adr, consumer adr, odr

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ADR, Consumer ADR, ODR Christopher Hodges Head of the CMS/Swiss Re Research Programme on Civil Justice Systems, Centre for Socio-Legal Studies, University of Oxford Life member, Wolfson College, Oxford Erasmus Professor of the Fundamentals of Private Law, Erasmus University, Rotterdam Solicitor of the Superior Courts of England and Wales

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ADR, Consumer ADR, ODR. Christopher Hodges Head of the CMS/Swiss Re Research Programme on Civil Justice Systems, Centre for Socio-Legal Studies, University of Oxford Life member, Wolfson College, Oxford Erasmus Professor of the Fundamentals of Private Law, Erasmus University, Rotterdam - PowerPoint PPT Presentation

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Page 1: ADR, Consumer ADR, ODR

ADR, Consumer ADR, ODR

Christopher Hodges

Head of the CMS/Swiss Re Research Programme on Civil Justice Systems, Centre for Socio-Legal Studies, University of Oxford

Life member, Wolfson College, Oxford

Erasmus Professor of the Fundamentals of Private Law, Erasmus University, Rotterdam

Solicitor of the Superior Courts of England and Wales

Page 2: ADR, Consumer ADR, ODR

Comprehensive EU coverage for Consumer ADR

Directive 2013/11 on alternative dispute resolution for consumer disputes and amending Regulation (EC) No 2006/2004 and Directive 2009/22/EC (Directive on consumer ADR)’.

Regulation (EC) No 534/2013 on online dispute resolution for consumer disputes (Regulation on consumer ODR)

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Classic ADR

1. The context is usually civil procedure

2. Typically mediation1. Before the procedure, eg English pre-action protocols2. During the procedure

3. Advantages: informal; parties own the process, the negotiation and the solution; confidential so can make admissions; flexible outcomes; can restore trust or relations

4. Disadvantages: transparent justice? Contribution to clarification of law? Independence of third party?

C Menkel-Meadow, Dispute Resolution: Beyond the Adversarial Model (2005; 2nd ed. 2011); C Menkel-Meadow, ‘Dispute Resolution’ in Cane & Kritzer, The Oxford Handbook of Empirical Legal Research (Oxford, 2010); and many others

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ADR - EU Mechanisms Council Resolution of 25 May 2000 on a Community-wide network of national

bodies for the extra-judicial settlement of consumer disputes, [2000] O.J. C 155/1 Commission Recommendation 98/257/EC on the Principles Applicable to the

Bodies Responsible for Out-of-Court Settlement of Consumer Disputes, [1998] OJ L 155/31

Commission Recommendation 2001/310/EC on the Principles for Out-of-Court Bodies involved in the Consensual Resolution of Consumer Disputes, [2001] OJ L 109, 56-61

Financial Services Complaints Network, FIN-NET, 2001 European Code of Conduct for Mediators, 2004 Commission Directive 2008/52/EC of the European Parliament and of the

Council of 21 May 2008 on certain aspects of mediation in civil and commercial matters, [2008] O.J. L 136/3

Consultation paper on the use of Alternative Dispute Resolution as a means to resolve disputes related to commercial transactions and practices in the European Union (European Commission, January 2011)

Directive of the European Parliament and of the Council on alternative dispute resolution for consumer disputes and amending Regulation (EC) No 2006/2004 and Directive 2009/22/EC (Directive on consumer ADR), 2013/11/EU

Regulation 524/2013 of the European Parliament and of the Council on online dispute resolution for consumer disputes (Regulation on consumer ODR), 2013

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Measures that encourage Member States

to establish ADR schemes

Distance Marketing of Financial Services Directive 2002/65/EC

Timeshare Directive 2008/122/EC

E-commerce Directive (EC) 2000/31

Postal Services Directive EC) 2008/6 amending 97/67/EC

Insurance Mediation Directive 2002/92/EC

Markets in Financial Instruments Directive (MiFID) (EC) 2004/39 on markets in financial instruments amending 85/611/EEC, 93/6/EEC and 2000/12/EC and repealing 93/22/EEC

Page 7: ADR, Consumer ADR, ODR

Measures that require Member States

to establish ADR schemes

Directive (EC) 2009/136 amending Directive 2002/22/EC on universal service and users’ rights relating to electronic communications networks and services

Directive (EC) 2009/72 concerning common rules for the internal market in electricity and repealing Directive 2003/54/EC, [2009] OJ L211/55; and Directive (EC) 2009/73 concerning common rules for the internal market in natural gas and repealing Directive 2003/55/EC

Directive (EC) 2008/48 on credit agreements for consumers

Directive (EC) 2007/64 on payment services in the internal market amending Directives 97/7/EC, 2002/65/EC, 2005/60/EC

Regulation (EU) No 181/2011 on bus and coach passenger rights [complaints function either in house or external; also complaints and enforcement authority]

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The Vision for CDR

1. Improving access to Justicea) Claims values are low

b) Consumers’ attitudes to cost proportionality

c) Cost to consumers

d) Duration

e) User-friendliness and accessibility

2. Providing consumer advice, to underpin informed purchasing

3. Enabling the CDR system to deliver regulatory output and raise trading standards

4. Responding to consumer issues

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France Telecoms: 3 Insurance: 3 - 6 Banks: 6   GDF/SUEZ: 2 Travel: 2 - 4

National Energy

mediator: 6

Germany Telecoms: 4 Insurance:4.1 Banks: no data     Travel: 3

Poland Telecoms: no data Consumer arbitration

tribunals: 0.5 - 2

Banking: 1.1 Trade inspection

consumer: no data

Energy: no data

 

Spain Telecoms: no data Insurance /pensions: 4

Banking: 4-6 Investment: no data

Energy: 2  

UK Telecoms: 6 or less Pensions: 10.9 Banks/Insurance: 2.2 FLA: 2 Energy: xx Travel: 2-2.5

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Sweden

Trader

Information Dispute

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Main economic sectors concerned by complaints Percentage

Transport, of which:-Air transport (including problems with luggage)-Car rental

32.1%21.6%3.4%

Timeshare related products and package holidays 7.4%

Recreational, sporting and cultural services 7.0%

Furnishing, household equipment and routine household maintenance 6.8%

Audio-visual, photographic and information processing equipment 5.6%

Health 5.1%

Communication 4.7%

Clothing and footwear 4.5%

Hotels and restaurants 4.5%

Personal care goods and services 3.0%

Financial services and insurance 2.5%

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  2007 2008 2009 2010 2011 2012

Contacts 50.930 62.569 60.755 71.292 70.207 72.067

Complaints 24.810 26.674 27.601 28.927 26.909 32.197

Information requests

22.284 29.243 25.875 27.060 28.108 26.399

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The added value of CDR

More attractive and cheaper for users than courts

Regulation of market behaviour: capture of complaint data aggregation identification of issues and trends publication enable regulatory action

Collective redress by CDRs + Regulators Swifter identification of a systemic issue Application of a generic solution

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Three Pillar Model of Enforcement

ADRPublic Regulation

Private Litigation

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Proposition

1. The central pathways for C2B dispute resolution in Europe will be new CADR/CDR/ODR

2. Regulatory oversight of compensation as part of enforcement of compliance

3. Courts (and lawyers) will have a residual and more restricted role

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Commission CDR 2013 Legislation

1. Gaps in coverage• Sectors• Member States

Fill gaps by mandatory horizontal coverLessons from Netherlands/Nordic unified modelODR platform

2. Lack of awareness How increase usage? visibility and adherence: National, EU and global umbrellas

3. Variation in qualityQuality principles (the 2 recommendations) and regulatory scheme with national competent authorities

4. ODR Platform

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How to achieve the objectives?

1. The primary principle: Consumer ADR (‘CDR’) must be effective (art 8).

2. Quality principles must be respected. a) CDR entities must be expert, independent and impartial (art 6.1). b) CDR entities that do not meet the standards must be improved or

closed (arts 18-20). c) National competent authorities (‘NCAs’) overseeing CDR entities

must be effective. d) Data on the operation of CDR entities should be published (art 7).e) There should be agreement and clarity on which rules are being

applied (art 7.1.1), i.e. law, fairness, equity, terms and conditions, etc.

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Anticipating criticism

1. Unconstitutional

2. Blocks access to courts

3. Private justice bodies

4. Inconsistent decisions

5. Expense of regulating private bodies

6. Some business sectors don’t need CDR

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Criteria for democratic acceptance of

Dispute Resolution Procedures

The right to access to justice and to a fair trial: Art 6 ECHR

The right to an e ective remedy and to a fair trial: Art ff47 EUCFR

Commission Recommendation (EC) 98/257/EC on the principles applicable to the bodies responsible for the out-of-court settlement of consumer disputes, [1998] OJ L 115

Commission Recommendation (EC) 2001/310 on the principles for out-of-court bodies involved in the consensual resolution of consumer ADR, OJ L 109 56

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Modes: Historical Evolution of Models

Courts: Procedural Justice

Arbitration: panels of 3 Spain Nordic Consumer Complaint Boards Netherlands Geschillencommissie UK Self-regulatory systems (Codes) and hybrids

Mediation: French médiateurs: in ministries/regulators and companies

Public Ombudsmen (privatised, regulated industry sectors) and/or private sector Ombudsmen: single case handlers and ombudsmen

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Techniques: an escalating pyramid

Adjudicationbinding or

non-binding

Adjudicationbinding or

non-binding

Mediation/ConciliationMediation/Conciliation

Refer to Third Party:Triage

Refer to Third Party:Triage

Direct contactConsumer - trader

Direct contactConsumer - trader

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GCSGCS

Netherlands Model

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Three Tiers

1. Traders: encouraged to respond to customer feedback

2. CDR: a seamless service to users:a) Residual CDR functionb) Sectoral specialist CDRs funded by business

3. Enforcers: linked in, with behavioural and redress powers

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Conclusion

CDR is good for consumers, traders, markets, and economic prosperity

We need to make it work

Governments and ombudsmen and enforcers need to make the right design choices now