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Disputes between online traders and consumers

02/2016

Against the background of growing rates of local and cross-border online sales, an online platform for an out-of-court settlement of disputes (the "Platform") was recently launched on the European Commission's internet site. The Platform facilitates, in a great extent, the settlement of disputes between e-traders and consumers from various Member States and is expected to boost the confidence in the digital single market and the growth of the cross-border electronic commerce within the EU. The idea is to create a fast, easy, efficient and low-cost method for solving disputes arisen between consumers and e-traders.

What is the Platform

The Platform became accessible for consumers and e-traders on 15 February 2016 on the following address: http://ec.europa.eu/odr. According to the EU legislation, there should be procedures for an out-of-court resolution of disputes between consumers and traders in each EU Member State. Bulgaria introduced bodies? for an alternative dispute resolution for consumer disputes last year. Currently, the ADR entities (the "Alternative Dispute Resolution or ADR Entities") are fifteen conciliation commissions (one general and fourteen sector-based). With cross-border online transactions, the ADR entities may be employed/used namely through the Platform.

Who does the Platform work for

Both consumers and traders may use the Platform. The consumers should include natural persons residents of the EU, acting for purposes that are outside their trade, business, craft or profession. The traders should be natural or legal persons established in the EU, who act for purposes relating to their trade, business, craft or profession. An additional precondition is that the order of goods or services should have been made online. Disputes arising out of health care services, as well as certain educational services, are excluded from the field of goods and services, which the Platform may be used for.

How does the Platform work

The consumer/trader shall fill an electronic complaint form in the EU language of his preference, indicating (i) the quality of the person filing the complaint (consumer or trader); (ii) contact details of the counterparty; (iii) language in which the complainant would like to receive messages; (iv) type of good or service the complaint refers to; (v) price; (vi) date of the purchase; (vii) whether the complainant has already tried to reach an out-of-court settlement or taken the other party to court over the complaint; and most importantly (viii) what the complaint consists of.

The Platform shall without delay transmit the received complaint to the respondent party with an indication that, in order for the dispute to be settled this way, the parties should agree upon the ADR Entity, which would handle the complaint. The answer of the respondent party should be received within up to ten days. In case the complainant is a consumer, the response should contain information about whether the trader is under the obligation to address a certain ADR Entity or it accepts that the dispute is settled by one of the ADR Entities suggested by the Platform. If the respondent party is a consumer, the answer should specify whether the consumer accepts the ADR Entity mandatory for the trader (if any), or he agrees to one of the ADR Entities suggested by the Platform. It is worth mentioning that regardless of the quality of the respondent party - trader or consumer, the out-of-court settlement of disputes is completely voluntary. Where the parties fail to agree within 30 calendar days on an ADR Entity, the complaint shall not be processed further.

Provided that the parties agree upon an ADR Entity, the Platform shall transmit the application to it. The ADR Entity shall examine the case entirely online within a timeframe of 90 calendar days, preliminarily providing the parties with explanations on its procedural rules. The dispute may be settled both by an amicable agreement when such is reached between the parties and by a decision of the entity in question, which the Parties may agree to, reject or follow, in conformity with the ADR Entity's applicable procedural rules.

What online traders should know

It is mandatory to provide a link to the Platform on the website of the trader, which should be easily accessible for consumers. The e-mail address of the trader should also be indicated. These requirements are also valid for traders, who use online platforms such as eBay. If the trader sends offers by e-mail, a link to the Platform should be provided therein. Where the general terms and conditions of the trader are applicable to online sales, they should also contain a link to the Platform.

Why it is more profitable to use the Platform

Cross-border online transactions raise the problem of establishing the applicable law. At least one of the two parties will always have to get acquainted with an applicable foreign legal system, and respectively engage a competent legal advisor. This is particularly burdensome to consumers. The need of getting familiar with unknown legal systems or searching of competent legal advisors will be avoided through the use of the Platform.

The claimant shall submit his complaint by filling a single standardized form. Given that the proceedings are voluntary and no legal consequences shall arise for the respondent party if it rejects it, the parties will still be inclined to make use of it due to the significant cost reductions. The fees of the ADR Entities are usually lower than court fees. If the claimant's offer for out-of-court settlement is rejected, this party may bring an action before the courts. In fact, such approach will be more time and cost consuming for the complainant. In case, however, he eventually wins the case in court, the amount the respondent party will have to pay, will be considerably higher than that awarded under an ADR procedure.

Authors

Picture of Darina Baltadjieva
Darina Baltadjieva
Picture of Gabriela Edreva
Gabriela Edreva