Today, the European Commission published a proposal to modernise the rules on consumer Alternative Dispute Resolution (ADR). Consumer ADR gives consumers and traders the possibility to solve their disputes out-of-court in a process which should be simple, fast, and affordable.

Despite some improvements, the proposal offers only limited changes to fix the structural problems – like lack of trader participation and in some countries, poor service quality – that have limited ADR’s take-up in Europe.

Ten years after the EU adopted its legal framework for ADR, evidence has shown it has not become a popular option in many European countries and is not working satisfactorily for consumers. Issues include a lack of independence of ADR bodies, low quality of service for consumers, and a lack of trader participation.

Against BEUC’s expectations, according to the proposal, traders’ participation in ADR procedures would still not be mandatory and regrettably nothing is proposed to strengthen the independence of ADR entities. On the positive side, traders would now have to reply within 20 days when contacted by an ADR entity so consumers would rapidly know whether the traders accept to participate in the procedure. The scope would also be extended to cover a wider range of disputes, such as consumer problems with geo-blocking, switching of providers (e.g., for energy/telecoms suppliers) or with roaming costs.

BEUC Deputy Director General Ursula Pachl said: “Resolving disputes out-of-court must be a simple, fast, and affordable option for consumers to settle an issue with a trader and get a remedy – for example, if a shop refuses to reimburse or fix a faulty washing machine. However, ADR is still under-developed in many countries, partly because traders aren’t obliged to participate and because consumers and traders are not sufficiently aware that it’s an option. Today’s proposal is insufficient. What we need to see now are improvements for a more ambitious reform. We trust the European legislators will deliver on this.”

Background:
Today’s proposal on consumer ADR was initially supposed to come as a ‘Consumer Enforcement Package’ with a proposal amending the Consumer Protection Cooperation Regulation (with better rules facilitating coordination between national consumer protection authorities to effectively enforce against cross-border infringements). The reform of this CPC Regulation is urgently needed. Regrettably, the Commission decided to postpone this proposal to an unknown date.

Consumer law suffers from a lack of enforcement, and we hope that at least the ADR proposal will be improved so that consumers can make better use of their rights, which today too often exist only on paper.