European Union introduces new regulations for streamlined resolution of cross-border disagreements

European Union Modernizes Alternative Dispute Resolution Framework

The European Parliament and the Council of the European Union have adopted legal rules for Alternative Dispute Resolution (ADR) in the EU, aiming to modernize the digital market and simplify the resolution of cross-border disputes.

Under the new rules, ADR entities must maintain websites where consumers can easily find information on procedures and submit and track their complaints online. This digital-friendly approach is designed to make it easier for consumers to voice their concerns and for businesses to respond promptly.

The agreed measures do not compel businesses to participate in ADR, unless specific EU or national law mandates it. However, Member states are encouraged to implement measures to boost trader and consumer participation in ADR, such as information campaigns, certificates, or financial incentives.

The new rules impose a duty on traders to respond within a specified timeframe (not exceeding 20 working days, or 30 days in complex cases) when a consumer requests ADR intervention. A lack of response from traders will be considered as a refusal, allowing cases to be closed.

ADR involves impartial, out-of-court bodies helping consumers and companies resolve issues amicably, in a fair and low-cost manner. The new rules aim to modernize the existing ADR rules for the digital economy, making it easier to resolve cross-border disputes and streamlining procedures for both consumers and businesses.

The agreed rules clarify that the ADR framework applies to consumer rights disputes stemming from a contract, including issues before and after the contract. Particular attention should be paid to sectors with a high number of consumer complaints, especially the transport and tourism sectors, including air passenger rights.

The new rules also allow traders established in third countries to participate in ADR procedures. Moreover, ADR entities are now authorized to group similar cases against the same trader together (with consumer consent), resulting in faster and more coherent procedures.

The updated and simplified EU ADR framework is a significant step towards enhancing consumer protection and fostering a more efficient digital market in the EU. It is expected to provide consumers with a more accessible and effective means of resolving disputes, fostering trust and confidence in the digital economy.

European Union introduces new regulations for streamlined resolution of cross-border disagreements