The defining characteristic of ADR is that it is non-judicial. It involves a neutral third party, such as an arbitrator or mediator, who can propose a solution or bring the parties together to help find a solution. ADR does not cover customer complaint handling systems by business, amicable settlements directly between a consumer and a trader, or mediation processes within the judicial system. It primarily concerns individual cases, but can also handle together several individual cases when they are similar. ADR bodies have been more widely set up to solve disputes in the telecommunications, travel/tourism and financial services sectors. The need for ADR schemes is becoming pressing in the online environment given the increase in online shopping (from 22 per cent in 2004 to 37 per cent). Nevertheless, cross-border online transactions remain low (8 per cent). One reason is that consumers lack confidence when shopping abroad. Indeed, 71 per cent of consumers consider the resolution of problems more difficult when shopping abroad.
The Commission has already been active in promoting ADR. Two Recommendations on consumer ADR exist which establish a number of minimum guarantees, such as independence, that ADR schemes should respect. Several Directives either encourage or oblige Member States to set up ADR schemes in specific sectors (e.g. energy and telecommunications). The recent Directive on Mediation (to be implemented by May 2011) encourages judges to invite parties to settle their case via mediation.
Three main problems remain:
- The absence of ADR schemes in some market sectors or regions of the EU
- Limited awareness and lack of transparency: 40 per cent of retailers do not know about ADR schemes, and there is little access to information for retailers and consumers. In 2009, only 3 per cent of EU consumers took their case to an ADR body, and only 9 per cent of European retailers actually used an ADR scheme.
- Traders' reluctance to engage: 64 per cent of ADR schemes are voluntary and only 6 per cent of European traders are members of any scheme. Traders do not always comply with decisions reached since these are non-binding.
Further action at EU level is therefore needed in order to set up an EU-wide system as foreseen in the Commission work programme 2011
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