Discussions on the Proposed Revisions to the ADR Directive

Trilogue negotiations are underway on the proposed revisions to the ADR Directive. One element that is certain to be included in the final text is the obligation for traders to respond to complaints filed against them with ADR entities. What remains under discussion is the nature and scope of the sanctions that will apply if traders fail to comply with this requirement.

On 17 October 2023, the European Commission presented a proposal to amend Directive 2013/11/EU on alternative dispute resolution (ADR) for consumer disputes, along with related directives – (EU) 2015/2302, 2019/2161, and 2020/1828. The aim is to create a more flexible and effective framework that reflects the realities of the digital market and cross-border trade.

Key Proposals for Change

1. Expanded scope of the ADR Directive
   The proposal introduces changes in two major directions – material and geographical:

• Material scope:
  The revised directive would allow consumers to access ADR not only in contractual situations but also in pre-contractual and non-contractual contexts — for example, in cases of misleading advertising or lack of information. Member States will be allowed to extend the scope further based on national considerations.
• Geographical scope:
  The requirement that traders must be established in the EU would be removed. A new definition of "cross-border dispute" would include any dispute between a consumer residing in a Member State and a trader established in another Member State or outside the EU.

2. More powers for ADR entities
   Several changes aim to improve the effectiveness of ADR bodies:

• They would be allowed to consolidate similar complaints against the same trader into a single procedure, provided consumers do not object.
• Member States would be required to ensure that every trader established in their territory responds within 20 working days as to whether they will participate in an ADR procedure.

3. Improved access and consumer incentives
   To promote the use of ADR among consumers, the proposal introduces:

• Traceability of complaints and supporting documents;
• Adaptation of procedures to vulnerable consumers through accessible and inclusive tools;
• An option for non-digital procedures upon request;
• The right for parties to request review by a natural person when disputes are processed through AI-supported automation.

4. Enhancements for cross-border dispute resolution
   A new mechanism for support in cross-border cases is proposed. Each Member State would be required to designate a contact point to help consumers and traders access competent ADR bodies. This role could be performed by a European Consumer Centre, a consumer organisation, or another body responsible for consumer protection.

Legislative Progress and Institutional Positions

• On 14 February 2024, the European Economic and Social Committee expressed its support for the proposal, highlighting the need to encourage voluntary trader participation in ADR procedures.
• The file was reviewed by the Internal Market and Consumer Protection Committee (IMCO) of the European Parliament. On 22 February 2024, the committee unanimously adopted a report on the topic, led by rapporteur Laura Ballarín Cereza (S&D, Spain).

The IMCO report includes the following proposals:

• Mandatory participation of air carriers under Regulation (EC) 261/2004 in ADR;
• Inclusion of pre-contractual obligations within the directive’s scope;
• Right to human review when AI is used in resolving disputes;
• Requirement that ADR entities employ staff with basic understanding of private law, especially in cross-border cases.

On 13 March 2024, the European Parliament adopted the report as its first-reading position.

Council Position and Start of Negotiations

The Council of the EU examined the file within the Working Party on Consumer Protection. On 25 September 2024, the Council approved its negotiation mandate. It proposed:

• Restoring the scope of the directive to cover only contractual obligations;
• Removing the extension to include traders established outside the EU.

On 28 January 2025, the IMCO Committee agreed to start interinstitutional negotiations, and the decision was announced on 10 February 2025.

The first trilogue between the European Parliament, Commission, and Council took place on 20 February 2025. Institutions exchanged positions and began discussions on key issues, including:

• The material and geographical scope of the directive;
• Participation of air carriers;
• The obligation for traders to respond to ADR invitations;
• Additional responsibilities for ADR bodies, traders, and Member States.

Latest Developments in the Negotiations

According to recent updates from trilogue participants, discussions are ongoing on introducing sanctions for traders who fail to respond to ADR complaints within the required timeframe. The deadline is still under negotiation — between 15 and 20 days — with BEUC (the European Consumer Organisation) advocating for a 15-day limit. BEUC also insists that a lack of response should not be interpreted as a refusal to participate in ADR.

Further discussions include the possibility of requiring traders who refuse to comply with agreed settlements to provide written justification. Additionally, BEUC opposes proposals that would remove the obligation for traders to inform consumers on their websites about the right to access ADR.

Stay tuned for updates at nais.bg and on the NAIS social media profiles — Facebook and LinkedIn.