Alternative Dispute Resolution

European Consumer CentreEuropean Consumer CentreLynnsey DelaneyLynnsey Delaney

[email protected] Dispute Resolution AdvisorDispute Resolution Advisor

European Consumer CentreEuropean Consumer Centre

WHO ARE WE? Part of a network of 29 countries, located

throughout the EU and the EEA Funded and run by the European

Commission, DG Health and Consumers, and national co-funders

In the Republic of Ireland this is the National Consumer Agency


WHAT WE DO:

Information on EU and national consumer legislation to EU citizens

Advice on cross-border consumer transactions

Assistance with cross-border complaints Liaison directly with company on the consumer’s behalf

Promotion – raising awareness of consumer rights nationally

Input into EU consumer policy – consultations and questionnaires sent to the European Commission

Input into consumer policy nationally – e.g. Car Rental Report


WHAT WE DON’T DO:

Engage in Irish-Irish disputes. National B2C disputes are dealt with by the NCA

Engage in non-consumer issues Consumer legislation does not apply to B2B

transactions Or where individual may not be business but is acting

in the course of trade

Engage in financial services disputes SOLVIT/Financial Services Ombudsman


OUR OBJECTIVE: To increase consumer confidence in the

Internal Market.

HOW: Show consumers that if they have a cross-

border complaint it will be heard and resolved – in this regard Alternative Dispute Resolution (ADR) has an important role to play

What is ADR??What is ADR??

Umbrella term to describe a variety of Umbrella term to describe a variety of methods of resolving a dispute without going methods of resolving a dispute without going to courtto court

Includes:Includes:ArbitrationArbitrationConciliationConciliationMediationMediationOnline Dispute Resolution Online Dispute Resolution

(ODR) (ODR)

ADR Processes ADR Processes

Arbitration: Arbitration: Independent third party, chosen with the Independent third party, chosen with the agreement with the disputing parties, who hears agreement with the disputing parties, who hears both sides in a dispute, and makes a decision, both sides in a dispute, and makes a decision, which in most cases is legally binding which in most cases is legally binding

Conciliation:Conciliation:Involves building a positive relationship between the parties to a dispute by seeking guidance from a neutral third party, who often plays a more active role in developing and proposing the terms of settlement

ADR Processes ADR Processes

Mediation:Mediation:Based on the principle that people can resolve their Based on the principle that people can resolve their own disagreements if given the right support. The own disagreements if given the right support. The role of the mediator is to facilitate co-operation role of the mediator is to facilitate co-operation between the parties and to assist them in reaching a between the parties and to assist them in reaching a mutually acceptable decisionmutually acceptable decision

Online Dispute Resolution:Online Dispute Resolution:Uses technology to facilitate the resolutionUses technology to facilitate the resolution of of disputesdisputes – – particularly suitable for cross-border particularly suitable for cross-border disputesdisputes

Governing Principles of Governing Principles of ADR ADR

Independence & ImpartialityIndependence & Impartiality Transparency Transparency Fairness & Fairness & Audi Alteram Partem Audi Alteram Partem Effectiveness Effectiveness Confidentiality Confidentiality

Benefits of ADR for BusinessesBenefits of ADR for Businesses

ADR offers many advantages:ADR offers many advantages:

Saves timeSaves time Often costs less money than traditional Often costs less money than traditional

litigationlitigation Assists in preservation of relationshipsAssists in preservation of relationships Greater PrivacyGreater Privacy Participation or membership of an ADR Participation or membership of an ADR

scheme can increase consumer confidence scheme can increase consumer confidence in a particular trader/industryin a particular trader/industry

Current Situation in EuropeCurrent Situation in Europe

750 ADR schemes in field of business-to-750 ADR schemes in field of business-to-consumer disputes consumer disputes

64% of ADR’s are voluntary64% of ADR’s are voluntary Only 9% of European retailers have used Only 9% of European retailers have used

an ADR scheme an ADR scheme Only 6% of traders are members of an Only 6% of traders are members of an

ADR schemesADR schemes

Obstacles preventing Obstacles preventing ADR’s development ADR’s development

Lack of awareness about ADR schemes Lack of awareness about ADR schemes Fragmented development of schemesFragmented development of schemes

- both geographically and sectorally (often - both geographically and sectorally (often schemes are industry specific)schemes are industry specific)

Fear that participating in ADR schemes Fear that participating in ADR schemes may be a sign of weakness may be a sign of weakness

Lack of confidence as to what tangible Lack of confidence as to what tangible benefits could be obtained from benefits could be obtained from participation participation

Recent European Recent European Developments in ADRDevelopments in ADR

Consultation Paper on the use of ADR as a Consultation Paper on the use of ADR as a means to resolve disputes related to means to resolve disputes related to commercial transactions and practices in commercial transactions and practices in the European Unionthe European Union

Sought responses to a number of issues, in Sought responses to a number of issues, in particular: particular: - How to raise awareness about ADR? How to raise awareness about ADR? - Should adherence to schemes be mandatory?Should adherence to schemes be mandatory?- Should ADR decisions be binding on the parties?Should ADR decisions be binding on the parties?

How to raise awareness How to raise awareness about ADR??about ADR??

Creation of a “single point of contact” in Creation of a “single point of contact” in each Member State which could signpost each Member State which could signpost individuals to existing ADR schemes and individuals to existing ADR schemes and would ideally have a team of case would ideally have a team of case handlers that would deal with disputes handlers that would deal with disputes where no specific scheme existswhere no specific scheme exists

Given complexity of some matters might Given complexity of some matters might be desirable to have sectoral-specific be desirable to have sectoral-specific commissions within the single point of commissions within the single point of contactcontact

How to raise awareness How to raise awareness about ADR?about ADR?

ECC Ireland considers that businesses ECC Ireland considers that businesses should be required to inform consumers should be required to inform consumers when they are part of an ADR scheme when they are part of an ADR scheme

Most likely beneficial time: pre-Most likely beneficial time: pre-contractual or contractual phasecontractual or contractual phase

Would ensure that potential consumers Would ensure that potential consumers are aware that the trader has a detailed are aware that the trader has a detailed procedure in place to deal with procedure in place to deal with complaints & gives additional confidence complaints & gives additional confidence in the trader in the trader

How to raise awareness How to raise awareness about ADR?about ADR?

Professional Legal Training Professional Legal Training -Important that legal profession be in a position to advise -Important that legal profession be in a position to advise disputants of the full spectrum of dispute resolution processes disputants of the full spectrum of dispute resolution processes available to them available to them

-Possible introduction of mandatory courses within legal -Possible introduction of mandatory courses within legal professional training coursesprofessional training courses

Mediation and Conciliation Bill Mediation and Conciliation Bill - Solicitor has duty to advise client prior to initiating any civil - Solicitor has duty to advise client prior to initiating any civil or commercial proceedings to consider mediation prior to or commercial proceedings to consider mediation prior to commenting civil/commercial proceedings and to sign a commenting civil/commercial proceedings and to sign a certificate that this has been done certificate that this has been done

Should participation be Should participation be mandatory? mandatory?

Traditional approach has always been Traditional approach has always been that ADR schemes should be that ADR schemes should be voluntaryvoluntary

Recently move towards the view that Recently move towards the view that voluntariness can not be examined in voluntariness can not be examined in isolation – imposition of cost sanctions isolation – imposition of cost sanctions

R Cowl v Portsmouth City Council R Cowl v Portsmouth City Council - Held court may of its own initiative fix a hearing - Held court may of its own initiative fix a hearing at which the parties could be made to give an at which the parties could be made to give an explanation as to what they would have to do to explanation as to what they would have to do to resolve the matter without recourse to the courts resolve the matter without recourse to the courts

Should participation be Should participation be mandatory?mandatory?

Dunnett v Railway Track Dunnett v Railway Track --UK Court of Appeal refused to award costs against the UK Court of Appeal refused to award costs against the successful claimant because the Defendant refused to successful claimant because the Defendant refused to consider ADR processes despite a recommendation to do soconsider ADR processes despite a recommendation to do so

In the aftermath of Dunnett, there was a In the aftermath of Dunnett, there was a significant increase in the uptake of significant increase in the uptake of mediation but also a steady decline in its mediation but also a steady decline in its success rate success rate

(Genn, Twisting Arms: Court Referred and Court (Genn, Twisting Arms: Court Referred and Court Linked Linked Mediation under Judicial Pressure) Mediation under Judicial Pressure)

Should ADR decisions be Should ADR decisions be binding on the parties binding on the parties

involved?involved? ADR procedures often lead to non-ADR procedures often lead to non-

binding recommendationsbinding recommendations Is frustrating for victorious side if in Is frustrating for victorious side if in

these instances the other side decides these instances the other side decides not to comply with the decisionnot to comply with the decision

ECC Ireland suggests ADR decisions ECC Ireland suggests ADR decisions should be binding on the trader, not should be binding on the trader, not on the consumeron the consumer

Notified ADR Schemes in Notified ADR Schemes in IrelandIreland

Advertising Standards Authority of Advertising Standards Authority of IrelandIreland

The Financial Services Ombudsman’s The Financial Services Ombudsman’s BureauBureau

The Office of the Pensions Ombudsman The Office of the Pensions Ombudsman Scheme for Tour Operators Scheme for Tour Operators Direct Selling Association of Ireland Direct Selling Association of Ireland

Thanks for your time and Thanks for your time and attention!attention!

Any Questions: Any Questions: [email protected]