The European Commission has proposed a new Regulation (a law that applies automatically across all EU states) to create a single EU-wide online platform for online shoppers buying from another EU country and traders to resolve their contractual disputes online. The proposal will have significant impact on the sale of downloaded software and digital publications across EU member state borders.
The proposal comes in tandem with the Commission’s proposal for a Directive (a law that must be implemented by each of the EU member states) on Alternative Dispute Resolution (ADR) with the objective of putting in place quality out-of-court entities to deal with contractual disputes between consumers and businesses. The Directive would apply to any contractual disputes between consumers and businesses, not just those online.
The proposed Directive will cover mediation procedures, procedures before consumer complaint boards and arbitration and conciliation procedures. It will not apply to consumer complaint handling systems operated by or on behalf of the trader. It also does not cover direct negotiations between the parties.
Each member state will be free to decide how best to ensure full ADR coverage in its territory. Countries with ADR entities that cover many different sectors will be free to keep them or create new ones, provided the entities respect the quality principles defined in the proposal. Consumers will be entitled to receive complete information about the ADR entity competent to deal with their contractual dispute in the main commercial documents provided by the trader and on the trader’s website. Member states may point consumers in the direction of the European Consumer Centre (ECC-net), which currently guides consumers to ADR entities competent to deal with cross-border disputes.
It is noteworthy that most ADR systems today are voluntary, which allows for flexibility and speed. The Commission’s proposal does not make ADR mandatory, but member states will be free to create their own national rules making the participation of traders in ADR procedures mandatory or their outcome binding on traders. It is likely therefore that in many parts of Europe the referral of consumer disputes to a national ADR body will become mandatory.
The proposed Regulation relating specifically to online consumer disputes builds on the national ADR entities contemplated in the draft Directive. Under the proposed Regulation all matters in dispute can be handled online and referred automatically to the relevant national ADR body, and this is designed to help solve disputes regarding online purchases where the consumer and trader are located far from each other. The single point of entry will be a user-friendly interactive website, accessible in all languages of the EU and free of charge.
There will be a set of common rules to ensure that the system is effective. These rules will set out the role of national contact points acting as ADR facilitators in the respective country and they will include a requirement to deliver a solution within 30 days.
The European Parliament and the EU Council have committed to adopting the package by the end of 2012. Member states will then have 18 months to implement the Directive, which means that it should be in place during the second half of 2014. It is hoped that the EU-wide platform for online dispute resolution will be fully operational by early 2015. The funding may be private (for example, by industry), by public funds or a combination of both.
The U.K.’s Department for Business Innovation and Skills has now issued a Call for Evidence (http://www.bis.gov.uk/assets/biscore/consumer-issues/docs/c/11-1372-call-for-evidence-eu-proposals-dispute-resolution.pdf) seeking views from traders, consumer groups and regulators in the UK to help inform the UK’s negotiating position on the draft Regulation and Directive. In particular, it asks whether respondents believe that the European Commission’s proposals will lead to its anticipated benefits for consumers, and for views on the costs of, and standards required by, the proposals. Responses are requested by 31 January 2012. A consultation on how the UK will implement the EU proposals will be launched in due course
ADR is in the spotlight currently. A consultation by the European Commission, aimed at improving the use of ADR to resolve commercial disputes in the EU, closed on 15 March 2011. The responses to the consultation showed strong support for ADR schemes as an alternative to court proceedings, as well as for development of ADR to benefit both consumers and businesses.
© Taveners 2011