Alternative dispute resolution and consumer disputes : improving European consumer confidence and access to justice

Abstract

Consumers in today's world have been blessed with the possibility of purchasing goods and services even if these are not readily available in their own city or country. Catalogue services and internet transactions are just some of the ways in which consumers from one territory may conclude a contract of sale without having actual physical contact with the seller. Today, consumer disputes relate to both contractual, that is the service provision based on a contract, or non-contractual, that is, a service not directly linked to a contractual agreement with the party who receives the service, such as, advertising aimed at consumers. The latter form of service provision has increased through the use of the Internet and has caused several complicated legal issues on a national basis, let alone within a Community framework. Of course, it is certainly in the Commission's interest that consumers and traders are instilled with a certain degree of e-Confidence. The future of the internal market lies in the possibilities of contracting online and thus reducing further the barriers that exist between Member States. The Commission has realised that unless there is a secure and flexible method of contracting at a distance, the internal market will fail to adapt to the needs of the consumers and in time fail to be the example par excellence of inter-state co-operation and integration - The Commission has recognised that the success of the single market lies in the hands of the consumer! Yet, the immense possibilities that internet or distance selling opens both for traders, as well as for the consumer, is shaded with insecurities such as invasion of privacy, illegal, harmful, offensive content or misleading advertising and intellectual property rights infringements and of course, access to justice. The Commission had recognised this issue some time ago and felt that the time had come to address the problem. In fact, the particular issue of trans border consumer disputes and their resolution remained a thorn in the side of the e-confidence campaign that the DG Health and Consumer was trying to conclude. The European Commission was not only faced with the issue of balancing the rights of the consumer and those of the trader, but also that of respecting the issue of the principle of subsidiarity with the Member States. Issuing a directive on the private international law issues of trans border consumer disputes would have created several political and legal issues that the Commission wanted to avoid. Therefore, it went for the benchmarking approach and concluded that both consumers and traders are more willing to resolve their disputes in a confidential and inexpensive manner. Statistics showed that cross-border litigation was far too costly to instil the required confidence in the consumer. The Commission laid down its proposal in a 1998 Communication, proposing a system of out-of-court dispute settlement for consumers. This would be done through a co-ordinated network of dispute settlement bodies that had similar procedures and consumers would have easy access to these bodies. This thesis aims at discussing the problems of consumer access to justice with particular reference to the online arena. Access to justice for consumers has always been troublesome, however, the single market consumer is dealing with various different legal systems and jurisdictions. The Private international law rules in the European Union do provide a safety guard yet they do not envisage that small claims are usually the subject matter of consumer claims and traditional court procedures are too costly. After discussing and analysing the consumer protection measures available in the Community for cross border disputes, the following chapters will examine alternative dispute resolution (ADR) in its traditional forms, and eventually outline the recent development of on-line dispute resolution (ODR). The concluding chapter will critically assess the benefits of ADR and ODR for consumers in the single market, as well as their advantages over the traditional court systems it will also discuss any possible improvement to the existing ODR systems available for consumers and initiated as a pilot project of the European Commission.