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Online dispute resolution – what you need to know

Companies which sell goods or services online need to take account of new EU regulations on resolving disputes with customers.

What is new?

The regulations impose obligations on all retailers that have an online retail presence. Our previous newsflash on the new regime can be found here.

To recap, the Online Dispute Resolution (ODR) platform provides a single point of entry that allows EU consumers and traders to settle their disputes regarding all types of online purchases, both domestic and cross-border. This is achieved by directing the disputes to national Alternative Dispute Resolution (ADR) bodies connected to the ODR platform.

The platform aims to allow consumers and traders to settle their online disputes “at the click of a mouse…without the need to go through lengthy and costly court proceedings”, according to the European Commission.

How does the system work?

When consumers and traders lodge a complaint, the dispute resolution bodies will act as a neutral third party between the consumer and trader to resolve the issue.

The Commission highlights the following features of the ODR platform:

  • It is accessible on all types of devices; consumers can fill out the complaint form on the platform in three simple steps;
  • It offers users the possibility to conduct the entire resolution procedure online; and
  • It is multilingual; a translation service is available on the platform to assist disputes involving parties based in different European countries.

What do companies need to do?

All online retailers now need to include a link to the ODR platform on their websites.

However, while a link to the platform must be included, retailers are not forced to choose this route to resolve disputes with customers.

Why is this important?

According to research undertaken by the European Commission, 40% of traders do not know about ADR and only 30% are willing to use it.

The online platform aims to strengthen trust in online purchases by offering a streamlined, uncomplicated process for traders and consumers to access redress.

It is intended to deal with smaller scale matters rather than large scale commercial disputes.

What happens if companies don’t comply?

If a business fails to comply with the new information requirements by including a link to the ODR on its website, it could be liable to Trading Standards civil enforcement action. This could result in an order from the court requiring the business to comply with the requirements of the Regulations, an unlimited fine and up to two years in prison.

How can Ward Hadaway help?

For further information on what your business needs to do to comply with the new regulations or on any other issue raised by this update, please get in touch.

Please note that this briefing is designed to be informative, not advisory and represents our understanding of English law and practice as at the date indicated. We would always recommend that you should seek specific guidance on any particular legal issue.

This page may contain links that direct you to third party websites. We have no control over and are not responsible for the content, use by you or availability of those third party websites, for any products or services you buy through those sites or for the treatment of any personal information you provide to the third party.

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