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Summaries of EU Legislation

  • Archived: true

    • Out-of-court settlement of consumer disputes

    The Commission is in favour of the out-of-court settlement of consumer disputes. In order to encourage consumers and undertakings to have more faith in extrajudicial dispute procedures, the Commission establishes principles aimed at improving the quality of such procedures.

    ACT

    Communication from the Commission of 30 March 1998 on the out-of-court settlement of consumer disputes [COM(1998) 198 final - not published in the Official Journal].

    Commission Recommendation 98/257/EC of 30 March 1998 on the principles applicable to the bodies responsible for out-of-court settlement of consumer disputes [Official Journal L 115 of 17.4.1998].

    SUMMARY

    The Commission intends to facilitate access by consumers to extrajudicial dispute resolution procedures *.

    Consumers may encounter barriers when attempting to have their rights upheld, in particular due to the high cost of legal assistance and the length and complexity of court proceedings, especially in cross-border disputes.

    The Commission therefore proposes to promote extrajudicial dispute resolution procedures such as mediation, conciliation or arbitration. Such procedures may assist consumers and undertakings and enable them to resolve their disputes simply, quickly and cheaply.

    Extrajudicial dispute resolution

    The Commission recommends compliance with the following principles:

    • the independence and expertise of the body involved;
    • transparent procedures and functioning of the body involved;
    • effective, fast, cost-free or cheap procedures. In addition, recourse to a lawyer or legal representative must be optional, although each party shall be entitled to defend their point of view;
    • the lawful nature of decisions, which must comply with consumer protection legislation;
    • the fair nature of the procedure for each party involved.

    Context

    This Recommendation is a follow-up to the conclusions of the Green Paper on access of consumers to justice and the settlement of consumer disputes in the single market.

    Key terms

    • Extrajudicial procedure:  any method enabling a dispute to be resolved through the intervention of a third party that proposes or imposes a solution. Extrajudicial instruments may be established by public authorities, professionals in the legal sector, professional bodies or civil society organisations (arbitration tribunals, private arbitration centres, mediators, etc.).

    RELATED ACTS

    Directive 2008/52/EC of the European Parliament and of the Council of 21 May 2008 on certains aspects of mediation in civil and commercial matters.

    Commission Recommendation of 4 April 2001 on the principles for out-of-court bodies involved in the consensual resolution of consumer disputes not covered by Recommendation 98/257/EC [Official Journal L 109 of 19.4.2001]. This recommendation applies to bodies responsible for out-of-court consumer dispute resolution procedures to resolve a dispute by bringing the parties together to find a solution by common consent. These bodies should take account of the following principles: impartiality, transparency, effectiveness and fairness of the procedure.

    Last updated: 06.07.2011

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