ALTERNATIVE RESOLUTION OF CONSUMER DISPUTES

1. ALTERNATIVE RESOLUTION OF CONSUMER DISPUTES

2. Slovenia • One of very few EU countries without a special legal regulation of that topic • Why? Other possibilities? • EU Directive on AR for Consumer Disputes – to be adopted until the end of 2012 • National implementation envisaged by the middle of 2014

3. The present legal basis (very general) • The Mediaton in Civil and Commercial Cases Act (lex generalis) • The Alternative Resolution of Court Disputes Act – lex specialis for court-attached ADR • Need for a specific statute

4. 2008 – DraftLaw on ARCD - SLO • Not yet in a parliamentary procedure • The amount of money needed for the adoption of such was not envisaged in the draft – budget problems; austerity measures? • Prepared by the Consumer Protection Office (cancelled by the Gov. and joined with the Ministry of Economy: the Consumer Protection Sector) • The de-facto strongest consumers’ organisation in SLO is the ‘Slovene Consumer Association’ (NGO)

5. Consumerdisputesrequirespecialregulationof ADR • Their specific character • Actual inequality between the consumer and the trader • Financial resources, experience, knowledge of law (one shot litigant v. repeat player) • Property value of a consumer dispute usually too low to be worth commencing judicial proceedings • Too big costs of the proceedings, too much time wasted

6. Classicaljudicialproceedings not appropriateforconsumerdisputes • Special importance of ADR • Possibility of a fast, simple and effective resolution of consumer disputes • if a previous attempt to reach an agreement between a consumer and a trader was not successful

7. 2008 ARCD DraftLaw • Basic principles (from the EU Commision’s recommendations) • Voluntariness • Peaceful dispute resolution • Legality • Adversariness • Transparency • Effectiveness • Respresentation • Economical and fast procedure • Independence

8. Arbitrationboard • Independent, permanent • In the framework of the National Consumer Protection Office (state body) Now within the Ministry of Economy (executive power)? • The value of a dispute to be resolved • EUR 40 – 5000 • Not less – triviality • Except in model proceedings („mass“ disputes) • Not more – better to commence classical civil proceedings

9. The draft law stimulates the establishment of private schemes for ARCD (at various business associations with participation of consumer protection organisations) • Proposer – only the consumer – Why not the trader? • If he/she previously submitted their request for redress to the trader • Minimal fee of EUR 20 (otherwise a free-of-charge procedure)

10. Written procedure (exceptionally oral) Why? • Oral in model procedures • President and vice-president – to fullfil the conditions for a local court judge ? (permanence of office + panel members of the arbitration board)

11. Agreement made in a written form (reasoned decision) • If both parties, especially the trader, agree – binding (the power of an arbitration decision) • The effect of enforceability (final and enforcable) • Could be challenged at the court for certain reasons (illegality, violation of ius cogens, public order) • Nobody can be forced to accept its decision as binding (Art. 23 of the SLO Constitution – the right to judicial protection)

12. Subsidiary application of provisons of the Arbitration Act ??? • If special aribtrations established must be approved by this arbitration board

13. COLLECTIVE CONSUMER PROTECTION • Request for the protection of consumer interests may be filed by a consumer organisation • Requesting that a certain type of advertising be stopped, certain application of general conditions of operation, contract provisions, or business practices be ceased

14. If a detrimental activity affects the position and rights of consumers in another EU member state (cross-border consumer protection) • The request for redress may be filed by an organisation or independent public body (e.g. consumer obmudsman) that is according to the regulation of that state established for the protection of rights and interests of consumers in that state

15. Model procedure • Joint request for redress against the same trader (of more than 50 individual requests) • the same or crucially similar factual situation and legal basis • 1 procedure • Could be less than EUR 40, but more than EUR 10

16. The proposal for an EU Directive

17. EU Commission‘s proposalfor a directive on ADR forconsumerdisputes • Prior to that • Commission‘s recommendations • General mediation directive for civil and commercial cases • To be adopted by the European Parliament and the Council

18. TheRatiofortheDirective • Gaps of coverage, lack of consumer and business awareness, uneven quality of ADR procedures • Especially in the contetxt of cross-border transactions (language barriers, potentially higher costs, differences between member states) • Especially „e-transactions“ (internet)

19. Also a preliminary step to further develop collective ADR procedures within the Union (protecting consumer collective interests)

20. A special role ofthe ECC-Network • European Consumer Centers – assistance for consumers guiding them to ADR entities especially in cases of cross-border disputes • To cooperate with national authorities

21. Monitoringof ADR systemsaccording to theDirective • ADR entities must provide information of their services on their website, must also enable electronic communication • Monitoring of this structure – by a state competent authority

22. The Directive to be transposed in 18 months from the date of its entry into force • The SLO Draft Law to be slightly modified and put into the parliamentary procedure