European Commission proposes online dispute resolution service

The European Commission wants member states to introduce online alternative dispute resolution (ADR) schemes consumers can use when in dispute with traders.

The Commission is concerned about an absence of ADR schemes in some market sectors. It also said the lack of information available to both traders and consumers about ADR schemes needed to be addressed.

John Dalli, EU Health and Consumer Commissioner, said: "All EU consumers should have at their disposal a simple, quick and inexpensive way to resolve their disputes with traders."

ADR is a voluntary alternative to using the courts to settle civil disputes. Principal methods in the UK are arbitration, conciliation and mediation. The EC launched a consultation on ADR schemes in January and in its statement said online ADR schemes should be put in place; especially to help boost confidence in cross-border trading.

The UK has strong ADR representation for the telecommunications industry with Cisas and the Ombudsman Services: Communications (formerly Otelo). However there is little information about ADR schemes for consumers in other sectors such as electrical and electronic goods.

Cisas and Ombudsman Services are free to consumers and the Commission wants any such ADR schemes to be free or low cost for claimants.

In a statement the Commission said: "An initial administrative fee on the consumer would be justified where linked to a required technical expertise or to the high value of the dispute in some specific sectors. This could then be refunded to the consumer if the ADR outcome is in his favour."

However, while welcoming the interest in setting up more ADR for consumers, Jill Johnstone, international director at Consumer Focus which contributed to the EC consultation, warned that there is a danger of overselling such schemes.

'We feel ADR needs balanced promotion so everyone knows exactly what it can and can't deliver. ADR can be a lottery and if people are to trust the process, it needs to be more consistent, effective and efficient, especially in international cases," she said.

The Commission is expected to propose new laws on ADR methods in November.