Directive 2013/11/EU on Alternative Consumer Dispute Resolution
- THE PURPOSE OF THE DIRECTIVE
Directive 2013/11/ΕU, issued on the 21st of May 2013, on Alternative Consumer Dispute Resolution and amending Regulation (EC) 2006/2004 and Directive 2009/22/ΕC («the Directive») aims to contribute towards achieving a high level of protection for consumers and the operation of the internal market by ensuring that consumers may, if they choose to, submit a complaint against a trader to entities providing independent, impartial, transparent, effective, expedient and fair alternative dispute resolution procedures.
This Directive is considered as having a low harmonisation level, as it does not affect national law that imposes obligations to participate in alternative dispute resolution procedures (see Article 1).
According to Article 3, the Directive applies to out of court resolution procedures of national or cross-border disputes, regarding contractual obligations arising from agreements for the sale of goods or the provision of services between a trader situated in the EU and a consumer residing in the EU, through the assistance of an Alternative Dispute Resolution Entity («ADR Entity»), who proposes or imposes a solution or brings the parties into contact to facilitate an amicable resolution of the dispute. The Directive also specifies certain criteria for an entity to be recognised as an ADR Entity, as well as ADR procedures, but provides Member States freedom to legislate rules providing a higher level of protection for consumers.
The Directive does not apply to certain procedures, such as procedures instigated by a trader against a consumer. According to Article 2(2) the Directive does not apply to the following:
a) procedures before dispute resolution entities where the natural persons in charge of dispute resolution are employed or remunerated exclusively by the individual trader, unless Member States decide to allow such procedures as ADR procedures under this Directive and the requirements set out in Chapter II, including the specific requirements of independence and transparency set out in Article 6(3), are met;
b) procedures before consumer complaint-handling systems operated by the trader;
c) non-economic services of general interest;
d) disputes between traders;
e) direct negotiations between a consumer and a trader;
f) attempts made by a judge to settle a dispute in the course of a judicial proceeding concerning that dispute;
g) procedures initiated by a trader against a consumer;
h) health services provided by health professionals to patients to assess, maintain or restore their state of health, including the prescription, dispensation and provision of medicinal products and medical devices;
i) public providers of further or higher education.
According to Article 3, the Directive supersedes other Directives on out for court dispute resolution proceedings instigated by a consumer against a trader.
In case C-75/16 it was mentioned that for the Directive to apply, all the following criteria must be satisfied:
«…firstly, the procedure must have been instigated by a consumer against a trader regarding the contractual obligations arising from contracts for the sale of goods or provision of services, secondly the procedure must meet the criteria of the Directive and therefore must be independent, impartial, transparent, effective, expedient and fair, thirdly the procedure must be handled by an ADR Entity, meaning an entity, however it may be named, which has been established on a permanent basis, offering dispute resolution services through an ADR procedure and has been listed according to Article 20(2) of the Directive, and the relevant list has been notified to the European Commission. »
- ESSENTIAL PROVISIONS/OBLIGATIONS OF MEMBER STATES
The essential provisions of the Directive refer to the obligations of Member States regarding ADR procedures, the duties and qualifications of ADR Entities, the persons responsible for ADR, as well as the traders in relation to the ADR procedure.
Specifically, Article 5 refers to the obligation of Member States to facilitate consumers’ access to ADR procedures and to ensure that disputes covered by the Directive and refered to a trader situated within the Member State can be referred to an ADR Entity. It also refers to the conditions that an ADR Entity must satisfy. Member States may also allow for ADR Entities to maintain or put in place procedural rules that give them the ability to refuse to examine a specific complaint for certain reasons (such as frivolous or vexatious complaints).
According to Article 6, Member States must ensure that the natural persons responsible for ADR have the necessary expertise, independence and impartiality. They must also ensure that ADR Entities have put in place procedures, where circumstances arise that may affect the independence or impartiality of the person responsible for the ADR procedure, that person is replaced or abstains from the ADR procedure, or the circumstances are notified to the parties and the person may continue to be responsible for the ADR procedure provided that the parties have not objected to it, having been informed of the situation and of their right to object. The same Article specifies certain criteria to be satisfied by natural persons.
According to Article 7, Member States must ensure the transparency of ADR Entities, i.e. that they publish specific information on their website. Furthermore, they must ensure that upon request, ADR Entities publish annual reports of their activities.
Article 8 refers to the obligation of Member States to ensure that ADR Entities are effective and that they meet certain criteria (i.e. that the procedure is available and easily accessible to both parties and is provided to the consumer free or at a minimum charge). It is also important to note that the result of the procedure is notified to the parties within 90 days of receiving the complete file for the complaint.
Article 9 refers to the obligation of Member States to ensure that in ADR procedures there is equal treatment of both parties. Meaning that the parties have the opportunity to express their positions, that it is not necessary to use a lawyer or a legal advisor and that the outcome of the procedure and the reasoning is notified to both the parties. Furthermore, where a solution is proposed, Member STATES ensure that the parties have a right to withdraw from the procedure and they have a right not to accept the proposed solution.
National Law may not in any way limit the right of a consumer to withdraw from mediation proceedings. In case C-75/16 from example, where under National Law the consumer was permitted to withdraw from mediation proceedings only upon providing reasonable cause, it was deemed that the National Law was incompatible with the Directive. However, if National Law obligates a consumer to participate in mediation proceedings (unless providing reasonable cause not to do so) but provides a right to withdraw unconditionally after the first meeting with the mediator, then the National Law is not deemed to be incompatible with the Directive.
Furthermore, National Law on mediation procedures, may not specify that a consumer must be represented by a lawyer.
According to Article 10, Member States must ensure that an agreement between a trader and a consumer to submit a complaint to an ADR Entity is not binding on the consumer if such an agreement is made before the dispute has arisen and if as a result the consumer is deprived of the right to apply to the court for resolution of the dispute.
It is also important to note that where according to the ADR procedure a solution is imposed, then Member States must ensure that the solution is binding on the parties only if they had previously been informed and have explicitly accepted for the decision to be binding. No such acceptance is necessary in respect of the trader, if National Law specifies that such decisions are binding on traders. However, this does not override the non – compulsory nature of ADR. In cases where the parties have agreed for the solution to be binding, the consumer may not exercise its rights under Article 9 of the Directive.
According to Article 11, Member States must ensure that in ADR procedures where a solution is imposed on the consumer, this is permissible only if the following criteria are satisfied:
«a) in a situation where there is no conflict of laws, the solution imposed shall not 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 of the Member State where the consumer and the trader are habitually resident;
b) in a situation involving a conflict of laws, where the law applicable to the sales or service contract is determined in accordance with Article 6(1) and (2) of Regulation (EC) No 593/2008, the solution imposed by the ADR entity shall not 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 of the Member State in which he is habitually resident;
c) in a situation involving a conflict of laws, where the law applicable to the sales or service contract is determined in accordance with Article 5(1) to (3) of the Rome Convention of 19 June 1980 on the law applicable to contractual obligations, the solution imposed by the ADR entity shall not result in the consumer being deprived of the protection afforded to him by the mandatory rules of the law of the Member State in which he is habitually resident.»
Regarding the deadlines for limitation of actions, Member States must ensure that in procedures where the outcome is not binding, the limitation period is suspended.
Chapter ΙΙΙ refers to the information and cooperation that Member States must ensure between traders and consumers. Specifically, Article 13 states that Member States must ensure that traders situated within the Member State, inform consumers of the ADR Entity or entities by which they are covered.
Most importantly Article 13(3) states that:
« Member States must ensure that, when a dispute between a consumer and a trader situated in the Member State cannot be resolved by submitting a complaint directly to the trader, the trader provides the consumer the information mentioned in paragraph 1, clarifying if the trader will make use of the relevant ADR Entities to resolve the dispute. This information is provided in writing or by any other permanent means. »
Therefore, where the consumer submits a complaint which the Trader cannot resolve, the trader must inform the consumer of the ADR Entity or entities by which it is covered, as well as the website address of the ADR Entity or Entities covering the Trader.
Article 14 refers to the obligation of Member States to ensure that in cross-border contracts, consumers can receive assistance in accessing an ADR Entity operating in another Member State. This responsibility lies with the centres belonging to the Network of European Consumer Centres, consumer organisations or any other entity.
According to Article 14, Member States are also responsible for publishing various general information (such as the names and websites of ADR Entities). Also Member States must ensure that information regarding consumer access to ADR procedures, is properly disseminated and encourage consumer organisations and professional bodies, on an EU as well as national level, to promote ADR Entities and their procedures and to promote the use of ADR by professionals as well as consumers.
According to Article 16, Member States must ensure that ADR Entities cooperate in resolving cross -border disputes and that they frequently exchange best practices regarding the resolution of cross-border and national disputes.
Article 18 states that each Member State must define a competent authority, which will:
- Collect information from ADR Entities (such as the name, procedural rules, fees imposed, the average duration of dispute resolution proceedings etc.) ,
- Assess whether an entity can be considered as an ADR Entity within the ambit of the Directive and if the entity meets the requirements of the Directive. Then, on the basis of the evaluation, prepare a list of all ADR Entities which includes information such as contact details, fees imposed, the language used, the types of disputes etc. Every competent authority shall publish on its website the list of ADR Entities mentioned in Article 20(4) providing a link to the website of the European Commission.
According to Article 21 of the Directive, Member States must set our rules regarding sanctions imposed in relation to infringements of the national provisions. Specific reference is made to Article 13 of the Directive, which refers to the obligation of traders to inform consumers regarding the ADR Entity or Entities by which they are covered. These sanctions must be effective, proportional and deterrent.
The above information does not constitute legal advice.