Head of Representation of the European Commission in the United Kingdom Jacqueline Minor yesterday set out a new vision for consumer dispute resolution across Europe, arguing that the failure to tackle unresolved disputes between consumers and business costs the UK tax payer 0.4% of GDP.
The comments were part of her Keynote Speech at an Oxford conference organized by the Centre for Socio-Legal Studies in association with the Foundation for Law, Justice and Society, at which researchers proposed a new blueprint to resolve disputes between consumers and business more quickly and fairly.
The proposals constitute a response to an EU Directive which requires all member states to improve the handling of small claims brought by consumers across Europe, by implementing consumer dispute resolution mechanisms by 2015. The Directive sets out minimum standards for effectiveness, fairness, transparency, and independence of the systems adopted, but the implementation of these measures has yet to be fully determined.
Currently, disputes over small claims between consumers and business are dealt with by the small claims courts, where they often languish unresolved, and the new measures will provide a more effective means through which consumers can pursue their claims. The new system will also improve the consistency of decisions across Europe and provide a more efficient and cost-effective means of dispute resolution for business and consumers alike.
Professor Christopher Hodges from the Centre for Socio-Legal Studies unveiled the proposals today at an international conference held at Wolfson College that brought together policymakers, ombudsman, academics, and business groups. Describing the plans, Professor Hodges said that the new system could constitute a major reengineering of the legal system across Europe, by combining existing public regulation with new alternative dispute regulation mechanisms.
Jacqueline Minor, Head of Representation of the European Commission in the United Kingdom opened the conference with a Keynote Speech outlining the advantages of consumer ADR in Europe. She argued that alternative forms of redress could help empower consumers and produce a vibrant, well-functioning market, and, along with consumer education and competition policy, forms part of the toolkit for policymakers in addressing this issue.
Describing the extensive evidence-based research conducted through surveys in consumer markets, she demonstrated that unsatisfactorily resolved disputes cost consumers and business 0.4% of GDP in the UK. “This 0.4% could have been redistributed to responsible businesses, rather than into the pockets of businesses who had, in some way or another, failed their customers.”
The new model will provide a coherent framework to harmonize ADR systems across EU member states, which will be crucial to its success. With an increasing amount of commerce conducted online across national borders, a consistent approach will be essential to enhance consumer confidence and effectively enable consumers to pursue claims against businesses in different jurisdictions. Another advantage of the new scheme, Minor argued, is that, whilst small claims courts are slow to deal with disputes and unresponsive to the needs of users, under the new proposals, disputes will be recorded and monitored over the long term, so that the service can be continually improved. "In addition to providing solutions to individual disputes, the ADR scheme also acts a mechanism for providing data on how the market functions and misfunctions, in order to make recommendations to traders and trade bodies."
Professor Christopher Hodges and Christoph Decker from the European Commission Directorate General for Health & Consumers (DG SANCO) chaired a question and answer session to enable participants to give their views on the implementation of the EU Directive on ADR. Having taken questions on how the process could be improved, Mr Decker responded that the important aspect of implementation will be ensuring consumer confidence and incentivising businesses to improve their internal processes to resolve cases before they go to ADR. He concluded that, “Consumer ADR can have significant impacts on market behaviour and become a very beneficial piece of legislation.”
The conference represents the first time that key stakeholders have come together on this issue, and will be the first of an annual series of conferences that will enable policymakers to continue to monitor the implementation of the legislation over the coming years. It forms part of the CSLS/FLJS programme on European Civil Justice Systems which encompasses a comparative examination of procedural, funding and other mechanisms within civil justice systems, including alternative dispute resolution systems.
A summary of the conference and transcript of Professor Christopher Hodge's speech are available to download from the top-right of this page, along with podcasts of the speeches by Jacqueline Minor and Professor Hodges and the conference policy briefing, Implementing the EU Consumer ADR Directive.