The new ODR platform of the EU Commission: a challenging opportunity for consumers and traders

On 15 February 2016 the European Commission opened its new Online Dispute Resolution (ODR) platform to consumers and traders, which should allow them to settle their disputes arisen on domestic and cross-border online transactions (hyperlink:http://ec.europa.eu/odr).

The explicit aim of the Commission, as expressed in the 2013/11/EU Directive on alternative dispute resolution for consumer disputes, is to remove any direct and indirect obstacle to the proper functioning of the internal market, seeking a higher consumer protection.

According to the Commission’s opinion, consumers’ confidence in the market can be boosted by giving access to simple, efficient and low-cost mechanisms whereby consumers and traders of different Member States may settle their disputes  (except for some specific matters expressly excluded from the scope of the Directive).

The Commission states that Alternative Dispute Resolution (ADR) should be available for all types of domestic and cross-border disputes and Member States should facilitate the access of the consumers to these procedures.

Moreover, ADR procedures should comply with specific quality requirements consistent with all EU Member States’ legal system. In effect, the lack of quality of ADR procedures, which is common in some Member States, may discourage consumers to cross-border shopping and traders to market in other Member States.

EU governments shall make sure that ADR entities will settle disputes in a fair, practical and proportionate manner for both consumers and traders. Hence, independence and integrity, together with the necessary expertise of ADR entities is fundamental.

Another major point is that consumers and traders should be aware of the existence of such procedures, which should be easily accessible. Consumers should be able to quickly identify the competent ADR entity and to know if the trader involved will participate in ADR proceedings. Therefore, traders should provide on their websites all necessary information about the ADR entity or entities by which they are covered. This information should also be included in the relevant terms and conditions of the trader.

Otherwise, in a perspective of full transparency, ADR entities should make available on their websites, or by any other appropriate mediums, clear information about their contact details, the physical person in charge of ADR and other related data (way of appointment, duration of the mandate, expertise, impartiality, independence), the procedural rules governing the resolution of a dispute and the grounds on which the entity may refuse to deal with a specific dispute, the languages in which complaints can be submitted, the laws regulating the dispute resolution, any preliminary requirements the parties may need, the possibility of withdraw from the procedure, the costs for the parties, the average length of the procedure and the legal effect of the final decision.

By the following Regulation of the European Parliament and of the Council n. 524/2013 on online dispute resolution for consumer disputes, the availability of reliable and efficient online dispute resolution (ODR) is indicated as a mean whereby the said objectives may be achieved, considered the increasing importance of the digital dimension of the internal market.

The Regulation applies to the out-of-court resolution of disputes arising from online transactions initiated (i) by consumers resident in the EU against traders established in the EU which are covered by Directive 2013/11/EU, and (ii) by traders against consumers where the relevant ADR entities allow traders to submit this kind of complaints. Moreover, in order to regulate the whole sector, the said Regulation shall also apply to domestic online transactions.

Then, some practical rules are specified: having contacted the trader with the aim of resolving the dispute amicably without success, the consumer can submit his complaint to an ADR through the ODR platform, which offers a single point of entry to consumers and traders seeking to solve their disputes.

The Regulation expressly requires traders and online market-places, i.e. online platforms which allow traders to make their services and products available to consumers, to provide on their websites an easily accessible electronic link to the ODR platform and their email address so that consumers have a first point of contact. Even if they are committed or obliged to use one or more ADR entities to resolve disputes with consumers, they should inform them about the existence of the ODR platform and the possibility to use it for their disputes. This kind of information shall also be provided in the general terms and conditions applicable to online sales and service contracts.

Once a complaint has been filed, it can be processed and transmitted to the respondent party with some information on the further steps to be taken and, namely, the invitation of the trader to state within 10 days calendar whether or not it commits to, or it’s obliged to use, a specific ADR entity and, unless the trader is obliged to use a specific ADR entity, whether it is willing to use any ADR entity from those referred to in the electronic complaint form or identified by the ODR platform on the basis of the information provided in that form. If the respondent party is a consumer and the trader is obliged to use a specific ADR entity, the communication should include an invitation to agree within 10 days on that or, in the case that the trader is not obliged to use a specific ADR entity, an invitation to select one or more ADR entities from those referred to in the said procedure.

Then, the ODR platform shall communicate to the complaint party all the information about the selected ADR entity and an invitation to agree within 10 calendar days on an ADR entity, and later shall automatically transmit the complaint to the ADR entity that the parties have agreed to use.

It should be noted that if the parties fail to agree on an ADR entity or this one refuses to deal with the dispute, the complaint shall not be processed further.

Finally, the Commission adopted an implementing regulation (2015/1051 of 1 July 2015) to point out the modalities for the exercise of the functions of the ODR platform, the modalities of the electronic complaint form and on the modalities of the cooperation between the contact points designed in each Member State as required by the Regulation n. 524/2013.

Now, it will take a certain period of time to establish whether the ODR platform will effectively be useful “to dismantle existing barriers and to boost consumer confidence”, and this will depends in a significant part on how much consumers will count on this mean to resolve their disputes and on the effective use they will make of it.

Moreover, traders should prepare themselves to deal with an increasing number of ADR proceedings, which will entail a challenging improvement of structure and resources they shall be ready for.

If consumers will have the perception that a new instrument, quicker and cheaper than suing in national courts, it is available to solve dispute with traders, they will probably achieve greater confidence in cross-border online transactions, and commercial transaction will potentially increase.