News and Press
Enhancing consumer redress
19 December 2011
At the end of November, the European Commission proposed the introduction of new laws on alternative dispute resolution for consumer disputes (i.e., the resolution of complaints without the need for traditional intervention of the Courts). This, together with the Consumer Rights Directive, can be seen as a strengthening of consumer rights particularly in the area of e-commerce.
Specific proposals have been put forward in respect of on-line dispute resolution with the proposed introduction of an "ODR platform": an interactive website which offers a single point of entry to consumers and traders who seek to resolve out of court a dispute which has arisen from a cross border e-commerce transaction.
In its proposal the Commission states that:
"…….Action at EU level is necessary to establish an EU wide ODR platform which is an essential tool for promoting e-commerce. It is also imperative to provide European consumers with the same level of protection and promote competitive practices amongst businesses, thus increasing the exchange of products and services online and across borders……..".
On a UK level, this is likely to tie in with the Government's announcement in the light of the Consumer Rights Directive to introduce a new Consumer Bill of Rights. Whilst this can be rightly viewed as another mechanism for strengthening consumer rights across Europe, it also provides opportunities for businesses as well. The purpose of these measures is to build confidence in e-commerce and this in turn is likely to open up new opportunities for businesses.
David Hercock, a Barrister and senior Associate in TLT's Commercial Regulatory and Corporate Defence team comments:
"The regulation of consumer protection in the EU is to see significant change. Businesses will need to ensure that they keep up to date with these developments and revise their practices. The use of an on-line ADR process is likely to produce time savings and also ease communications between the parties. Not only can effective use of these procedures resolve matters efficiently, good use of an alternative dispute resolution procedure can also assist in avoiding, and handling, intervention from the regulators. Indeed, customers who would have been otherwise inclined to complain to the regulators may be less minded to do so: instead focusing on the ODR route. Further, genuine efforts by businesses, who engage with the process, to resolve consumer issues ought to be viewed more positively by the regulators."