Firms should be taking urgent steps to comply with the new rules around the EU's ODR platform, which come into force shortly, to promote and facilitate online dispute resolution.

The ODR platform is an interactive website provided by the European Commission offering a single point of entry to consumers and traders seeking to resolve disputes out-of-court which arise from online sales and service contracts, irrespective of whether they are cross-border. For UK firms, complaints over financial services will be referred to the Financial Ombudsman Service.

The ODR platform complements, and is in addition to, the alternative dispute resolution (ADR) requirements that came into force in 2015. Strictly speaking, the rules for the ODR platform came into force on 9 January 2016, but the European Commission has delayed the start date until 15 February 2016 to allow some Member States extra time for implementation.

Which firms are affected?

The ODR platform rules apply to business to consumer contracts. Moreover, unlike the ADR requirements, they are only relevant to an "online trader", which includes any trader who offers goods or services on a website, or by other electronic means (i.e. email). Firms will need to consider carefully which customers and products are caught by these rules.

The specific obligations are in the Alternative Dispute Resolution for Consumer Disputes (Competent Authorities and Information) Regulations 2015 (SI 2015/542) as amended by SI 2015/1392 and SI 2015/1972, where PRA/FCA authorised firms must:

  1. provide a link on their website to the ODR platform ( and state an email address for the purpose of dealing with complaints (this can either be an individual's email address or a shared mailbox which has been set up to deal with complaints); and
  2. provide a link to the ODR platform in any "offer" made to consumers by email (nb: offers made using other digital means such as social media are not in scope) and to tell consumers about the existence of the ODR platform and its purpose to resolve disputes. As well as providing this information in emails sent to consumers, firms will also have to include it in their terms and conditions (Ts&Cs) applicable to online sales and service contracts.

Points to note

Offer - the word "offer" is not defined for the purposes of the Regulations, nor does the guidance issued by the Department for Business Innovation & Skills offer much help. In our view, an offer must mean a step further than just a financial promotion. For example, it might be argued that it is the last communication with a customer before they enter into an agreement (e.g. an email including a link and telling the customer to click here to enter into an agreement).

Ts&Cs - the requirement to include the information in (2) above, in Ts&Cs, concerns the "general conditions of online sales or service contracts". "Online service contracts" are defined as "a service contract where the trader, or the trader's intermediary, has offered services on a website or by other electronic means and the consumer has ordered such services on that website or by other electronic means." Firms offering financial services will, therefore, arguably need to include the required information in the electronic Ts&Cs of each product that they enter into online (rather than in their general over-arching website or relationship conditions).


A contravention of the requirements for ADR would be enforced as a breach of the FCA's DISP rules. The FCA has an ample sanctions toolkit, including a fine or censure. The position is less clear over the ODR platform as there is no specific rule in DISP. However, a failure to comply might be sanctioned as a breach of the Principles for Businesses or as a systems and controls failing in SYSC.

As for wider  consumer law, contraventions of both the ADR and ODR requirements amount to "community infringements" under Part 8 of the Enterprise Act 2002. Various bodies, including the FCA, as designated enforcers could, after consultation with you, apply to court for an enforcement order, a breach of which, ultimately, might be punished as contempt of court. In practice, it is unlikely that the FCA (or any other body) would take steps unless it was clear that no effort was being made to comply and the most probable consequence would be reputational.