Alternative dispute resolution allows consumers and traders to resolve disputes quickly and inexpensively without going to court.
The EU rules on out-of-court consumer redress (the Alternative Dispute Resolution (ADR) directive and the Online Dispute Resolution (ORD) regulation were established in 2013 and have not been update since. The ODR platform was created to help settle disputes over online purchases. However, its potential has not been fully realized and maintaining it is not cost-effective. In October 2023, the Commission proposed to discontinue the platform and to adapt the ADR directive to the evolving digital market landscape.
MEPs adopted on Thursday their position on the alternative dispute resolution (ADR) proposal, which allow consumers to, submit complaints against traders to entities offering independent, fast and affordable redress for consumers. The revamped rules aim to increase overall consumer awareness and participation of businesses in out-of-court dispute resolution.
Rapporteur Laura Ballarín Cereza (S&D, ES) said “After more than 10 years, the alternative dispute resolution directive it is still falling short of its potential. We need a revision that provides consumers and traders with useful and effective ADR entities by enhancing traders’ participation, including mandatory participation for airline operators, and increasing consumer awareness. Consumers must be informed by traders clearly and prominently about their adherence to ADR entities on their websites and invoices.”
Improving access to information
To avoid disrupting consumer services after the discontinuation of the ODR platform, an interactive digital tool will continue to provide information on ADR procedures, including by offering general information on consumer redress and cross-border procedures. Consumers would be able to submit and access their complaints online. Traders would be required to provide ADR information in a prominent and accessible way (e.g. on their website, invoices), as well as their email details.
More efficient and simplified process
The adopted text includes measures to bundle together similar cases against the same trader (with the consumer’s consent) and to facilitate direct interactions between consumers and traders, in order to help streamline the dispute resolution process.
MEPs consider it vital to maintain high-quality ADR entities to build trust among consumer and traders, and therefore suggest regular updates to the expertise and training of staff in the ADR entities.
Key additions by MEPs
MEPs propose that ADR entities not only monitor the outcomes of ADR procedures but also list traders who systematically or unduly refuse to comply with the outcomes of the ADR procedures. Irrespective of whether the outcome is binding, the trader would have to provide a written explanation.
Given the high number of air passenger rights complaints, MEPs want to make it mandatory for airline carriers to participate in ADR. They also propose the possibility of extending the benefits of consumer ADR systems to micro enterprises and self-employed.
MEPs approved on Thursday the draft report on alternative dispute resolution for consumer disputes unanimously with 40 votes in favour and none against. A second report on the discontinuation of the online dispute resolution platform, approving the Commission proposal without amendment, was also adopted with 40 votes in favour and none against. The texts will now be voted an upcoming plenary session.
