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EU Online Dispute Resolution Is Approved

by Ulrika Lomas,, Brussels

14 March 2013

The European Commissioner for Health and Consumer Policy, Tonio Borg, has welcomed the positive vote on Alternative Dispute Resolution (ADR) and Online Dispute Resolution (ODR) in the European Parliament (EP) on March 12, 2013.

The EP vote confirms the agreement on two proposals put forward by the European Commission (EC) in 2011. As one of the components of the Digital Agenda for Europe, European Union (EU) member states will have two years - up to mid-2015 - to implement the ADR/ODR rules, with the ODR platform being operational six months thereafter - at the end of 2015.

Borg said: "Today, the EP confirmed its agreement on two key proposals for boosting growth in the Single Market and strengthening the digital economy. ADR and ODR are a win-win for consumers, who will be able to resolve their disputes out-of-court in a simple, fast and low-cost manner, and also for traders who will be able to keep good relations with customers and avoid litigation costs.”

The rules on ADR will ensure that consumers can turn to quality alternative dispute resolution entities for all kinds of contractual disputes that they have with traders; no matter what they purchased and whether they purchased it online or offline, domestically or across borders. The rules will operate in all member states and in all sectors, with the exception of health and higher education.

According to the ODR Regulation, an EU-wide online platform will be set up for handling consumer disputes that arise from online transactions. The platform will link all the national ADR entities and operate in all official EU languages.

Raising consumers' awareness is another pillar of the legislation, as traders will need to provide consumers with adequate information on ADR and ODR on their websites and in their general terms and conditions.

It has been pointed out that there are, currently, over 750 ADR entities in the EU. They work differently and have different names, for example, arbitration, mediation, ombudsmen and complaints boards. In some countries, they only cover specific consumer disputes, for example, for financial services, energy supply and transport. In a few countries, ADR covers all consumer disputes, and some others offer the entire process online.

It has been estimated that universal access to quality ADR across the EU would save consumers around EUR22.5bn (USD29.3bn) annually. The cost of unresolved consumer disputes was estimated at 0.4% of the EU's gross domestic product in 2010. That figure only includes direct financial savings, and does not account for less tangible factors which are also said to be important for a well-functioning market, such as increased confidence, trust, customer relations and business reputation.

In addition, the ODR regulation will create a EU-wide online platform, providing consumers and businesses with a single point of entry for resolving on-line the disputes concerning purchases made on-line in another EU-country. This single European point of entry will automatically send the consumer’s complaint to the competent national ADR entity, and facilitate the resolution of the dispute within 90 days.

Within the new laws, consumers will therefore have access to an effective and inexpensive way of solving their disputes with traders, regardless of the goods or services that they buy, however they buy (online or offline), and wherever they buy in the EU (in their country or abroad), and consumers buying online from other EU countries will be able to solve their contractual disputes with EU traders entirely online.

TAGS: individuals | compliance | business | European Commission | commerce | law | internet | e-commerce | legislation | standards | regulation | European Union (EU) | services | Europe

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