What will change in the Alternative Dispute Resolution (ADR) Directive 2013/11/EU and how does it affect traders, consumers and ADR bodies?

On October 17, 2023q, the European Commission adopted proposals to change the legal framework for Alternative Dispute Resolution (ADR) in three main areas:

• Proposal to change the ADR Directive 2013/11/EU
• Proposal to change the regulation for Online Dispute Resolution
• A recommendation addressed to online marketplaces and EU trade associations having a dispute resolution mechanism and to Member States.

The goals of these changes are to:

• Make the legal framework for alternative dispute resolution suitable for digital markets and cover all categories of disputes concerning the rights of EU consumers.
• Improve the access to ADR in cross-border disputes, through the use of digital tools and assistance for consumers and traders.
• Simplify some processes related to ADR, namely reducing the volume of reporting by ADR authorities.
• Simplify some processes for traders. They no longer have the obligation to inform users about the mechanisms of ADR/ODR, if they do not intend to participate in such processes. It should be noted, however, that in order to increase the incentive for traders to get more involved with ADR, they will be obliged to respond to complaints submitted to them by consumers at ADR centers such as NAIS .
• End the obligation to use the platform for online dispute resolution by looking for other, more user- and trader- friendly digital forms.
• Incentivize online marketplaces and EU trade associations having a dispute resolution mechanism to get aligned with the quality criteria in the ADR Directive.

The planned changes should achieve the following improvements:

1.      Extending the scope of the ADR Directive

In its current form, the Directive only covers disputes arising from contractual obligations between traders and consumers located within the EU.

With the new changes, the Directive will also apply to cases involving unfair commercial practices, namely misleading price indication, discriminatory practices, issues related to switching of service providers, omission of pre-contractual information, portability of content, remedies related to the right to repair, etc. Also, Non-EU traders will be able to participate in the ADR with EU consumers.

2.      Increasing the participation of traders in ADR procedures

Under the current ADR/ADR framework, the voluntary participation of traders does not sufficiently incentivize them to respond to complaints against them at ADR bodies.

With the new changes, traders' participation in ADR/ORP procedures remains voluntary, but they will have an obligation to respond to complaints filed against them in ADR centers within 20 working days, as well as to indicate whether they intend to participate in the dispute resolution.

Also, online traders will no longer be required to post a link to the ODR platform and maintain a dedicated email address for this purpose. Putting such information in combination with the traders’ reluctance to actually participate in an ADR procedure leads to confusion and disincentive for consumers to trust ADR mechanisms

3.      Targeted consumer assistance in cross-border and domestic ADR

At present, consumers can obtain assistance to access cross-border ADR through European Consumer Centers (ECC), consumer organizations or other bodies. With the new provisions, member states themselves will determine which organizations will support communication between parties to disputes, provide information about ADR bodies, as well as inform about consumer rights, the procedural rules of ADR organizations and, in general, about the options for seeking redress through ADR production.

As the European Commission will no longer support the ODR platform, it will be replaced by a digital tool that will guide users to their options for seeking redress.

4.      Protection of vulnerable consumers in digital markets

With the new regulations, consumers will be able to submit complaints with attached documents online in a traceable way, as well as access documents on demand in a non-digital way. The proposal includes a requirement to use digital ADR procedures in an easy and accessible way.

In this aspect, NAIS ADR Center has always met this requirement, since its establishment. In our online-based system, any consumer can file a complaint against a trader from anywhere, anytime. Accordingly, all parties can participate in the dispute resolution remotely, through convenient chat screens, without the obligation to do so at the same time. In order to keep up to date with the progress of the procedure, each party receives automated notifications from the system whenever there is a change or a new event in the chat.

5.      More user-friendly and transparent ADR procedures

With the new changes, the participants in an ODR procedure will have the right to request the outcome of it to be reviewed by a natural person, in case automated processes or artificial intelligence are used.

Also, it will now be possible for the ADR entities to bind cases with similar elements, and the consumer should be informed of this option, as well as having the option to refuse such binding.

6.      Rationalized reporting requirements for ADR entities 

Currently, ADR authorities are required to publish detailed annual and biennial reports on their activities. With the new changes, only the biennial reports will remain as an obligation, and they will be able to be shorter, less detailed. Also, the requirements for submitting information during notification have been reduced.

7.      New recommendation to online marketplaces and EU trade associations providing dispute resolution systems

As some online marketplaces develop their own alternative dispute resolution systems, the Commission recommends that they comply with the legislation and meet the ADR criteria set out in the Directive. If they use automated dispute resolution processes, they must make this clear to the participants in the procedure and give them the right to have the outcome of the procedure reviewed by a natural person. Also, these in-house ADR/ORS centers must prepare a regular self-assessment report at least every 2 years on how the quality criteria of the Directive have been implemented.

To follow the publications regarding the revision of the ADR Directive 2013/11/EU, follow the News on nais.bg