Since a consumer is considered to be the „weakest” from contracting parties, his financial possibilities and other resources for effective dispute resolution may not be compared with those of a merchant. Also it should be taken into account that very often goods are purchased with a low value, which therefore is the main reason refraining the consumer from resolution of a dispute by way of litigation. In this case when facing default of a contract, the possibilities of the consumer for protection of his rights are very limited. The consumer is in as economically as intellectually weaker position than the merchant, therefore it is very likely that when solving a dispute in courts of general jurisdiction, the consumer will lose. In order to balance possibilities of the parties there should be sought such dispute resolution mechanism, which is the most appropriate for the consumer. Such a mechanism is alternative dispute resolution types.

In comparison with conventional litigation alternative dispute resolution types concerning consumer disputes offer the following essential advantages:

• The procedure is easily accessible, very often circumventing bureaucratic procedures that exist in court proceedings. With majority of the existing ADR types it is possible to start the procedure in electronic way regardless of the place of location of the parties;
• With the majority of ADR types the procedure for the consumer is available free of charge or the charge is determined proportionally to the value of the disputed goods;
• The consumer has the right to apply ADR schemes without usage of any other legal assistance;
• In the recommendations issued by the European Commission there is a principle laid down, that an ADR decision should be passed sooner than it would have been passed in a Court of First Instance, therefore the procedure ensures relatively fast dispute resolution. 

In Latvia institution which is approved as functioning in accordance with the European Commission’s Recommendations EC 98/257 and EC 2001/310 is Consumer Rights Protection Centre of Latvia.

In order to facilitate development of out-of-court dispute resolution mechanisms in the Member States of the European Union, the European Commission has issued Commission Recommendation 1998/257/EC of 30 March 1998 on the principles applicable to the bodies responsible for out-of-court settlement of consumer disputes, laying down the most important principles to be observed by the out-of-court complaint settlement bodies. European Commission Recommendation 2001/310/EC of 4 April 2001 expands the circle of out-of-court dispute resolution mechanisms, which are covered by these complaint settlement principles.