From 15 February 2016, the EU Online Dispute Resolution (“ODR”) platform will come into operation for businesses and consumers. It is intended to allow consumers and traders to settle online disputes without the need to go to the time and trouble of court proceedings.
All EU businesses that sell goods or services online to EU consumers must provide a link on their websites to the EU ODR platform. Online traders who are committed to using alternative dispute resolution (“ADR”) must also provide information about the ODR platform in their terms and conditions.
The EU ODR Regulation came into force last year and was implemented into UK law as part of the Alternative Dispute Resolution for Consumer Disputes Regulations 2015.
ADR is a way of resolving a dispute without going to court and includes mediation and arbitration. Both forms involve an independent third party who either helps the disputing parties to reach a mutually acceptable outcome (mediation) or examines the facts and makes a decision on the outcome that is binding on one or both parties (arbitration).
The EU ODR platform is designed to be multi-lingual and user-friendly. The underlying aim is to allay traders’ and consumers’ concerns about resolving disputes and thereby to remove one of the main barriers to cross-border online trade, particularly in relation to small businesses. It is hoped that the availability of a recognised, quick and cost-effective platform for dispute resolution will encourage both consumers and online traders to broaden their trading and purchasing horizons.
The process to using the ODR platform consists of 4 steps:
- The consumer submits an online complaint form on the ODR platform;
- The complaint is sent to the relevant trader, who proposes an ADR entity;
- Once the consumer and trader agree an ADR entity to handle the dispute, the complaint is transferred by the ODR platform to that ADR entity;
- The ADR entity deals with the matter online and resolves the matter in 90 days.
Each EU member state will have its own list of ADR entities. In order to be one of the ADR entities, those entities need to comply with quality requirements set out by the EU ADR Directive.
What do you need to do?
The requirements from 15 February vary, depending on whether your business is regulated: that is, obliged by law or otherwise committed (by trade association, for example) to use an ADR entity.
Every online trader is obliged to provide an electronic link on its website to the ODR platform (http://ec.europa.eu/consumers/odr/), whether it currently markets itself domestically or to other EU states.
Regulated online businesses must inform consumers of their nominated ADR entity and also the ODR platform either on their website or by email. They must inform consumers of the existence of the ODR platform and the possibility of using the ODR platform to resolve disputes. A link to the ODR platform must also be included in any offer made to consumers by email and within the terms and conditions of any online sales or services contracts.
If a trader fails to comply with the information requirements, trading standards services can apply for a court order to compel performance. Failure to comply with such a court order could lead to maximum penalties of 2 years in prison and an unlimited fine.