Benefits of Alternative Dispute Resolution for Businesses

The Alternative Dispute Resolution of Consumer Disputes Law of 2017 (L. 85(I)/2017) obliges Businesses to inform Consumers about the Alternative Dispute Resolution (ADR) or Entities from which they are covered in case there is a dispute with Consumers. In case a Business refuses or fails to do so, it is subjected to a fine by the Consumer Protection Service.

An Alternative Dispute Resolution Entity is an Entity which has been approved by the Consumer Protection Service and which has been established on a permanent basis, offers dispute resolution services through the ADR process and has been registered in the register of ADR Entities maintained by the Consumer Protection Service. One such Entity is the Cyprus Consumer Dispute Resolution Center (CCCADR).

The benefits of a Business belonging to an Alternative Dispute Resolution Entity are numerous and are explained below:

1) A Business which voluntarily becomes a member of an ADR Entity is more competitive than other Businesses as it provides a service that its competitors may not provide.Furthermore, the Consumer automatically considers such Businesses as being more serious and professional than others. This is because the consumer knows that in the event of a dispute, it will be resolved by an independent ADR Entity.

2) ADR procedures are faster than those of the Courts and their costs are much lower. Under the law, Alternative Dispute Resolution Entities must consider a Consumer Complaint within 90 days.

This means that a dispute between the Business and the Consumer is resolved quickly without the prolonged negative publicity that may be caused to the Business where it ignores the Consumer’s complaint or where it takes the dispute to the Court.

Also – and connected with the above -, in case a complaint remains unresolved, the chances of the Consumer reporting the Business to the Consumer Protection Service increase.

3) ADR procedures are conducted and completed in a private and confidential manner. This means that the Business’s reputation is not damaged (for example, through negative publicity). In fact, all parties are bound by confidentiality clauses during and after the ADR procedure.

4) ADR procedures are more flexible as they are agreed at a time and place convenient to the parties and it is not necessary to follow strict rules of procedure.

5) ADR procedures are more friendly and avoid direct conflicts between the parties compared to those of the Courts.

The Cyprus Consumer Center for Alternative Dispute Resolution (Cyprus Consumer Center for Alternative Dispute Resolution) is the ADR Entity which covers ALL disputes (except telecommunications and postal services).

This article is given for information purposes only and it does not constitute legal advice.

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