Alternative dispute resolution for consumer disputes

SUMMARY OF:

Directive 2013/11/EU on alternative resolutions for disputes between traders and consumers

WHAT IS THE AIM OF THE DIRECTIVE?

It ensures that EU consumers can submit their contractual dispute with an EU trader* over a product or service to an alternative dispute resolution (ADR) entity — a recognised body whose role is to resolve disputes by means of ADR procedures, i.e. without going to court.
It sets out binding quality requirements for ADR entities and procedures to ensure aspects such as transparency, independence, fairness and effectiveness.
Compliance is ensured by national competent authorities designated by EU countries.
It obliges traders to inform consumers about ADR when the former have committed or are obliged to use ADR and when they cannot bilaterally resolve a dispute with the consumer.

KEY POINTS

EU countries must ensure that all contractual disputes that arise from the sale of goods or provision of services — between consumers residing in the EU and traders established in the EU — can be submitted to an ADR entity. It applies to both online and offline sales and services.
The goal of this legislation is to ensure the proper functioning of the EU’s single market.
ADR offers consumers an affordable, simple and fast way of resolving disputes, such as when a trader refuses to repair a product or to make a refund to which a consumer is entitled.
ADR entities involve a neutral party, such as a mediator, ombudsman or complaints board, that attempts to resolve the dispute through an ADR procedure. Depending on the form of ADR procedure that a given ADR entity operates, the neutral party can either:
- propose or impose a solution; or
- bring the parties together to help them find a solution.
All ADR entities must meet binding quality requirements, guaranteeing that they operate in an effective, fair, independent and transparent way.
Each EU country must designate one or several competent authorities, which have national oversight over ADR entities and ensure their compliance with the quality requirements. The competent authorities establish national lists of ADR entities. Only disputes resolution entities that comply with the quality requirements can be included as ‘ADR entities’ in those lists.
Traders who agree or are obliged to use ADR must inform consumers about ADR on their websites as well as in their general terms and conditions. They must also inform consumers about ADR when a dispute cannot be settled directly between the consumer and the trader.
In the interest of transparency, EU countries must ensure that ADR entities’ websites provide clear and understandable information. This includes contact details and the types of disputes that these entities can deal with, as well as costs, average length and legal effect of the outcome of the ADR procedure. ADR entities must also make publicly available on their websites the annual activity reports containing information on the disputes that they have handled.
ADR entities must cooperate in the resolution of disputes within the EU. They must also exchange best practices among themselves and with national authorities about the settlement of disputes.
This directive applies to all market sectors, with the exception of health and higher education.

FROM WHEN DOES THE DIRECTIVE APPLY?

It has applied since 8 July 2013. EU countries had to incorporate it into national law by 9 July 2015.

BACKGROUND

For more information, see:

‘Alternative and online dispute resolution (ADR/ODR)’ on the European Commission's website.

* KEY TERMS

Trader: a person or business that sells a product or service.

MAIN DOCUMENT

Directive 2013/11/EU of the European Parliament and of the Council of 21 May 2013 on alternative dispute resolution for consumer disputes and amending Regulation (EC) No 2006/2004 and Directive 2009/22/EC (Directive on consumer ADR) (OJ L 165, 18.6.2013, pp. 63-79)