Alternative dispute resolution allows consumers and traders to resolve disputes quickly and inexpensively without the need of court intervention.
On Wednesday, Parliament adopted its first reading position on the alternative dispute resolution (ADR) proposal, which allow consumers to, submit complaints against traders to entities offering independent, fast and affordable consumer redress. The updated rules aim to increase overall consumer awareness and encourage the participation of more businesses in out-of-court dispute solutions.
Improving access to information
To avoid disrupting consumer services after the phase-out of the ODR platform, a interactive digital tool would continue to provide information on ADR procedures. This will include general information on consumer redress and cross-border procedures. Consumers would be able to submit and track their complaints online, but an offline option remains possible. Traders would be required to provide ADR information in a prominent and accessible way (e.g. on their website, invoices), to enhance transparency and consumer awareness.
Streamlining dispute resolution procedures
The draft measures allow for bundling similar cases against a specific trader together (with the consumer’s consent) and encourage direct dialogue between consumers and traders. MEPs add that these out-of-court procedures should be offered to the consumer preferably at no cost (or kept to a nominal fee) and reimbursable by member states. These measures would help make the ADR processes easier and more cost-efficient.
MEPs emphasise the need to have high-quality ADR entities to build trust between consumers and traders, and therefore suggest regular updates to the expertise and training of staff in the ADR entities.
Key additions by MEPs
MEPs propose that ADR entities not only monitor the outcomes of ADR procedures but also list traders who systematically or unduly refuse to comply with the outcomes of the ADR procedures. Irrespective of whether the outcome is binding, the trader would have to provide a written explanation.
Given the high number of air passenger rights complaints, MEPs want to make it mandatory for airline carriers to participate in ADR processes. They also propose the possibility of extending the benefits of consumer ADR systems to micro enterprises and self-employed.
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During the plenary debate on Monday, the rapporteur Laura Ballarín Cereza (S&D, ES) said:
“We propose a system that is fair to consumers and traders, an ADR mechanism that is more useful. We want better involvement of traders in sectors with more complaints, so we make the participation in ADR compulsory for airlines. We aim to raise awareness of these tools by requiring traders to include information on ADR mechanism on their websites and invoices. In addition, the trader has to respond within 20 days after a complaint is filed. We hope the Council will soon adopt its position, so by the end of the year we will have a new law that improves EU’s dispute resolution and mediation system”.
Next steps
MEPs adopted the report on alternative dispute resolution for consumer disputes with 605 votes in favour, 7 against and 13 abstentions. A second report on the discontinuation of the online dispute resolution platform, approving the Commission proposal without amendment, was also adopted with 618 votes in favour, 3 against and 1 abstention.
Background
Since they were established in 2013, EU’s rules on out-of-court consumer redress (the Alternative Dispute Resolution (ADR) directive and the Online Dispute Resolution (ORD) have not been updated. The ODR platform was created to help settle disputes over online purchases, however it has proved to be ineffective. In October 2023, the Commission proposed to discontinue the platform and to adapt the ADR directive to the evolving digital market landscape.
Source – EU Parliament