Transcript Out-of-court resolution of consumer disputes l

Seminar
Out-of-court resolution of
consumer disputes
Sava Centar, Belgrade, 26-27 June 2013
Dr Christine Riefa
Consumer law is only as good as its
enforcement
• Consumer law strengthened in the EU in past
decade
• However, when rights are not respected
European consumers do not always obtain
effective redress
– Court proceedings expensive, time-consuming,
burdensome
– Uncertain outcome
– Consumers not always aware of their rights in the first
place
Cost of lack of adequate enforcement
mechanisms
• Substantial proportion of consumers
encounter problems when buying goods and
services (1 in 5). Yet, despite strong laws,
problems remain unresolved
– Losses incurred by European consumers because
of unresolved problems is estimated at 0.4% of EU
GDP.
– Cross border shopping detriment to consumer
estimated between €500 million and €1 billion.
ADR and access to justice
• Access to Justice is a human right in Europe
– Access to justice and fair trial are guaranteed under Article
6 of the European Convention on Human Rights
– Article 47 Charter of Fundamental Rights of the EU
provides for the right to an effective remedy and to a fair
trial.
• Access to justice is an international preoccupation
– UNCITRAL (UN Commission for International Trade Law) is
developing procedural rules on ODR
– OECD report from 2006 highlight importance of crossborder dispute resolution mechanisms.
Consumer dispute resolution
landscape
Public
enforcement
undertakings
Criminal
Courts
Private Enforcement
Civil Courts
Small claims
Other Civil
Courts
Out-of-court
Tribunals
ADR
ODR
Historical background to ADR/ODR
legislation
2001
1998
1998
Communication on out-ofcourt settlement of
disputes
Recommendation on the
principles applicable to
out-of-court settlement
2001
Recommendation on the
principles for out-of-court
bodies involved in
consensual resolution
EEJ-Net (ECC-Net from
2005) + consumer claim
form to facilitate access to
ADR
FIN-Net (50 ADR schemes
in financial services)
Historical background to ADR/ODR
legislation
2002
Green Paper on
Consumer ADR
launched
2004
2007
2009
Voluntary
European Code
of conduct for
Mediators
Study on
Consumer ADR
and Comparative
report
ADR Study
analysing use of
ADR schemes in
EU
2007
European
Small Claims
Procedure
2008
Mediation
Directive
Historical background to ADR/ODR
legislation
2011 Communication of 13
April from the Commission
Legislation on ADR (with ecommerce dimension) is
one of 12 levers to boost
growth and strengthen
confidence in Single Market
2011
Proposal for a Directive on
ADR + Proposal for a
Regulation on ODR
Resolution of March 12
2013 to adopt Directive and
Regulation at first reading –
Awaiting Parliament’s vote
Main features of Directive on ADR for
consumer disputes
Goals?
What
disputes?
How is ADR
delivered?
An ADR Directive – what for?
• Achieve a high level of consumer protection
• Voluntary basis
– National legislation can impose mandatory
participation
– But not a substitute to courts, but a viable alternative
• Harmonises quality requirements for ADR entities
and ADR procedures in order to ensure that
Consumers have access to high quality,
transparent, effective, fair out-of-court redress
mechanisms
Types of disputes subject to ADR
Directive
People
Geography
Contracts
Consumer
National
disputes
Sales
trader
Cross-border
(2 legs only)
Services
Types of ADR solutions subject to
ADR Directive
Types of disputes
Organisation
• Not Procedures before consumer
complaints handling systems operated by
trader or direct negotiation between
Trader and Consumer
• Not disputes between Traders or
procedures initiated by Traders against
Consumers (unless allowed by National
law)
• Not procedures initiated in course of
judicial proceedings
• Binding/ non-binding
• Public/ private funding
• Sectorial/ general competence
• Not health services
• Not public providers of further or higher
education
• Exceptions: Art 2 (2)
• ADR person employed or remunerated
by trader (MS can allow)
Obligations of Member States –
facilitation & control of delivery
• Ensure availability of ADR entities
– Sectorial
– General
• Control information to consumers about ADR entities
– Website information + durable medium, complaint forms,
protection of personal data
• Discretion in disputes submitted to ADR
– Can allow introduction of procedural rules allowing to
refuse to deal with a dispute
– Can allow setting of monetary thresholds
– but not in way which significantly impair consumer access
Six main principles applicable to ADR
Independence
and
impartiality
Legality
Transparency
Effectiveness
Liberty
Fairness
Independence and impartiality
• Appoint persons with necessary expertise, independence and
impartiality
–
–
–
–
–
Knowledge and skills of consumer disputes and general understanding of the law
Term of office of sufficient duration to ensure independence
Not subject to instructions from parties
Remuneration not linked to outcome of case
Disclosure of conflicts of interest (unless ADR entity = only one natural person) –
appropriate action taken if conflict of interest exists
• Procedures where natural person is employed or remunerated
exclusively by Trader
–
–
–
–
Collegial body
Period of office of minimum 3 years
No work for paying entity or affiliation for 3 years after
Clear separation between ADR entity and Trader paying – budget independence
Transparency
Consumer information
Annual activity reports
Available on website or
durable medium (upon
request) or by any other
means considered
appropriate
Transparency – consumer information
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
Contact details
Compliance with Art 20(2) – notified and fulfilling criteria
Person in charge of ADR, method of appointment and length of mandate
Expertise , impartiality and independence if employed or remunerated by trader
Membership in ADR network for cross-border disputes
Type of disputes (including thresholds if applicable)
Procedural rules
Languages
Rules used for dispute resolution
Requirement to resolve issue amicably
Withdrawal from procedure
Costs
Average length of procedure
Legal effect of the outcome (binding / non-binding)
Enforceability
Transparency – Annual activity
reports
• Number of disputes & types of complaints
• Any systematic or significant problems that occur frequently and
lead to disputes between C and T (can include recommendations)
• Rate of disputes ADR entity refused to deal with and % of types of
grounds for refusal
• Analysis for disputes resolved with ADR entity employed or
remunerated by Trader
• % of discontinued ADR procedures
• Average time for dispute resolution
• Rate of compliance with ADR decisions (if known)
• Cooperation of ADR entities within networks for cross-border
disputes (if applicable).
Effectiveness
Availability
• Ease of access
• Free of charge or
nominal fee only
• 90 days maximum
No need for
lawyer
• But independent
advice available
Effectiveness
Fairness
Argument, evidence,
documents, expert
opinions
Notification of
outcomes and grounds
on which outcome is
based communicated
No need for lawyer but
able to seek
independent advice or
be represented at any
stage
Fairness in non-binding ADR
• Ability to withdraw from procedure at any stage
• Before agreeing to ADR solution, information
about:
–
–
–
–
Choice of agreeing or following proposed solution
ADR solution does not preclude court proceedings
Court decision may lead to different outcome
Legal effects of the ADR solution
• Time to reflect before agreeing to ADR solution
• Prescription period extended to include ADR
procedure (Art 12).
Liberty
Pre-dispute
clauses in
contracts =
NON
BINDING
(unfair term)
Post-dispute
agreement is
only binding
if parties
informed of
binding
nature in
advance
Legality in binding ADR
• No solutions imposed by an ADR entity shall
result in the Consumer being deprived of the
protection afforded to him by the provisions
that cannot be derogated from by agreement
by virtue of the law where the consumer is
habitually resident.
Framework for effective ADR
6 principles for
ADR
Consumer
information
Cooperation
Role of
competent
authorities
Consumer Information
• Consumers needs to know ADR exist to use it – wide
dissemination strategy adopted
• Obligation on traders to inform consumers about ADR
entity (ies) that cover them when trader committed or
obliged to commit to ADR
– Information in clear and comprehensible manner
• Assistance for consumers in cross-border disputes (ECC-Net
centre or other body)
• List of ADR entities well publicised by ADR entities, ECC-Net
and other bodies, encourage consumer associations, trade
associations to disseminate
• Information about how to access ADR
Cooperation
• To improve provision, cooperation and
exchanges between ADR entities enshrined in
the Directive
• Cooperation between ADR entities and
national enforcement authorities also
essential (including information exchange)
Role of competent authorities
• Each MS designates at least one competent authority
– When multiple authorities, designate one single point of contact
• Information to be notified to competent authority
– Key info about ADR entity (including reasoned statement on why
entity qualifies and complies with quality requirements)
• Role of competent authority
– Assess if ADR entity qualifies and fulfils all quality requirements
– List all ADR entities notified and fulfilling the conditions & makes list
public
– Notifies list to the EU Commission
– Ensures compliance of ADR entities and acts if one no longer fulfil the
requirements
– Reports every 4 years on development and functioning of ADR entities
ADR in practice
ADR in Europe
today
Case Studies
Key
recommendations
ADR in Europe today
• 750 ADR systems in place for the resolution of
consumer disputes
• 95 consumer ADR systems in the UK
• Significant increase in last 5 years
• Gaps in coverage subsist (ADR Directive seeks to
address them)
• Awareness of ADR amongst consumers and
traders is low
Main models of ADR in Europe
Trade
association /
code of
practice
Independent
decision
making
bodies
Public Regulation
bodies
Sequencing of dispute resolution
pathways
Recommendation
or Decision
Mediation/ conciliation
technique
Direct negotiation
Case study – consumer ADR in the UK
• Consumer ADR highly developed in the UK
• Squatter of ADR models (no uniform model)
• Mostly sectorial ADR (95 schemes across 35
sectors)
• Main challenges:
– Variability
– Visibility
Case study – Consumer ADR in the
Netherlands
• Unified system and well-established structure
– The Consumer Complaint Commission
– ADR processes overseen by Independent
Foundation of Complaint Commissions
• High visibility
• Sectorial variations
• Separate structure for Financial services
(KiFiD)
ADR mix in the UK
Code of
Conduct
ADR
• CEDR Dispute
Group
• Ombudsman
Services
• Travel ABTA Code &
Scheme
• OFT Consumer Code
Approval Scheme (11
schemes from motor
vehicles to carpets! )
Private
Ombudsmen
Statutory
Sectorial
Ombudsmen
• FOS (Financial
Ombudsman
Service)
• Legal
Ombudsman
Financial Ombudsman Service
http://www.financial-ombudsman.org.uk
• 1. Complain to bank, insurance company or finance
firm
– 8 weeks to react
– FOS can help by contacting business for the consumer and
present their complaint
• 2. Ask FOS to look at unresolved complaint
– Fill in complaint form
– Call to get assistance with filling in the form
• 3. FOS deals with complaint – investigation to decision
Financial Ombudsman Service
http://www.financial-ombudsman.org.uk
• Funding?
– Not government funded
– Levy on industry required by law (from £100 to
£30,000 depending on size of firm)
– Case fees paid for by traders
• Compliance with 6 principles?
– Independence guaranteed (necessary as paid by
trader)
Case Study – consumer ADR in
Slovenia
• Limited arrangements for consumer ADR
• Some mediation in business sectors as well as
general consumer arrangements
• Some court driven initiatives (small claims and
mediation)
• Main challenges:
– Critical mass (small population)
– Problems of cost and duration
Any questions?
[email protected]
Key bibliography
• Christopher Hodges, Current discussions on
consumer redress: collective redress and ADR,
ERA Forum (2012) 13:11-33.
• Hodges, Benöhr, Creutzfeldt-Banda, Consumer
ADR in Europe, Civil Justice Systems, Hart, Beck,
Nomos 2012.
• Cortes, Online Dispute resolution for consumers
in the European Union, Routledge 2011.