Alternative Dispute Resolution


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Presentation to Dublin Chamber of Commerce on Alternative Dispute Resolution by Lynnsey Delaney of the European Consumer Centre.

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Alternative Dispute Resolution

  1. 1. European Consumer Centre Lynnsey Delaney [email_address] Dispute Resolution Advisor
  2. 2. European Consumer Centre <ul><li>WHO ARE WE? </li></ul><ul><li>Part of a network of 29 countries, located throughout the EU and the EEA </li></ul><ul><li>Funded and run by the European Commission, DG Health and Consumers, and national co-funders </li></ul><ul><li>In the Republic of Ireland this is the National Consumer Agency </li></ul>
  3. 3. European Consumer Centre <ul><li>WHAT WE DO: </li></ul><ul><li>Information on EU and national consumer legislation to EU citizens </li></ul><ul><li>Advice on cross-border consumer transactions </li></ul><ul><li>Assistance with cross-border complaints </li></ul><ul><ul><li>Liaison directly with company on the consumer’s behalf </li></ul></ul><ul><li>Promotion – raising awareness of consumer rights nationally </li></ul><ul><li>Input into EU consumer policy – consultations and questionnaires sent to the European Commission </li></ul><ul><li>Input into consumer policy nationally – e.g. Car Rental Report </li></ul>
  4. 4. European Consumer Centre <ul><li>WHAT WE DON’T DO: </li></ul><ul><li>Engage in Irish-Irish disputes. </li></ul><ul><ul><li>National B2C disputes are dealt with by the NCA </li></ul></ul><ul><li>Engage in non-consumer issues </li></ul><ul><ul><li>Consumer legislation does not apply to B2B transactions </li></ul></ul><ul><ul><li>Or where individual may not be business but is acting in the course of trade </li></ul></ul><ul><li>Engage in financial services disputes </li></ul><ul><ul><li>SOLVIT/Financial Services Ombudsman </li></ul></ul>
  5. 5. European Consumer Centre <ul><li>OUR OBJECTIVE : </li></ul><ul><li>To increase consumer confidence in the Internal Market . </li></ul><ul><li>HOW : </li></ul><ul><li>Show consumers that if they have a cross-border complaint it will be heard and resolved – in this regard Alternative Dispute Resolution (ADR) has an important role to play </li></ul>
  6. 6. What is ADR?? <ul><li>Umbrella term to describe a variety of methods of resolving a dispute without going to court </li></ul><ul><li>Includes: </li></ul><ul><li>Arbitration </li></ul><ul><li>Conciliation </li></ul><ul><li>Mediation </li></ul><ul><li>Online Dispute Resolution (ODR) </li></ul><ul><li> </li></ul>
  7. 7. ADR Processes <ul><li>Arbitration: </li></ul><ul><li>Independent third party, chosen with the agreement with the disputing parties, who hears both sides in a dispute, and makes a decision, which in most cases is legally binding </li></ul><ul><li>Conciliation: </li></ul><ul><li>Involves building a positive relationship between the parties to a dispute by seeking guidance from a neutral third party, who often plays a more active role in developing and proposing the terms of settlement </li></ul>
  8. 8. ADR Processes <ul><li>Mediation: </li></ul><ul><li>Based on the principle that people can resolve their own disagreements if given the right support. The role of the mediator is to facilitate co-operation between the parties and to assist them in reaching a mutually acceptable decision </li></ul><ul><li>Online Dispute Resolution: </li></ul><ul><li>Uses technology to facilitate the resolution of disputes – particularly suitable for cross-border disputes </li></ul>
  9. 9. Governing Principles of ADR <ul><li>Independence & Impartiality </li></ul><ul><li>Transparency </li></ul><ul><li>Fairness & Audi Alteram Partem </li></ul><ul><li>Effectiveness </li></ul><ul><li>Confidentiality </li></ul>
  10. 10. Benefits of ADR for Businesses <ul><li>ADR offers many advantages: </li></ul><ul><li>Saves time </li></ul><ul><li>Often costs less money than traditional litigation </li></ul><ul><li>Assists in preservation of relationships </li></ul><ul><li>Greater Privacy </li></ul><ul><li>Participation or membership of an ADR scheme can increase consumer confidence in a particular trader/industry </li></ul>
  11. 11. Current Situation in Europe <ul><li>750 ADR schemes in field of business-to-consumer disputes </li></ul><ul><li>64% of ADR’s are voluntary </li></ul><ul><li>Only 9% of European retailers have used an ADR scheme </li></ul><ul><li>Only 6% of traders are members of an ADR schemes </li></ul>
  12. 12. Obstacles preventing ADR’s development <ul><li>Lack of awareness about ADR schemes </li></ul><ul><li>Fragmented development of schemes </li></ul><ul><li>- both geographically and sectorally (often schemes are industry specific) </li></ul><ul><li>Fear that participating in ADR schemes may be a sign of weakness </li></ul><ul><li>Lack of confidence as to what tangible benefits could be obtained from participation </li></ul>
  13. 13. Recent European Developments in ADR <ul><li>Consultation Paper on the use of ADR as a means to resolve disputes related to commercial transactions and practices in the European Union </li></ul><ul><li>Sought responses to a number of issues, in particular: </li></ul><ul><ul><li>How to raise awareness about ADR? </li></ul></ul><ul><ul><li>Should adherence to schemes be mandatory? </li></ul></ul><ul><ul><li>Should ADR decisions be binding on the parties? </li></ul></ul>
  14. 14. How to raise awareness about ADR?? <ul><li>Creation of a “single point of contact” in each Member State which could signpost individuals to existing ADR schemes and would ideally have a team of case handlers that would deal with disputes where no specific scheme exists </li></ul><ul><li>Given complexity of some matters might be desirable to have sectoral-specific commissions within the single point of contact </li></ul>
  15. 15. How to raise awareness about ADR? <ul><li>ECC Ireland considers that businesses should be required to inform consumers when they are part of an ADR scheme </li></ul><ul><li>Most likely beneficial time: pre-contractual or contractual phase </li></ul><ul><li>Would ensure that potential consumers are aware that the trader has a detailed procedure in place to deal with complaints & gives additional confidence in the trader </li></ul>
  16. 16. How to raise awareness about ADR? <ul><li>Professional Legal Training </li></ul><ul><li>-Important that legal profession be in a position to advise disputants of the full spectrum of dispute resolution processes available to them </li></ul><ul><li>-Possible introduction of mandatory courses within legal professional training courses </li></ul><ul><li>Mediation and Conciliation Bill </li></ul><ul><li>- Solicitor has duty to advise client prior to initiating any civil or commercial proceedings to consider mediation prior to commenting civil/commercial proceedings and to sign a certificate that this has been done </li></ul>
  17. 17. Should participation be mandatory? <ul><li>Traditional approach has always been that ADR schemes should be voluntary </li></ul><ul><li>Recently move towards the view that voluntariness can not be examined in isolation – imposition of cost sanctions </li></ul><ul><li>R Cowl v Portsmouth City Council </li></ul><ul><li>- Held court may of its own initiative fix a hearing at which the parties could be made to give an explanation as to what they would have to do to resolve the matter without recourse to the courts </li></ul>
  18. 18. Should participation be mandatory? <ul><li>Dunnett v Railway Track </li></ul><ul><li>- UK Court of Appeal refused to award costs against the successful claimant because the Defendant refused to consider ADR processes despite a recommendation to do so </li></ul><ul><li>In the aftermath of Dunnett, there was a significant increase in the uptake of mediation but also a steady decline in its success rate </li></ul><ul><li>(Genn, Twisting Arms: Court Referred and Court Linked Mediation under Judicial Pressure) </li></ul>
  19. 19. Should ADR decisions be binding on the parties involved? <ul><li>ADR procedures often lead to non-binding recommendations </li></ul><ul><li>Is frustrating for victorious side if in these instances the other side decides not to comply with the decision </li></ul><ul><li>ECC Ireland suggests ADR decisions should be binding on the trader, not on the consumer </li></ul>
  20. 20. Notified ADR Schemes in Ireland <ul><li>Advertising Standards Authority of Ireland </li></ul><ul><li>The Financial Services Ombudsman’s Bureau </li></ul><ul><li>The Office of the Pensions Ombudsman </li></ul><ul><li>Scheme for Tour Operators </li></ul><ul><li>Direct Selling Association of Ireland </li></ul>
  21. 21. Thanks for your time and attention! Any Questions: [email_address]