EU Council adopts position on adapting dispute resolution rules

Brussels (The Brussels Morning Newspaper) – The European Council adopted position on efforts to facilitate dispute resolution.

The EU Council has assumed its negotiating mandate on a package of actions to adapt the alternative dispute resolution (ADR) framework to the challenges of the digital world. Many consumers facing a dispute with a company decline to litigate due to the small sums involved, lengthy process times or a lack of faith in the possibility of reaching a satisfactory solution. ADR mechanisms permit consumers to settle their conflicts with companies before going to court.

What changes are proposed for alternative dispute resolution?

The position of the EU Council covers the modification of the ADR directive and the regulation on the discontinuation of the online dispute resolution (ODR) platform. The legislative proposals seek to expand the scope of issues that can be resolved out of court, and make ADR mechanisms easier, faster, and more engaging for both consumers and companies. 

The negotiating mandate assumed today defines the scope of the directive to contractual disputes and to the European territory. It proposes several steps to reduce the burden on all actors and empowers the Commission to substitute the existing ODR platform with a new digital tool.

How will digital tools transform consumer dispute resolution?

The EU Commission’s proposal extends the scope of the directive to include all dimensions of EU consumer protection laws and all sorts of companies, including non-EU traders. The revised directive seeks to cover new kinds of unfair practices (e.g. interfaces and advertising that are manipulative, or geo-blocking mechanisms) that the current directive does not cover.

How does the council’s mandate reduce the ADR burden on entities?

For reasons of legal confidence and to ensure effective enactment, the Council position limits the scope of the ADR directive to disputes stemming from a contract, rather than letting it include non-contractual disputes as proposed by the Commission. 

When it comes to geographical scope, the Council position permits member states on their national legislation to determine the application of ADR procedures to conflicts with third-country traders. The Council position gives member states the flexibility to develop the conditions for the bundling of cases at the national level. This will permit the directive to be adapted to the different national systems for managing complaints.