European Commission Looks for Dispute Resolution System for E-Commerce

BRUSSELS – The European Commission is pushing for systems of alternative dispute resolution to handle consumer problems when trading online. It plans to set up an Internet “e-confidence forum” as a vehicle to do so.

The forum would promote “rapid and effective redress mechanisms” to resolve e-commerce disputes without going to court and at much lower cost, an EC statement issued at the end of March said.

The forum is part of the EC’s “eEurope Initiative,” a proposal put forward at the EU’s Helsinki summit last December by EC President Romano Prodi and discussed at the Lisbon summit March 23-24 (see p. 7).

It also was endorsed at a recent Brussels workshop convened to consider a bushel of studies, reports and research programs exploring the legal and technical requirements for settling disputes online.

At the workshop, commissioner Erkki Lukanen called on the private sector and consumer groups to “work together both in the EU and globally to rapidly deploy online systems which can settle consumer disputes on the Internet.”

“Everybody in Brussels is keen on ADR systems,” said Alastair Tempest, the DM industry’s chief lobbyist here, and “thinks they are the best things since sliced bread.”

What the EC has proposed, Tempest explained, is “a linking of all the equivalents of consumer ombudsmen, fair trading offices, consumer institutes and similar organizations in the member states.

“All these bodies would be linked together in a network so consumers could complain about on- or offline distance selling and have the complaint passed quickly to the relevant organization in the network so it could be pursued vigorously on the national level.”

The idea is to have ADR systems come into play first and leave court action as a matter of last resort. Thus, if a French consumer complained about an offer he received from Luxembourg, French authorities would pass it on.

Luxembourg authorities would then knock on the offending merchant’s door and ask whether they knew they were breaking the law, misleading a consumer or contacting people who have opted out on a French list.

“They would then talk to you and try and persuade you of the error of your ways. If you proved unpersuadable they would go to court,” Tempest said.

He conceded that ADR systems could not be adopted tomorrow since many kinks would have to be knocked out of them first. For example, it is not clear whether consumers give up their rights to sue in court once they are in an ADR.

“So the ADR’s rights would have to be determined first. Can an ADR, for example, tell a consumer, ‘I hear what you are saying but your complaint is not valid so don’t bother taking it to anyone else.'”

The EC also has a number of other initiatives in the works to encourage ADR development:

• The proposed directive on e-commerce contains provisions to block member state laws from hampering “the use of out-of-court schemes for dispute settlement.”

The EC plans to set up a cross-border complaint network in financial services, building on existing national schemes. It would work together with members’ “national financial services redress bodies.”

• The commission is thinking of co-financing pilot projects to deploy cross-border online dispute settlement systems in the context of ongoing research programs.

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