Out-Law News | 18 Feb 2016 | 11:09 am | 2 min. read
Many companies are required under EU law to provide a link to the online dispute resolution (ODR) platform on their websites and also seek to address consumer complaints through alternative dispute resolution (ADR) schemes which the ODR platform has been set up to advertise.
"Most consumers experiencing problems when buying online don't complain, as they believe the procedure is too long and that it won't be solved," EU justice commissioner Věra Jourová said. "The online dispute resolution platform is 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."
EU businesses that sell goods or services online to consumers, as well as online marketplaces, are obliged to provide a link to the ODR platform on their websites. The link must be "easily accessible for consumers" under the terms of the EU's ODR regulation.
The ODR rules supplement other EU reforms on alternative dispute resolution (ADR) which came into force in October 2015 and are aimed at ensuring more disputes are resolved before selected 'ADR approved bodies' than the courts. The Commission said approximately 117 ADR bodies from 17 EU countries are already "connected to the online dispute resolution platform".
Businesses operating outside of regulated sectors are not obliged to engage with the ADR scheme under the rules but they are required to tell consumers about the existence of ADR schemes and whether they intend to use them.
Where businesses are committed to or opt-in to the new dispute resolution regime the ODR regulation requires them to "inform consumers about the existence of the ODR platform and the possibility of using the ODR platform for resolving their disputes".
Specialist in IT disputes resolution Clive Seddon of Pinsent Masons, the law firm behind Out-Law.com, said that businesses that do not operate in regulated sectors should consider the reputational pros and cons before deciding whether to opt in to the ADR and ODR regime.
"Handling consumer complaints well can help businesses salvage faltering relationships as well as avoid potential negative publicity, including on social media where consumers have a platform to air grievances that can gain wider traction," Seddon said. "Therefore, outsourcing complaint-handling is something businesses need to think very carefully about."
"There is inherent trust in the court system, the skill of judges and that the outcome of cases will be legally fair. Businesses will want to satisfy themselves that an ADR process follows due process and delivers good quality justice too. The security, confidentiality and impartiality offered by approved ADR bodies are all matters businesses will want to do due diligence on," he said.
"However ODR is here to stay. With the very high cost of litigation and arbitration, it is inevitable that ODR will increase and grow beyond consumer to business complaints. This is very much at the heart of the EU Commission’s digital single market strategy for Europe," Seddon said.
A factsheet on the ODR regime (3-page / 365KB PDF) issued by the Commission said that the ODR platform is "user-friendly, multilingual and accessible to all".
"Everything is done in four, simple steps: The consumer fills in an online complaint form and submits it. The complaint is sent to the relevant trader, who proposes an ADR entity to the consumer. Once consumer and trader agree on an ADR entity to handle their dispute, the EU ODR platform transfers automatically the complaint to that entity. The ADR entity handles the case entirely online and reaches an outcome in 90 days," it said.