Revision of alternative dispute resolution and online dispute resolution framework to improve the enforcement of consumer law

In “A New Push for European Democracy”

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According to the 2021 edition of the consumer conditions survey published by the Commission, only 5 % of the EU consumers – roughly 2.250 million persons – who encountered a problem in buying a product or service, and took subsequent action, reported it to an alternative dispute resolution (ADR) body.The survey also stresses that the recourse to such bodies ranges from 0 % to 12 % across the Member States.

On 17 October 2023, the Commission adopted a proposal  for a directive amending Directive 2013/11/EU on alternative dispute resolution for consumer disputes, as well as Directives (EU) 2015/2302, (EU) 2019/2161 and (EU) 2020/1828.

The proposal contains the following main changes:

The extended scope of application constitutes the most important change. It entails two dimensions, one material and one geographical. As for the material scope, Article 2 on the scope of the Directive would be modified, in particular to include a new paragraph 2(1) b that would make eligible consumer rights applicable to non-contractual and pre-contractual situations, (including the supply of digital content and service contracts), to alternative dispute resolution (ADR). Whilst this paragraph includes an indicative list of seven such situations (for instance the right to switch providers), it allows Member States to extend further ADR to other categories of disputes.
                                                                                                                                                         As for the geographical scope, whilst Article 2 on the scope of the Directive would be modified to delete the reference of the geographical establishment of the traders concerned by the Directive, the proposed changes to Article 4 on definition includes a new point f) at Article 4(1), which defines a ‘cross-border dispute’ as a dispute between a consumer resident in a Member State, and a trader established in another Member State or established outside the Union.

The proposed changes also aim at strengthening the remit of the ADR entities established in the Member States. With the proposed Article 5 on access to ADR and ADR procedure, the proposed change to Article 5(2)c) would authorise ADR entities to bundle similar cases into one procedure, on the condition that the consumers would not object. Also, the new Article 5(8) would create an obligation for Member States to make sure that any trader established in their territories would respond in a period of time of maximum 20 working days, to any ADR established in the EU, on whether it would accept to participate in an ADR procedure.  Recital 13 also allows Member States to introduce national legislation that would oblige traders to participate to ADR procedures, in specific sectors, beyond the enforcement of analogous obligations in Union sector specific legislation.

To encourage the uptake of ADR procedures, the proposed directive also includes a set of consumers incentives. The proposed Article 5(2) mentioned above also provides for the traceability of the complaints lodged  by consumers, as well as the requisite supporting documents. Also, this Article ensures the adaptation of such procedures to vulnerable consumers, by spelling-out a generic obligation to use ‘easily accessible and inclusive tools’, but also by allowing non digital procedure upon request. Then, the new Article 5(2) c) would recognize the right of the parties (traders and consumers) to have the ADR procedure reviewed by a natural person, when such procedure would be carried out by automated means.

The facilitation of cross-border ADR procedures is another significant change of the proposal. With the newly proposed Article 14 on assistance for consumers, the information rights of the parties would be improved. Article 14(1) would ensure the right of consumers and traders to obtain assistance to access the competent ADR, in the case of a cross-border dispute. Article 14(3) lays down the minimum requirements of these information rights: it should cover explanations on the rules applied by the relevant ADR entities. Article 14(2) requires Member States to designate one ADR contact point in charge of the obligations laid down in Article 14. It also prescribes to Member State to confer the responsibility for the operation of such contact points to the European Consumers Centres Network, to consumer organisations, or any other entity in charge of consumer protection.

On 14 February 2024, the European Economic and Social committee adopted an opinion on the proposal. It notably invites the co-legislators to focus on ways to make parties adhere voluntarily to the decisions of ADR bodies

In the Parliament, the file has been referred to IMCO committee, which adopted the report unanimously on 22 February 2024.

To increase trader participation, the report includes an amendment to Article 1 that would make participation of air carriers falling under the scope of Regulation (EC) 261/2004 mandatory in ADR procedures. The report also amends Article 2 on the directive's scope. An amendment would include the pre-contractual obligations mentioned in Article 2(1) point b) of the Commission proposal.

To improve consumer awareness, the IMCO report proposes a set of complementary approaches. The impartiality and quality of procedures carried out by ADR entities should be improved. An amendment to Article 5(2) point c) specifies that, where a complaint would be treated using automated means, the parties could demand a natural, independent and impartial person reviews the procedure. Similarly, an amendment to Article 6(1) point a) would require ADR entities to employ natural persons with a general understanding of private law in cross-border cases. 

In the Council, the file has been referred to the working party on consumer protection and information.

On 13 March 2024, the Plenary endorsed the report as Parliament first reading position with 605 votes in favour, 7 votes against and 13 abstentions.

References

Author: Clément Evroux, Members' Research Service, legislative-train@europarl.europa.eu

As of 20/05/2024.