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Alternative consumer dispute resolution

Alternative dispute resolution (ADR) is a term used to refer to various mechanisms of dispute resolution without involving court. Alternative dispute resolution is a simple, quick and non-expensive way how to solve disputes between consumers and traders out of court. 

As a consumer is supposed to be the ‘weaker’ of the contract parties, his or her financial potential and other resources for efficient dispute solution are not comparable to those of a traders. Goods of an insignificant value are often delivered, which withholds the consumer to solve the dispute in overall civil procedural procedure in court. In order to balance the options of the contract parties to solve the occurred disagreement, alternative dispute resolution is a more convenient to a consumer mechanism of dispute solution.

Alternative dispute resolution procedures may take place in various ways in the European Union – conciliator, mediator, arbitrator, ombudsperson, complaint examination committee etc.

In order to ensure possibilities of alternative dispute resolution in entire European Union, on July 8, 2013 came in force Directive on alternative dispute resolution for consumer disputes (Directive on consumer ADR) that was to be transposed into the normative acts of the Member States by July 9, 2015.

The Member States are obliged to ensure that the disputes where a trader is involved that performs business activities in the respective Member State may be submitted in a relevant alternative dispute resolution entity. Thereby it is ensured that alternative dispute solution procedures are possible to be applied in all the market sectors and all the Member States.

An alternative dispute solution entity is a neutral structure (an institution or a natural person) that is established on a durable basis according to certain quality criterions and its purpose is to solve out of court disputes between traders and consumers by applying any of the alternative dispute resolution procedures:

  • Bring together the involved in the dispute parties in order to try to reach a settlement;
  • Suggest a solution;
  • Determines a solution.

Such disputes are to be submitted to the Alternative dispute resolution entities if

  • The trader performs the business activities in the European Union.
  • The consumer lives in the European Union.
  • The dispute is related to the contractual liabilities (both regarding online and offline contracts) that follow from the sales contracts or service contracts in all the sector of economy.

Each Member State shall establish a list of the dispute resolution entities that are created in their territory and conform to the quality criterions in accordance with the Directive on consumer ADR.

The Directive does not provide that the participation of traders in the alternative dispute resolution procedures is mandatory and that outcome of such procedures is binding to a trader if a consumer has filed a complaint against them, yet the Member State may provide in its national normative acts that the participation of traders in such procedures is mandatory.

Obligation to inform

In case a dispute occurs it is necessary that the consumer may determine without delay in the competency of which ADR entities examination of the particular complaint belong and learn whether the respective trader will participate in the dispute resolution procedure.

In case the trader has agreed to employ or it is the trader’s obligation (in accordance with the normative acts of the Member State) to employ a certain alternative dispute resolution entity in order to solve disputes with the consumers, it is the trader’s obligation to provide information regarding such entities on its website as well as in its overall conditions.

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