ADR

ADR Directives

The ADR Directives and Regulations require that consumers must be able to submit complaints against traders to entities offering independent, impartial, transparent, fast and fairer alternative dispute resolution.  States must ensure the availability of ADR.  The Directive required that the procedural requirements in respect of ADR be made law by mid-2015.

The ADR Directive applies to disputes between consumers and traders in relation to contractual obligations arising from sale and services contracts.  It applies to domestic and cross-border disputes.  There must be an ADR entity which proposes a solution or brings the parties together with the aim of facilitating an amicable solution.

The consumer and trader must be resident in the EU. A consumer is a natural person acting for purposes outside his trade business or profession.  A trader is any corporate or natural person, public sector or private, acting for the purpose of a trade, business, craft or profession.

A trader is established where he has a place of business. In the case of a corporation, it is established at the place of its central administration or statutory seat or at any branch, agency or establishment form which the claim arises.


ADR Procedure

The relevant procedure must comply with Directive’s requirement and be undertaken by an ADR entity.  This entity, however, named or referred to, is to be established on a durable basis.  It must offer a resolution of the dispute through ADR. The ADR may be binding or non-binding. It is a matter for the state to determine whether or not ADR entities have powers to impose a resolution on the parties.

The ADR Directive does not affect existing national legislation which makes participation in ADR mandatory, provided that it does not prevent parties having recourse the court system.

The ADR directive does not apply to the following

  • non-economic services of general interest
  • disputes between traders;
  • procedures before consumer complaint handling systems operated by the trader
  • direct negotiations between the trader and consumer.

States Must Facilitate ADR

States must facilitate access by consumers to alternative dispute resolution procedures.  They must ensure that disputes within the scope of the EU Directive, may be submitted to an ADR entity, which complies with the Directive’s requirement.  ADR entities must deal with both domestic and cross-border disputes.

This requirement may be fulfilled by providing an omnibus ADR entity, which may deal with disputes not covered by other entities.  It may be fulfilled in some cases, by allowing the use of ADR entities established in another State or which operate on an EU wide, regional or other transnational basis.

ADR entities must maintain an up-to-date website which allows easy access to information about the ADR procedures.  They must provide information to the parties on request in a durable medium.  They must enable consumers to submit a complaint, online or off-line.  They must facilitate the exchange of information between parties electronically, or where appropriate, non-electronically.


Competent Body and Approval of ADR Entities

States must designate a competent authority to carry out the functions under the ADR Directive.  It must notify the Commission accordingly.  The Commission is to publish States’ competent authorities in the Official Journal.

Dispute resolution entities which seek to qualify as ADR entities must notify the competent authority and provide the requisite information to them.  The competent authority must assess whether they meet the requirements of the Directive and any additional national requirements.  They must provide and maintain a list of qualifying ADR entities and notify them to the Commission. The States’ list must be consolidated and published by the Commission.


State Discretion and Decision on Type of ADR

States are free to determine the type of ADR they provide or facilitate.  They may determine whether participation in ADR procedures is mandatory.

States may provide procedural requirements.  They must ensure that the relevant standards are met. The standards include

  • requirements that the person in charge of the ADR process must have the requisite knowledge and skills in the field of ADR and must have a general understanding of the law;
  • they must be appointed for a term of office of sufficient duration and be independent;
  • they must not be subject to instructions from either party or their representatives;
  • they must be remunerated in ways that are decoupled from the outcome of the procedure;
  • they must be obliged to disclose conflicts of interest;
  • a replacement must be appointed in the event of a conflict of interest.

ADR Exceptions

The ADR Directive is not applicable to

  • procedures under consumer complaints systems operated by the traders;
  • non-economic services of a general nature, disputes between traders;
  • procedures initiated by a trader against a consumer;
  • direct negotiations between consumers and traders;
  • attempts to settle the dispute in the course of judicial proceedings by the court;
  • health services provided by health professionals to patients to assess, maintain and restore their state of health; and
  • public providers of further and higher education.

The Directive is not applicable to procedures where the persons who are in charge of resolution are in the employment of and are remunerated by the trader exclusively.  States may permit such procedures to be made subject to the Directive, provided that the Directive’s requirements in respect of transparency and independence are fulfilled.


Permitted Refusal of ADR

The Directive allows ADR entities to have procedural rules, which permit refusal of disputes on the following grounds:

  • that the consumer did not attempt to contact the trader, as a prior step with a view to resolving the dispute;
  • that the complaint or dispute is vexatious or frivolous;
  • that it has been previously dealt with by a court or another ADR entity;
  • that the value is above or below the monetary limits;
  • that the consumer has not submitted the complaint to the ADR entity within the requisite time limit (which cannot be shorter than a year);
  • the dealing with the dispute would impair the effective operation of the ADR entity.

Where the ADR entity is unable to deal with the dispute, it must provide a reasoned decision within three weeks in writing.


Traders Customers and ADR

An agreement between consumers and traders to submit disputes to ADR entities may not be binding on a consumer if it was concluded before the dispute arose and it has the effect of depriving the consumer of his right to take action in court.  Where the procedure is binding on the parties, they must be informed in advance and they must specifically agree to it.

Traders must take steps to inform consumers of the ADR entities by which they are covered.  The information must be provided in a clear, comprehensible and easily accessible way on the trader’s website and in the relevant terms and conditions.  Traders need not be covered by an ADR entity.


Information which ADR Entities must Publish

The information which must be made available by ADR entities on their website or if requested, in durable or other means as considered appropriate, includes the following:

  • contact details;
  • names of the persons in charge of the ADR process;
  • method of appointment and length of the mandate;
  • a statement whether the ADR is listed (by the EU on foot of a notification by states of ADR bodies);
  • statement regarding expertise and impartiality;
  • membership of an ADR networks allowing for cross-border dispute resolution, if applicable;
  • types of disputes with which they may deal and applicable thresholds;
  • procedural rules for the resolution of disputes;
  • grounds of refusal to deal with disputes;
  • types of rules, the entity may use;
  • preliminary requirements;
  • provisions regarding costs, including awarding of costs;
  • average length;
  • preliminary requirements
  • the legal effect of the determination;
  • penalties for noncompliance with binding decisions; and
  •  enforceability.

ADR entities must undertake annual reports dealing with their activities and provide designated information.


ADR Procedures

ADR procedures must be effective.  They must be available online and offline.  They must be available without the need to retain a lawyer.  Parties must be entitled to obtain advice and have third-party representation if they choose. The procedure must be available free or at a nominal sum to the consumer.

The ADR entity must inform the parties to the dispute as soon as they have received all documents.  The outcome of the dispute must be notified within 90 days of the receipt of the complaint file.  This may be extended in the case of highly complex disputes, provided however that the parties must be informed of the extension and its expected duration.

Parties must be allowed to express their position within a reasonable time after being provided with the relevant documents. They must be notified expressly that they do not require legal representation, but that they may use it or may use third-party advice.

Parties must be advised of the outcome of the procedure in writing or in another durable medium.  They must be given reasons for the decision.


Proposed Solution/ Resolution

Where the parties are given a proposed solution, they must be able to withdraw at any stage.  Their right to do so must be advised to them at the outset.  They must be advised that they have a choice whether to accept a proposal or withdraw and that participation does not preclude them seeking redress in legal proceedings in which the outcome may differ.

Where the ADR procedure seeks to impose a solution in circumstances where there is a conflict of laws, the consumer must not be deprived of protection afforded to him by the mandatory rules of law of the place where the consumer and trader are habitually resident.

Where the conflict of laws is resolved under the Judgments Convention, the solution adopted must not deprive the consumer of protections afforded by the mandatory provisions of law in the State in which he is habitually resident.


The ODR Platform

The platform must provide an electronic complaint form which informs the respondent of the terms of the complaint. The ADR entity transmits the complaint to the respondent.  It must offer electronic case management free of charge. It must provide

  • translations of necessary information,
  • for the transfer of information electronically
  • a feedback system and
  • general information on ODR and ADR.

Each State must nominate an ODR contact point and notify it to the Commission.  There must be at least two ODR advisers The contact point must support dispute resolution by facilitating communication.  This is to include assistance with submission of the complaint, providing general information on consumer rights and on the functioning of the ODR system, providing explanations on the ADR’s procedural rules and providing information on other means of redress, where the dispute cannot be resolved through the ODR platform.


ODR Procedure I

The electronic complaint form must be completed.  It may be returned to the complainant if it has not been properly completed. Once completed, it must be transmitted without delay to the respondent, together with information regarding the ADR entities which have jurisdiction to deal with the complaint, if they are referred to in the form or identified by the platform.

If the respondent is a trader, it must be invited to respond within 10 days regarding whether it is obliged under domestic law, or where not obliged, it is prepared to use the ADR mechanism to resolve the dispute. If so, it must specify which ADR entity he wishes to use. If the respondent is a consumer, and the trader must use a designated ADR, the consumer must be invited to use the ADR entity within 10 days. If the trader is not obliged to use a designated ADR entity, the consumer must identify which, if any entity, he is prepared to use.

Once the material information is provided by the respondent, the platform must communicate it to the complainant and automatically transfer the complaint to the designated entity without delay. The ADR entity is to inform the parties without delay, whether it is prepared to deal with the dispute.


ODR Procedure II

If the parties fail to agree on an ADR entity within 30 days of the submission of the dispute or where the ADR entity refuses to deal with the dispute, the ODR part of the process terminates and the complainant must be advised to contact the ODR advisor at the relevant contact point, for information in relation to other means of redress.

If the ADR entity accepts the dispute, it must reach a decision within 90 days.  It may not require the physical presence of the parties and their representatives unless its rules so provide and the parties agree.  It is obliged to communicate through the ODR platform, the date of conclusion of the procedure and the results.

Online traders, regardless of whether they use the ODR, must provide the link to the ODR platform.  Online traders who are obliged or committed to using ADR under domestic law, must inform consumers regarding the existence of the ODR platform and the possibility of its use.  Consumer and business associations are to encourage electronic links to the platform.


References and Sources

Irish Texts

Consumer Law Rights & Regulation    Donnelly & White (2014)

Consumer Protection Act 2007 Annotated  Bird (2008)

Consumer Rights Long (2004)

Commercial & Consumer Law: Annotated Statutes O’Reilly, P (2000)

UK Texts

Consumer Sales Law: The Law Relating to Consumer Sales and Financing of Goods 3rd ed

John MacLeod, James Devenney (2019)

Electronic Consumer Contracts in the Conflict of Laws 2nd ed Zeng Sophia Tang (2018)

The Law of Consumer Redress in an Evolving Digital Market: Upgrading from Alternative to Online Dispute Resolution Pablo Cortes (2017)

Blackstone’s Statutes on Commercial & Consumer Law 2017-2018 Francis Rose

Consumer and Trading Standards: Law and Practice 2017 Bryan Lewin, Jonathan Kirk

Woodroffe and Lowe’s Consumer Law and Practice Woodroffe and Lowe’s Consumer Law and Practice 10th ed Geoffrey Woodroffe, Chris Willett, Christian Twigg-Flesner (2016)

Butterworths Trading and Consumer Law Looseleaf Annual Subscription Deborah L. Parry, Roland Rowell (2016)

Butterworths Commercial and Consumer Law Handbook 8th ed Richard B. Mawrey, Tobias Riley-Smith (2015

Consumer and Trading Standards: Law and Practice 4th ed

Legislation

Sale of Goods Act 1893 56 & 57

Sale of Goods and Supply of Services Act 1980

The 2011 Report of the Sales Law Review Group,

Consumer Protection Act 2007 19/2007

Competition and Consumer Protection Act 2014 29/2014

European Union (Online Dispute Resolution for Consumer Disputes) Regulations 2015, S.I. No. 500 of 2015

European Union (Online Dispute Resolution for Consumer Disputes) Regulations 2016, S.I. No. 32 of 2016

European Union (Consumer Information, Cancellation and Other Rights) (Amendment) Regulations 2016, S.I. No. 336 of 2016

European Union (Alternative Dispute Resolution for Consumer Disputes) Regulations 2015, S.I. No. 343 of 2015

European Union (Alternative Dispute Resolution for Consumer Disputes) (No. 2) Regulations 2015, S.I. No. 368 of 2015

European Union (Online Dispute Resolution for Consumer Disputes) Regulations 2015, S.I. No. 500 of 2015

European Union (Online Dispute Resolution for Consumer Disputes) Regulations 2016, S.I. No. 32 of 2016

European Union (Consumer Information, Cancellation and Other Rights) (Amendment) Regulations 2016, S.I. No. 336 of 2016