Alternative Dispute Resolution (ADR) and Online Dispute Resolution (ODR)

ADR schemes, also known as "out-of-court mechanisms", exist in many EU countries but they have been developed differently across the EU and the status of the decisions adopted by these bodies differs greatly. In May 2013, the Directive on Alternative Dispute Resolution (ADR) and a Regulation on Online Dispute Resolution (ODR) were adopted by the EU legislators and completed on 1 July 2015 by an implementing Regulation. These legislations are cross-sectoral texts and apply to the insurance sector. They cover all disputes between non-professional consumers and "traders" (for example, insurance intermediaries) in the context of the sale of goods or provisions of services. The ADR Directive takes into account the fact that other EU Directives and Regulations contain rules on ADR, like the IDD.

Online Dispute Resolution (ODR)

The ODR Regulation establishes a web-based platform for consumers who buy goods or services online. The ODR platform has been operational since 9 January 2016 and has been accessible to traders and consumers since 15 February 2016. The European Commission is preparing a report on the use of the platform for the end of the year and will initiate further actions promoting it.

Commissioner for Justice, Consumers and Gender Equality Věra Jourová defined the platform as “an innovative tool saving time and money for consumers and traders. It will improve consumer trust when shopping online and support businesses selling cross border, contributing to Europe’s Digital Single Market”. During its first year, 24,000 EU consumers used the platform. Norway and Iceland joined the platform in 2017.

Alternative Dispute Resolution (ADR)

The ADR Directive ensures the establishment of ADR schemes in all EU Member States. These two texts have filled previous gaps in coverage and ensured that consumers are able to take their disputes to an ADR. In addition, the ADR Directive establishes a common framework for ADR in the EU Member States by setting out common minimum quality principles in order to ensure that all ADR entities are impartial, transparent and efficient. Existing national ADR schemes should be able to continue to operate within the new framework.

Regarding the nature (binding or not) of the ADR procedure, the principle is that “the parties have the possibility to withdraw from the procedure at any stage if they are dissatisfied with the performance or the operation of the procedure” and that “they have the choice as to whether or not to agree to or follow the proposed solution” (Article 9.2). However, if national ADR procedures foresee that the outcome will be binding on the trader, then the non-binding nature of the solution will only apply to consumers.

EU Member States had until 9 July 2015 to transpose the ADR Directive into national law. By 9 July 2019 and four years thereafter, the European Commission will submit reports regarding the implementation of the Directive. 27 Member States out of 28 have communicated that they have implemented the Directive while Romania has not, neither has it designated a national ODR contact point.

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