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Consumer Alternative Dispute Resolution

Volume 561: debated on Wednesday 24 April 2013

The UK has opted in to the proposal for a directive of the European Parliament and of the Council on alternative dispute resolution for consumer disputes and amending regulation (EC) No 2006/2004 and directive 2009/22/EC (directive on consumer ADR).

The directive contains a provision which imposes a civil judicial co-operation obligation and therefore triggers the UK’s Justice and Home Affairs opt-in protocol. The proposal meets the criteria set out in the coalition agreement with regard to EU justice and home affairs measures. In particular, the Government consider that it is in the UK’s interest to opt in to the proposal because of the greater consumer protection it will bring.

Alternative dispute resolution (ADR) refers to schemes that are available to help complainants resolve their disputes outside court. The proposal will oblige member states to ensure that ADR schemes meeting certain, specified quality standards are available for any contractual dispute between a consumer and a business, should both parties wish to use ADR. The objective of the proposal is to build consumer confidence in the internal market, an aim which is aligned with the UK’s growth agenda.

The provision which triggers the opt-in protocol requires time limits for bringing claims to court to be extended if an ADR process is ongoing. Most ADR procedures are completed well within existing time limits, but this provision will ensure a consumer is not disadvantaged in the event that a time limit is due to expire while an ADR process is ongoing.

The European Parliament and the Council have now voted in favour of the proposal, which will be adopted in the coming weeks. The UK will then have two years in which to implement the legislation.