Since October 2015, all online traders should have been complying with the new legislation on alternative dispute resolution (ADR), which imposed obligations on traders to provide consumers with certain information relating to ADR.
New legislation has also been adopted relating to online dispute resolution (ODR) in the form of the ODR Regulations.
From 15th February 2016, the ODR Regulations introduce an additional requirement for online traders to include a link on their website to the European Commission’s online dispute resolution platform (ODR Platform): http://ec.europa.eu/consumers/odr/.
This requirement applies to all traders established in the EU who sell goods or services online, irrespective of whether they currently market those goods or services in other EU countries.
What is the purpose of the ODR Platform?
The ODR Platform is intended to give traders and consumers confidence to sell and make purchases online and across borders, knowing that they will have access to a mechanism to facilitate the fair and impartial out-of-court resolution of disputes, in a simple, fast and low-cost way.
The ODR Platform allows consumers who have a complaint about a product or service bought online to submit the complaint via an online complaint form to a trader based in their own or another European Country, and for the ADR process to be conducted online. The website will enable traders and consumers to translate the complaint and proceedings into any one of the 23 official languages of the European Union.
What is the ODR Procedure?
Unless a trader is obliged by law, e.g. by regulation, or by the rules of a trade association to use ADR, the ODR Regulations do not require a trader to engage in the ADR process via the ODR Platform, but the link to the ODR platform must be given nonetheless.
In brief, if a consumer makes a complaint via the ODR Platform, the procedure will be as follows:
- Theconsumer will fill in an online complaint form;
- The complaint will be sent to the trader;
- If the trader agrees to engage in the ADR process, the trader will select an ADR provider;
- If the consumer agrees on the ADR provider selected to handle the dispute, the ODR Platform automatically transfers the dispute to that provider;
- The ADR provider handles the case entirely online and reaches an outcome in 90 days.
If the consumer and trader cannot agree on an ADR provider to handle the dispute or the trader does not agree to engage in the ADR process, the complaint procedure will end via the ODR platform and the consumer, should they wish to pursue their claim, will need to do so via the courts.
What are the Implications for Dealing with Customer Complaints?
The European Commission has stated that consumers should still be encouraged in the first instance to resolve problems directly with a trader before seeking to pursue the ADR route via the ODR Platform.
Indeed, many ADR providers will refuse to accept a case unless and until the trader and consumer have exhausted all possible avenues via the trader’s internal complaints procedure.
Accordingly, it is advisable for traders to set out a clear complaints procedure online for consumers to follow should they have reason to complain about a product or service.
As consumers become more familiar with the possible ADR alternatives when a complaint cannot be resolved with a trader directly, traders will need to make decisions about their ADR strategy.
Whether a trader decides to engage in ADR may become an increasingly important factor for consumers when making their buying choices.
As well as demonstrating a clear commitment to high quality customer service, there are potential benefits for traders in adopting an effective ADR strategy.
Engaging in ADR should help traders to avoid protracted disputes with consumers and the inevitable diversion of valuable time and resources, allowing customer service teams to focus on more productive areas. Also, in this age of social media and consumer feedback, ADR should help traders to avoid potential damage to their reputation and their brands.
For further information, please contact Zoë Reynolds at firstname.lastname@example.org to discuss you ADR options or if you would like more information about how ADR and ODR may affect your business.
You can also read our ADR blog “Changes to Consumer Dispute Resolution”.
To learn more about our work in the Retail Sector, click here or to learn more about Zoë's experience in the retail and fashion sector, click here.
These notes have been prepared for the purpose of an article only. They should not be regarded as a substitute for taking legal advice.