Council and European Parliament have reached a provisional agreement to update, simplify and facilitate the existing alternative dispute resolution (ADR) framework. The chief aim is to make these procedures more accessible and better suited to the digital age. Out-of-court procedures help resolve disputes between consumers and traders, typically with the help of a neutral third party.
The agreement introduces deadlines for companies to respond to ADR bodies regarding specific cases and promotes stronger cooperation between ADR entities and consumer protection authorities. It clarifies how automated systems – such as artificial intelligence, machine translation and other IT solutions – should be used to make ADR procedures more efficient, especially in cross-border cases.
Inside the EU (including cross-border) the agreement keeps the scope of the ADR directive to disputes stemming from a contract, including precontractual obligations (e.g. advertising, information provision). The agreement extends the scope to disputes between a consumer resident in a member state and a trader in a third country that direct their activities to that member state, if both agree to use to the ADR procedure.
At the moment the agreement is provisional and subject to final adoption by both institutions.
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Duty to reply within 20 days
When a trader is contacted by an ADR entity about a commercial dispute, it will have 20 days to reply (or 30 in exceptional or very complex circumstances). If there is no reply after this period, the ADR entity may presume that the trader has refused to participate, close the case and inform the consumer accordingly.
Efficient and accessible methods for resolving disputes outside the courtroom have already shown their potential in simplifying and speeding up the process for both consumers and businesses – Krzysztof Paszyk, Polish Minister for Development and Technology
Member states will be required to adopt measures to promote the use of ADR. These incentives may include financial tools (such as reduced fees for compliant traders, free participation for businesses, or reimbursement of costs for a set number of cases) as well as non-financial incentives like public awareness campaigns or certification for participating businesses.
Air transport and tourism in focus
When establishing measures to promote participation in ADR among both companies and consumers, member states are encouraged to pay particular attention to specific business sectors. These typically include sectors with low participation in ADR procedures or with a high number of consumer complaints like air transport or tourism.
The Commission will create a user-friendly and free-of-charge digital tool that provides general information on consumer redress. This new tool will include practical guidance on using ADR in a cross-border context, as well as links to ADR entities and information on consumer rights.
