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Services Directive: Resolving Disputes
Alternative Dispute Resolution (ADR) schemes, also known as 'out-of-court mechanisms', have been developed across Europe to help citizens engaged in consumer disputes where they have been unable to reach an agreement directly with the trader. ADR schemes usually use a third party such as an arbitrator, mediator or an ombudsman to help the consumer and the trader reach a solution.
The advantage of ADR is that it offers more flexibility than going to court and can better meet the needs of both consumers and professionals. Compared to going to court these schemes are cheaper, quicker and more informal.
However, these out-of-court mechanisms have been developed differently across the European Union. Some are the fruit of public initiatives both at central level (such as the consumer complaints boards in the Scandinavian countries) and at local level (such as the arbitration courts in Spain), or they may spring from private initiatives (such as the mediators/ombudsmen of the banks or insurance companies). Precisely because of this diversity, the status of the decisions adopted by these bodies differs greatly. Some are merely recommendations (such as in the case of the Scandinavian consumer complaints boards and most of the private ombudsmen), others are only binding for the professional (as in the case of most of the bank ombudsmen); and others are binding for both parties (arbitration).
The Commission has been active in promoting the development of Alternative Dispute Resolution. Two Recommendations adopted by the European Commission have established quality criteria that each ADR scheme should offer to its users. In addition, the Commission's proposal for a European Directive on Mediation in Civil and Commercial Matters aims to ensure a sound relationship between the mediation process and judicial proceedings, by establishing common EU rules on a number of key aspects of civil procedure. Finally, the European Consumer Centres Network (ECC-Net) provides consumers with information and assistance in accessing an appropriate ADR scheme in another Member State.
To ensure that out-of-court mechanisms (ADR) offer all parties involved minimum quality guarantees, the Commission published its first Recommendation in 1998: Recommendation 98/257/EC
A few years later, the Council noted in its Resolution on a Community-wide network of national bodies for the extra-judicial settlement of consumer disputes (13 April 2000) that many out-of-court mechanisms fell outside the scope of Recommendation 98/257/EC but nevertheless play a useful role in resolving consumer disputes. The Council invited the Commission to further develop criteria to cover these cases.
Recommendation 98/257/EC is limited to procedures where a third party proposes or imposes a decision to resolve the dispute (such as arbitration) but does not cover consensual settlement procedures (such as mediation) where the third party facilitates the resolution of a consumer dispute by bringing the parties together and assisting them in reaching a solution by common consent. The 2001 Recommendation establishes common criteria that these consensual procedures should meet in order to give consumers and businesses confidence that their disputes will be handled fairly, effectively and with rigour. The criteria do not prescribe how such procedures should operate but instead identify a set of principles that such procedures should follow in order to ensure a common minimum standard.
Each Member State provides the Commission with the names of the bodies responsible for the out-of-court settlement of consumer disputes. These are bodies which the Member State considers to be in conformity with the Commission's recommendations. This information is of interest not only to consumers, consumer associations and professionals who wish to submit a dispute to an out-of-court body; it is also of interest to the out-of-court bodies themselves because in this way they can familiarise themselves with the structure and operation of their counterparts in other Member States.
The ADR database includes the names and contact details of the bodies responsible for the out-of-court settlement of consumer disputes and which Member States and EEA countries consider to be in conformity with the Commission Recommendations 98/257/CE and 2001/310/CE. When cross border disputes occur, the European Consumer Centres can provide consumers with information about the procedures involved and can help them to access such bodies in another country.
Study on the use of Alternative Dispute Resolution in the European Union
The principal objective of this study is to analyse the use of Alternative Dispute Resolution (ADR) schemes, across the European Union.
Disclaimer: This study has been produced by outside contractors for the Health and Consumers Directorate-General and represents the contractors' views on the matter. These views have not been adopted or in any way endorsed by the Commission and should not be relied upon as a statement of the views of the Commission. The Commission does not guarantee the accuracy of the data included in this study, nor does it accept responsibility for any use made thereof.
Study on alternative means of consumer redress other than redress through ordinary judicial proceedings
The University of Leuven has conducted a study on alternative means of consumer redress other than redress through ordinary judicial proceedings. It consists of a comparative report and 28 national reports (for the EU-25, Australia, Canada and the US). The study includes an overview of the national legal provisions for collective redress.
Eurobarometer survey :
- Commission Recommendation of 4 April 2001 on the principles for out-of-court bodies involved in the consensual resolution of consumer disputes (2001/310/EC)
- Communication from the Commission on "widening consumer access to alternative dispute resolution", 4 April 2001
- Council Resolution on a Community-wide network of national bodies for the extra-judicial settlement of consumer disputes, 11 May 2000
- Commission Recommendation on the principles applicable to the bodies responsible for out-of-court settlement of consumer disputes (98/257/CE)
- Communication from the Commission on the "out-of-court settlement of consumer disputes", 30 March 1998
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