Attention traders! Is your business aware of the new ADR Directive?

PART 1

In part 1 of this two-part series, we examine the directive on alternative dispute resolution for consumer disputes (the “ADR Directive”).  In part 2 of this series we will examine the online dispute resolution regulations (the “ODR Regulations”).

The ADR Directive

Now transposed into Irish law, the purpose of the ADR Directive is to ensure that  consumers can, on a voluntary basis, submit complaints against traders to entities offering independent, fast and fair alternative dispute resolution procedures.

The ADR Directive provides for alternative dispute resolution of both domestic and cross-border consumer disputes.  These are, however, confined to sales and service contracts.

It provides for an “ADR entity” which shall propose or impose a solution or bring the parties together with the aim of facilitating an amicable solution.

The ADR Directive does not apply to:-

• disputes between traders; or
• direct negotiation between the consumer and the trader; or
• attempts made by a judge to settle a dispute in the course of a judicial proceeding concerning that dispute; or
• procedures initiated by a trader against a consumer.

Benefits

• Transparency
  Access to ADR entities is now intended to be easier than ever. Data on the types of disputes received and the time in which they are dealt with is now readily available from the Irish ADR Platform. The Irish ADR platform comes in the form of the European Consumer Centre Ireland (the “ECC Ireland”).  ECC Ireland is part of a European wide network of centres funded by the Competition and Consumer Protection Commission (the “CCPC”) (the designated competent authority under in Ireland for the purposes of the ADR Directive), the European Commission and member states to provide information and services to consumers.  ECC Ireland publishes annual reports and regular newsletters. A link to the list of the authorised ADR entities is available on the CCPC website, also accessible via ECC Ireland’s website.

• Effectiveness
  The ADR procedure is free of charge or available at a nominal fee.  The outcome of the ADR procedure is to be made available within a period of 90 calendar days from the date on which the ADR entity has received the complete complaint file.

• Fairness
  The parties have the possibility, within a reasonable period of time, of expressing their point of view, of being provided by the ADR entity with the arguments, evidence, documents and facts put forward by the other party as well as any statements made and opinions given by experts.  Parties are informed that they are not obliged to retain a legal advisor but that they may do so.  The parties are notified of the outcome in writing and are provided with a statement of the grounds on which the outcome is based.

• Choice
  Where ADR procedures impose a solution to a dispute, the solution imposed may be binding on the parties only if they were informed of its binding nature in advance and specifically accepted this.  Specific acceptance by the trader is not required if national rules provide that solutions are binding on traders.  In Ireland, any solution imposed is not binding unless the parties are informed in advance and have specifically accepted the binding nature of the solution.  As for the proposal of a solution, parties have the possibility of withdrawing from the procedure if dissatisfied with the performance or the operation of the procedure and they shall be informed of that right before the procedure commences.  However, where national rules provide for mandatory participation by the trader in such ADR procedures, the option to withdraw shall only be in favour of the consumer. In Ireland both parties have the possibility of withdrawing.

Conclusion

Change is no longer on the horizon. The ADR Directive as transposed into Irish law has established a new platform for consumer dispute resolution.  Both traders and consumers alike should familiarise themselves with this new regime.

For further information contact Elaine McGrath emcgrath@reddycharlton.ie

For information on the ODR Regulations, see Part 2 of this two-part consumer ADR series of articles.