been committed to adopting a people-centred approach in its justice system to deliver effective, efficient and accessible justice services. In recent years, the country has been taking steps to reform its justice sector from a people-centred perspective, enhance skills and legal awareness among justice civil servants and the broader population, and expand the use of alternative dispute resolution (ADR) mechanisms.
Still, there is space for improving co-ordination and triage mechanisms to help channel individuals with legal needs to the appropriate services. More broadly and with a view to strengthening the overall people-centricity of justice services, there is scope to enhance legal literacy and awareness, particularly among vulnerable groups; undertake regular legal needs surveys to strengthen the understanding of the legal needs of people and businesses; and assess the effectiveness of existing policies and initiatives. Furthermore, to maximise the use of ADR, there is a need to expand legal aid, increase the enforceability and certainty of decisions and advance efforts to increase the attractiveness of mediation services.
There are additional challenges that need to be addressed. Due to the amount of attorney fees that a losing party must compensate, the current system may encourage an overindulgent number of objections to claims. Likewise, the lack of diversity of mediators, including background and areas of expertise, was identified as a barrier to its use as an effective dispute settlement.
In order to take these efforts to the next level, Latvia could consider the following recommendations:
Adopt a “no wrong door” approach to help ensure sound co-ordination and triage, directing people with legal issues to the right services and channels.
Promote awareness and embedding ethical values at all stages of ODR service design and delivery.
Continue to ensure that stakeholders are involved as early as possible and throughout the entire process of designing and delivering ODR in Latvia.
Enhance legal literacy and awareness, including on ADR, as a means to empower people, notably vulnerable groups.
Consider running periodic legal and justice needs surveys to help understand people’s and businesses’ needs and assess the effectiveness of justice system policies and initiatives in place.
Consider promoting legal reforms to provide legal certainty and the enforceability of ADR (e.g. arbitration, mediation) decisions.
Consider re-evaluating the amount of attorney fees a losing party must compensate, to prevent the abusive use of legal mechanisms to object claims.
Consider enlarging the use of legal aid to ADR to maximise access to justice and encourage the use of ADR by economically disadvantaged people.
Enhance the attractiveness of mediation by increasing training and creating incentives to attract a more diverse range of prospective mediators.
Set periodic evaluations to help assess the relevance, efficiency, effectiveness, sustainability and impact of reforms in arbitration against new strategic approaches and targets.
1.3. Leveraging digital technologies and data to transform dispute resolution
Latvia has taken steps to introduce digital technologies in the justice sector in the past few years. Some of these efforts are reflected in its justice system, including strategic guidelines for digital transformation, the launch of the e-case portal “Elieta.lv” (an online portal where services, information and file materials are available to parties of an investigation, legal and enforcement proceedings), the implementation of digital tools in courtrooms, authentication mechanisms, electronic signature and a court information system (“Tiesu informatīvā sistēma” - TIS).
Still, there is scope to improve digital and data governance in justice, including allocating responsibilities to a leadership body for digital transformation and further aligning co-ordination mechanisms with central government; adopting a strategic approach that shifts from a digital-by-default concept; and enhancing information and communication technology (ICT) infrastructure. There is also a need to develop data infrastructure and architecture, including standards, reference data and interoperability between systems (e.g. TIS and e‑case) as enablers to improve the design and delivery of justice services, and automation of certain services, such as legal aid, and steps in legal proceedings. Likewise, safeguards and guidelines for the ethical use of data in the justice sector seem lacking. In addition, there is scope to enhance the application of an agile approach in technology management practices; strengthen a collaborative ecosystem between the justice sector and non-governmental and private service providers; and enhance digital skills among justice actors and all members of the justice system.
The following recommendations might be contemplated:
Consider designating a leadership body for digital transformation to provide strategic oversight and facilitate the implementation of digital transformation projects, including ODR.
Adopt a digital-by-design approach when designing ODR services.
Establish sound data governance to support data-driven design and delivery of ODR policies and services.
Establish necessary safeguards and guidelines to ensure the transparent and ethical use of digital technologies and data in the justice sector.
Support a collaborative ecosystem of non-governmental and private service providers to ODR services.
Continue investing in digital technologies, shared services and tools for the long term (e.g. hosting and infrastructure, digital identity and signature) to enable the sustainable digital transformation of justice in Latvia.
Ensure interoperability among various justice systems, notably the TIS, the e-case platform and ODR platforms, to enable end-to-end services.
Continue improving the TIS system, particularly to improve the use of justice services.
Adopt approaches that help manage technological advances, such as technology-neutral law making, favouring open standards and decommissioning services to reduce risks of technology legacy.
Strengthen the digital skills of justice actors and continue improving levels of digital skills among all members of the justice system, including ODR.
Commit to systemically applying an agile approach in the design and delivery of ODR services in Latvia.
Consider automating strictly technical, procedural and/or time-bound steps in the enforcement phase, provided no objections have been submitted by any parties.
Consider automating the process of assessing, conceiving and providing the full spectrum of legal aid services.
1.4. Revamping the simplified procedure in Latvia
The simplified procedure, which is applicable to small claims up to EUR 2 500, with a specific focus on debtor claims, offers advantages to parties choosing this route, including cost-effectiveness, flexibility and less formality in dispute settlement.
The mapping conducted for this report made it possible to identify certain aspects of the simplified procedure that might benefit from reforms. This includes developing further guidance for judges in conducting hearings and providing relevant information to people about the simplified procedure. In addition, there is a need to reconsider the value of monetary claims and streamline technical, procedural and time-bound steps through automation.
To elevate the simplified procedure to another level, Latvia may consider the following recommendations:
Provide further guidance to judges on whether and how to conduct in-person or online hearings in simplified procedure when there is a court hearing conducted, considering judges’ discretion, participants’ rights to participate effectively and integrity in the participation of witnesses, experts and the presentation of evidence.
Improve e-cases portal E-lieta.lv to integrate clear guidelines as part of a justice section in the platform with comprehensive information on the simplified procedure, including applicability, requirements to file a claim and the step-by-step process.
Consider increasing the value of monetary claims subject to the simplified procedure to at least EUR 3 500 by amending Part 2 of Article 25919 of the Civil Procedure Law.
Consider automating aspects of the simplified procedure, including repetitive tasks that represent significant workload (e.g. procedural acts that are not contradictory or that do not require in-depth analysis of facts or law, such as granting due date extensions; issuing time-bound decisions after no response from parties; and notifying parties for the fulfilment of certain requirements, such as the payment of charges, the presentation of documents or information requests or the identification of missing requirements or elements in a file) while preserving a judge’s review as needed.
1.5. Revamping the warning procedure in Latvia
Overall, the warning procedure offers a range of advantages to dispute resolution in Latvia. It is an attractive option for resolving disputes efficiently, cost-effectively and less adversarial than traditional litigation procedures. Concretely, it allows the creditor to obtain an enforcement document against the debtor without undergoing a full litigation procedure. The monetary cap of EUR 15 000 limits the use of such a procedure.
The mapping of the warning procedure for this report also helped identify bottlenecks to efficiency and smoothness. For example, the three-month period to initiate ordinary litigation from the closure of the warning procedure might lead to an unnecessarily lengthy process. Likewise, there is an untapped opportunity to automate certain steps of the warning procedure.
To address these issues, the following recommendations might be considered:
Consider increasing the value of monetary claims subject to the warning procedure to at least EUR 25 000 by amending Point 6 of Part 2 of 4061 of the Civil Procedure Law.
Consider reducing the period given to the debtor to initiate the ordinary procedure from three to two months after the closure of the warning procedure with a positive decision to the creditor by amending Part 1 of Article 40610 of the Civil Procedure Law.
Consider automating certain aspects of the warning procedure (including time-bound processes, assessment of requirements, issuing of the warning and enforcement decisions) as it follows very clear steps based on certain requirements that could be translated into simple rules.
1.6. Revamping consumer claims in Latvia
Consumer disputes arise from consumer law and encompass conflicts between a person who has acquired goods or services from another person or entity acting within their economic or professional capacity. The justice system in Latvia privileges informality and the preservation of relationships to settle consumer disputes. The Consumer Rights Protection Centre (CRPC), the Consumer Dispute Resolution Commission (CDRC), sectoral out-of-court dispute resolution mechanisms and court litigation are some of the options available to settle consumer disputes.
Scope remains, however, to improve public trust in ombud schemes in light of alleged concerns with impartiality and conflicts of interest in the past. Comparatively high non-compliance rates linked to lack of enforceable nature of decisions, little offer of ombuds, limited competency to consumer protection law and lack of centralisation of access to ombuds are some other bottlenecks people may face when trying to solve their consumer issues. The mapping of consumer claims for this report made it possible to identify limited integration between the CRPC and sectoral ombuds’ platforms to court systems, representing a considerable bottleneck for consumers trying to address their legal needs.
To tackle these gaps, Latvia could:
Continue working towards reinforcing public trust in ombud schemes with particular attention to conflicts of interest.
Consider the introduction of binding decisions, subject to judicial review, for certain types of consumer claims (e.g. in the context of banking and insurance), in particular, because dispute settlement before the CRPC is faster and bears no financial burden to consumers.
Consider allowing ombuds to decide a case in its entirety and not limit their competency to consumer protection law, so as to encourage the use of dispute resolution in Latvia.
Consider introducing a single-entry point (e.g. through a one-stop-shop/Latvia e-case platform for all consumer-trader disputes to help centralise and distribute incoming complaints to competent bodies, therefore improving accessibility of ombud schemes for consumer-trader disputes through the provision of a comprehensive offer to consumers.
Consider linking the CRPC and sectoral ombuds’ platforms to court systems.
References
[2] OECD (2023), Recommendation of the Council on Access to Justice and People-Centred Justice Systems, https://legalinstruments.oecd.org/en/instruments/OECD-LEGAL-0498.
[1] OECD (forthcoming), OECD Conceptual Framework for Online Dispute Resolution.