The EU Parliament and Council have reached provisional agreement to update and simplify the EU’s existing alternative dispute resolution framework.
Alternative dispute resolution (ADR) involves impartial, out-of-court bodies, such as conciliators, mediators, arbitrators, the ombudsmen and complaints boards, helping consumers and companies resolve issues amicably, in a fair and low-cost manner. The new rules rules aim to modernise the existing ADR rules for the digital economy, making it easier to resolve cross-border disputes and streamlining procedures for both consumers and businesses.
The agreed rules clarify the scope of the ADR framework to consumer rights disputes stemming from a contract, including issues that occur before the contract (e.g. advertising and information provision) and after it ends (e.g. use of digital content).
2 out of 5 online transactions made by EU consumers are with traders established in third countries, so the agreement allows for such traders to participate in ADR procedures as well.
Unless specific EU law or national legislation imposes trader participation in out-of-court dispute resolution, businesses will continue to be free to decide whether to participate in alternative dispute resolution or not. To boost trader and consumer participation, member states should put in place measures encouraging out-of-court settlements, for example through information campaigns, certificates or financial incentives. In doing so, they should pay particular attention to sectors with a high number of consumer complaints, especially the transport and tourism sectors, including air passenger rights.
The new rules introduce a duty for traders to respond whether they intend to engage in the proposed procedure when a consumer requests ADR intervention. Negotiators agreed that this period should not exceed 20 working days (30 in complex cases). A lack of a response would be treated as a refusal, allowing cases to be closed.
The agreed measures allow ADR entities to bundle similar cases against the same trader together (with consumer consent), leading to faster and more coherent procedures.
They must maintain websites where consumers can easily find information on such procedures, as well as submit and track their complaints online.
