At some point, all of us have complaints against merchants and businesses, but are the courts the best place to resolve those disagreements? Although they have not yet been fully implemented throughout the European Union and country-specific and sector-specific regulations will affect them in some cases, new EU rules on consumer redress have the potential to offer dissatisfied customers routes to resolution that are quicker, easier, and less expensive than going to court. In the process, the rules also should help people throughout the European Union gain a clearer understanding of what alternative dispute resolution is and what it can accomplish.
The new rules, in the form of a Directive on Alternative Dispute Resolution for Consumer Disputes and a Regulation on Online Dispute Resolution for Consumer Disputes, which took effect in July 2015 and January 2016 respectively, require all EU member states to ensure that consumer complaints can be resolved online by nationally certified alternative dispute resolution entities. Together, these two legislative instruments set up a ground-breaking framework for consumer ADR to tackle both national and cross-border disputes within the European Union and create a network of accredited ADR providers, all with the aim of stimulating trade, especially in the online arena. These ADR providers, which may be public or private bodies, can offer a variety of ADR techniques, including mediation, arbitration, and ombuds services.
Not Compulsory – but Available
The ADR Directive does not make participation in ADR compulsory, but it requires all EU national governments to ensure the availability of certified ADR providers (called ADR entities) that meet the procedural standards set in the directive. Among these requirements: certified ADR entities must be able to process complaints online; be free or low-cost for the consumer; and comply with the principles of independence (for instance, ADR entities cannot be employed or remunerated by an individual trader unless the national law allows for this option and ensures additional safeguards), effectiveness (resolving disputes online within 90 days, for example), transparency (such as publishing annual activity reports), fairness (such as giving consumers a cooling-off period before they agree to settle a claim), legality (ensuring that mandatory consumer law is respected, for instance) and liberty (such as guaranteeing that consumers agree to arbitration after the dispute arises).
In addition, all merchants established in member states are obligated to inform a consumer resident in the European Union about the availability of these ADR entities every time the merchants have an unresolved dispute with that consumer or the consumer is not satisfied with the remedy offered by the merchants.
Continued in Part 2 forthcoming next week...