Changes from report parliamentary committee draft to report parliamentary committee draft

RemovedEXPLANATORY STATEMENT

RemovedThe Alternative Dispute Resolution for consumers (ADR) Directive from 2013 aimed to ensure that consumers within the EU have access to high-quality out-of-court processes to resolve their contractual disputes against traders established in the EU. Nevertheless, the 2019 Commission’s report on the application of the ADR Directive and the ODR Regulation concluded that the ADR/ODR framework is not reaching its full potential. In addition, according to the Commission’s 2023 Consumer scoreboard, despite a quarter of consumers having experienced a problem worthy of complaint, a third of them did not act due to lengthy procedure times, small amounts involved, or low confidence in a satisfactory solution to the problem. This results in only 300,000 eligible disputes annually in the EU.

RemovedThe Commission’s proposal on the revision of the ADR Directive aims to adapt to disputes resulting from new consumer market trends, which contain much more online purchasing, including from non-EU traders. The proposal extends the scope of the ADR Directive to include all kinds of consumer disputes including consumer rights applicable to non-contractual and pre-contractual situations, and to include traders established outside the EU. The proposal introduces a new digital interactive tool that provides general information on consumer redress and links to the webpages of the notified ADR entities.

RemovedThe Rapporteur agrees that the ADR Directive needs to be modernised in order to improve efficiency and quality of ADR procedures, and give consumers more opportunities to settle their disputes outside of court in a way that is quicker, cheaper, and more convenient. The Rapporteur welcomes the revision of the ADR procedure, however, regrets that the Commission has only partially addressed the structural problems of the ADR procedures, such as the low engagement in ADR among businesses and consumers, the consumers unawareness, and the lack of trust among consumers and traders in ADR entities. Therefore, the draft report aims to increase the level of ambition of the Commission’s proposal with a two-fold objective: raising consumer awareness and increasing traders’ participation in ADR procedures.

RemovedWhen it comes to the material scope proposed by the Commission, the Rapporteur believes that an extension to non-contractual and pre-contractual obligations could lead to confusion for consumers and traders, and a lack of the necessary resources and expertise to handle the dispute for ADR entities. Therefore, the Rapporteur is proposing a reasonable extension of the material scope of consumer ADR, and suggests including specific statutory consumer rights not yet covered under the current Directive, such as non-discrimination on the basis of nationality or place of residence, the right to switch providers, passenger and travellers’ rights and mandatory pre-contractual trader obligations. Furthermore, the Rapporteur welcomes the extension of the geographical scope to include the possibility for traders established outside the EU to participate (on a voluntary basis) in ADR procedures.

RemovedRegarding trader participation in ADR procedures, the Rapporteur is suggesting to address the issue from two perspectives: (1) traders’ participation in ADR procedures, and (2) traders’ compliance with the outcome of such procedures. The Rapporteur therefore suggests mandatory trader participation in the fields of tourism and transport, due to high numbers of consumer complaints. For those sectors where national legislation makes the participation in ADR procedures voluntary, the Rapporteur introduces an obligation for traders to explain why they choose not to participate in the procedure. The Rapporteur welcomes the new obligation for traders to respond to a request made by an ADR entity whether they plan to participate in an ADR procedure against them or not. However, the Rapporteur believes that 10 working days would allow for a sufficient time frame for the traders to reply (instead of 20 working days as proposed by the Commission).

RemovedIn order to increase traders’ participation in the ADR procedures, the Rapporteur propose that traders who unfairly and consistently disregard the outcomes of ADR procedures will have their names made publicly known by the Member States, and that they will be required to give written explanations to the other parties to the ADR procedure in the event that they do not comply with its decision.

RemovedFurthermore, the Rapporteur strongly believe that the ADR revision should be an opportunity to improve consumers and traders awareness and their trust in the ADR procedures. That is why the Rapporteur is proposing better consumer awareness by establishing obligatory ADR information to be provided: on the trader’s website, which should be separated from other information, in the general terms and conditions and on the invoices issued by the trader. Besides the given information, traders will have to set up a dedicated email address allowing consumers to contact them solely for the purposes of ADR procedures. In order to improve expertise and knowledge, the Rapporteur proposes mandatory annual training for ADR staff to ensure that their knowledge is continuously updated to reach a higher interest in out-of-court dispute resolution. The proposed training will cover the area of consumer law and other relevant sectorial legislation.

RemovedWhen it comes to the reporting obligations for ADR entities, the Commission proposes to remove some reporting requirements currently imposed on consumer ADR entities, in particular information about the training provided by ADR entities of their staff or an assessment of the effectiveness of the ADR procedure offered by the entity and of possible ways of improving their performance. The Rapporteur disagrees with the removal of reporting obligations, that are allowing competent authorities to carry an effective supervision of ADR entities.