Consumer protection: Council approves the updated alternative dispute resolution directive 10:44 Council gives its final approval to the alternative dispute resolution (ADR)[...]

The Council has today given its final approval to a directive that updates, simplifies, and enhances the existing alternative dispute resolution (ADR) framework. ADR refers to methods for resolving disputes between consumers and traders outside of court, typically with the assistance of a neutral third party.

The legal text approved today aims to make ADR a more accessible and more appealing option for resolving disputes arising from contractual agreements, including issues related to precontractual obligations. It will make the ADR framework fit to digital markets, enhance the use of ADR in cross-border disputes and simplify ADR procedures to the benefit of all actors. Additionally, the proposal will rationalise reporting obligations and reduce administrative burden.

Subject to certain conditions, ADR will now also be available for disputes between EU-based consumers and traders from third countries. Furthermore, traders will have a duty to reply within 20 days after being contacted by an ADR entity, and failure to do so will be considered a refusal to participate in the process. The new directive requires member states to promote ADR participation for traders and consumers, and to put particular emphasis on sectors with low participation in ADR or with a high volume of consumer complaints.

The Commission will develop and maintain a user-friendly, multilingual IT tool to facilitate the use of ADR in cross-border consumer disputes.

Next steps

The approval of the first-reading position is the final step in the Council's adoption process. However, the text still needs to be approved in a plenary session of the European Parliament. Once adopted, the directive will take effect 20 days after its publication in the Official Journal. Member states will then have 26 months to incorporate the new rules into their national laws, and the rules will apply 32 months after the directive is published in the Official Journal.

Background

In any commercial relationship, traders and consumers may have disputes to resolve (for instance, if a product or service is not delivered on time or in good condition, or if the consumer has not paid the full purchase price). With the development of online shopping, the number of disputes has increased substantially. Resolving a dispute in court can be lengthy and entails the involvement of lawyers and considerable procedural costs. However, there are alternative ways to resolve problems without going to court.

According to the 2023 Consumer Conditions Scoreboard, 25% of consumers experience a problem worthy of complaint, but one third of them do not act. As a result, each year only 300 000 eligible disputes are resolved in the EU via ADR.

The most recent European legislation to regulate out-of-court consumer redress was adopted in 2013 and has not been amended since. On 17 October 2023, the Commission proposed a new package of measures to modernise and simplify the ADR rules. The package included a directive amending the ADR directive and a regulation to discontinue the Online Dispute Resolution platform, which was used less than expected. This ODR regulation was formally adopted on 19 November 2024.

• ADR council's negotiating mandate
• Council calls for the closure of the ODR platform and its replacement with a better tool (press release, 19 November 2024)
• Commission proposal on alternative dispute resolution
• Consumer protection (background information)