What does the EC's report to the European Parliament say about ADR/ODR?

In its report to the European Parliament on the implementation of Directive 2013/11/EU on the resolution of consumer disputes, the European Commission says that, as a result of studies, it has come to the conclusion that European consumers have access to a high-quality alternative resolution procedure of Disputes (ADR), in all Business to customer (B2C) segments, regardless of whether it concerns online or offline purchases, local or cross-border within the EU. At the same time, however, the consumer ADR is still not used on a large enough scale due to the lack of awareness, difficult orientation in the varieties of the various ADR schemes, but also due to the lack of interest on the part of traders to participate in such procedures.

In the EU's ODR platform, where cross-border dispute resolution is possible, even with translation into all European languages, despite the high traffic of its page, the interest of consumers to file complaints there is limited, and traders in most cases either do not respond to complaints filed against them, or offer to resolve the dispute outside the platform.

Mechanisms used for ADR

64% of the notified ADR bodies offer non-binding solutions for the parties to the dispute, 20% offer binding ones, the rest - binding only for the trader or more than one option for an agreement.

At the NAIS ADR Center, mediation is used as a procedure in which a third party, a mediator, assists the disputing parties to come to settlement proposals themselves. He/she does not have the right to directly offer such, but has the task of stimulating them to generate as many variants as possible. Conciliation commissions of the CPC make a proposal for an agreement, which is not binding on the parties.

In some of the member states, there are ADR bodies specialized in specific business sectors, such as the sectoral conciliation commissions in Bulgaria, under the CPC. General conciliation commissions cover the remaining trade sectors. Other countries have centers covering all business cases, such as the NAIS ADR Center. In some countries there are centers that are attached to commercial organizations, others have a decentralized system, with ADR bodies for the different regions and provinces.

Use of ADR by traders

Only 30% of traders are willing to use the ADR mechanism and 43% are not aware of its existence at all. However, in most Member States, when a consumer complains to an ADR authority, traders are generally willing to participate in a dispute resolution procedure, with 10% refusing to do so.

Use of ADR by consumers

The application of Directive 2013/11/EU is limited due to the fact that consumers are not sufficiently informed about the existence of ADR as a mechanism. Only 6% of them turn to an ADR authority when they have a problem with a trader.

Of the 300,000 disputes raised in EU member states, two-thirds are in Italy, Germany and France, and the least are in Croatia. The largest number of ADR procedures per capita is in Norway, Estonia and Lithuania, the smallest - in Southern and Eastern Europe.

50% of the conducted procedures under the APC end with a decision.

EU ODR platform

Despite the high number of visits to the EU ODR platform webpage (2.5 million visits in 2022), the obligation of online traders to refer to it and the many improvements to its interface, less than 2% of its visitors actually use it. It turns out that many users do not understand its purpose and cannot navigate it.

The ODR platform has accumulated 180,000 complaints since its launch in 2016, 19,000 companies have registered with it, but despite this, 80-85% of complaints remain unanswered and only 1%, less than 200 cases, end with a result.

The platform underwent a complete redesign in the period 2017-2018, as a result of analysis and survey of users, which was also conducted with representatives of NAIS. However, consumer engagement has remained low, despite improvements and the EC's information campaign.

The reluctance of traders to use the platform is due to various factors, but most of all to the fact that e-commerce happens most in the so-called marketplaces that have developed their own digital dispute resolution systems to be able to resolve the problems of dissatisfied customers more quickly.

As a result, in the new proposals to change Directive 2013/11/EU, requirements are laid down for these internal schemes of the trading platforms to meet the criteria set for ADR in the Directive. If they use automated processes, with the participation of artificial intelligence, to resolve disputes, they must clarify this for the participants in the procedure and give them the right to have the outcome of it revised by a human. Also, these in-house ADR/ODR centers must prepare a regular self-assessment at least every 2 years on how the quality criteria of the Directive have been implemented.

One of the demotivating circumstances for consumers is that in many cases they do not receive any response to their complaints from the traders. This undermines confidence in the ADR procedure as a whole, not only in the ODR platform. 56% of these users said they would not use it again.

For this reason, one of the proposals for the reform of Directive 2013/11/EU is to drop the obligation of traders to refer to the ODR platform and to inform their customers about ADR if they do not intend to participate in such a procedure.

A further survey was carried out by the EC among the traders, regarding what changes in the interface and functionalities of the ODR platform could make them respond to complaints, the result of which is discouraging because it turns out that no changes can improve the situation.

This circumstance has led to the decision to discontinue the ODR platform as a dispute resolution tool and to transform it into a tool for guiding users in their rights and directing them to ADR authorities. The more important change in the ADR Directive for traders is that they will be obliged to respond to complaints logged against them with the ADR authorities.

The role of ECC (European Consumer Centers)

ECC were intended to be contact points regarding the ODR platform. They were supposed to assist users and support them with this digital tool. In reality, it turns out that they have become the point of contact that guides directly to the ADR authorities, instead of only supporting the platform. The latter  was created in years when the online market was still developing, and many of the ADR bodies themselves were not so prepared to accept this modern alternative to dispute resolution.

Unlike the ODR platform, the one of our ADR Center NAIS continues to develop. Due to the imminent closure of the European alternative, where we currently resolve cross-border and local disputes, we plan to translate the NAIS one so that users from other countries can also file complaints with us.

We believe that digital tools are the future of ADR, this was practically proven during the Covid quarantine periods. Artificial intelligence is about to enter our work, which would make it much easier for dispute resolution specialists. Why we think so, you can read in the post How can artificial intelligence serve alternative dispute resolution? from our "Mediator's Diary" column.


Stay tuned for more news from the world of ADR on our website nais.bg.

Published on 23.11.2023 Back to news