MHC Tech Law: What e-commerce traders need to know about online dispute resolution

22 Feb 2016

Now that the EU’s Online Dispute Resolution platform is live, Mason Hayes & Curran explains how online businesses can assist customers and ensure compliance.

Resolving disputes through alternative dispute resolution (ADR) can be easier, faster and less expensive than resolving disputes through the court system. Until now, alternative dispute resolution has not been widely used to resolve disputes between traders and consumers. This has often left consumers frustrated and without an effective remedy when they encounter problems with goods or services.

Last week, the EU Online Dispute Resolution (ODR) platform went live to both consumers and traders. The ODR platform can be accessed throughout the EU and the platform supports the 23 official languages of the European Union.

The legislation

The European Union (Alternative Dispute Resolution for Consumer Disputes) Regulations 2015, in force since September 2015, and the European Union (Online Dispute Resolution for Consumer Disputes) Regulations 2015, which came into effect on 9 January 2016, require traders to change some of their practices when dealing with consumers.

The Online Regulations make some significant changes. Two of the main changes are the creation of the ODR platform and new information requirements.

How online dispute resolution works

The ODR platform is an online platform that facilitates consumers and traders within the EU in resolving disputes that may arise from cross-border e-commerce business transactions.

In action, a consumer completes an online complaint form and submits it to the ODR platform. This complaint is sent by the ODR platform to the trader.

The parties have 30 days to agree on which dispute resolution body will handle their dispute. Once they agree, the platform will automatically send the details of the dispute to that body.

After the dispute is referred to the appropriate body, if the dispute resolution body agrees that it is competent to handle the complaint, it has up to 90 calendar days to decide the outcome. However, if the matter is very complex, the procedure may take more than 90 days.

Once a determination is made, the dispute resolution body will inform the parties of the outcome.

What are the new information requirements? 

Where the ADR Regulations apply to traders, traders must now inform consumers about the existence of the ODR platform and the option to use the platform to resolve disputes, and provide an electronic link to the ODR platform on their website or in an email if the offer is made by email. This link must be easily accessible to consumers.

Who is excluded from using the ODR platform?

The ODR platform will not accept complaints from a consumer living outside the EU, from a consumer complaining about a trader established outside the EU, or from a consumer complaining about goods or services bought offline (e.g physically in a shop); or complaints about higher education or healthcare services.

Relevant bodies

The ADR Regulations appointed the Irish Competition and Consumer Protection Commission (CCPC) as the competent authority to oversee and regulate the functioning of alternative dispute resolution entities established in Ireland. A list of the relevant ADR entities appears on the CCPC website.

Individuals requiring assistance with the ODR platform are encouraged to engage with their national contact point. In Ireland, European Consumer Centre Ireland has been designated as the ODR contact point in the State.

Are there sanctions for non-compliance?

Failure to provide consumers with the required information under both the ADR Regulations and Online Regulations is an offence. Breaches attract penalties of up to €5,000, 12 months’ imprisonment or both on conviction in the District Court.

What steps should traders take?

Traders should establish whether or not the ADR regulations and/or the ODR regulations apply to their businesses, and update their websites, apps, terms and conditions and offer emails to ensure compliance with the new information and technical requirements.

They should also become familiar with the ODR platform, new grievance processes and the ADR entities available to them so that they are informed of the changes and are able to respond to customers’ queries.

The content of this article is provided for information purposes only and does not constitute legal or other advice. 

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