A recent EUCJ judgment reminds that sellers are required to set out details of the ADR body in their website T&C.

Our Lexing UK member tells you more about this decision.

In a recently issued judgment (Bundesverband der Verbraucherzentralen v Deutsche Apotheker-und Ärtzebank eG (Case C-380-19) (25 June 2020), the EU Court of Justice (“EUCJ”) has confirmed the obligation imposed on traders selling goods or services online to consumers under the ADR Directive (2013/11/EU) (the “ADR Directive”) that requires sellers to set out in their website terms and conditions, details of the approved Alternative Dispute Resolution (ADR) body that will deal with the consumer’s complaints.

Scope of current regulations

Alternative dispute resolution (“ADR”) offers a simple, fast and low-cost out-of-court solution to disputes between consumers and traders. ADR between consumers and traders is regulated by two EU instruments:

  • -“Directive 2013/11/EU on alternative dispute resolution for consumer disputes  of 21 May 2013 (ADR directive)”: The main purpose of the ADR Directive is to make sure consumers can easily find which approved ADR bodies are qualified to deal with their complaint and be informed as to whether or not the trader will participate in the ADR process. Article 13.1 of the ADR Directive states that if a trader operates a website, it is required to provide in the relevant terms and conditions the name and website of an approved ADR body in their business sector and advise consumers if they will engage in the ADR process. Article 13.2 further states that where the trader operates a website, the above-mentioned information must be included in the general terms and conditions available on that website.
  • -The Online Dispute Resolution (ODR) system Regulation No. 524/20131 of 21 May 2013 : The Regulation sets up a European ODR platform for disputes which arise from the sale of goods or the supply of services online. It also makes it mandatory for online traders to include an easily accessible link to the EU’s ODR system on their websites. Should a dispute be submitted through this system, the ODR platform will then, among other things, provide a list of recommended ADR bodies, which the parties can actually disregard altogether. While online traders are legally compelled to connect to the ODR system from their website, they are not obliged to collaborate with a consumer who initiates a complaint through the ODR platform, calling into question the very effectiveness of the system which relies on the mutual consent of the parties.
Relevance of the EUCJ ruling

The case C-380-19 brought before the EUCJ by a German court, analysed whether or not it was enough for a trader, whose contracts are not entered into via its website, to include the details of the approved ADR body in other documents made available on its website, rather than in the website terms and conditions themselves, or in a standalone document provided to the consumer at the time of signing the contract.

A German cooperative bank operates a website via which no contracts are concluded. The website’s legal notice contains information on the bank’s willingness or obligation to take part in a dispute resolution procedure before a consumer conciliation body. In addition, it is possible to download from that website the general terms and conditions of the contracts that the banks concludes with consumers. Those terms and conditions contain no information on the bank’s willingness or obligation to take part in such a dispute resolution procedure. If the bank concludes with a consumer a contract subject to the terms and conditions, the consumer receives, in addition to the document containing the said general terms and conditions, a list of prices and services also drawn up by the bank, on the reverse of which it provides information on its willingness to take part in a dispute resolution procedure.

According to a German consumer association, under Article 13 of the ADR Directive, the bank had to communicate information on ADR directly in the terms and conditions appearing on the website by the mere fact that those general terms and conditions are available for download on the website. In those conditions, the German judge seeks guidance as to the interpretation of Article 13 and referred questions to the EUCJ for a preliminary ruling

The language of Article 13 was deemed by the EUCJ to be clear-cut since it unequivocally specifies that the information about the ADR entity must be provided in the general terms and conditions, where they are published on the trader’s website, and not in other documents available on or from the website.

“a trader who provides in an accessible manner on his website the general terms and conditions of sales or service contracts, but concludes no contracts with consumers via that website, must provide in his general terms and conditions information about the ADR entity or ADR entities by which that trader is covered, when that trader commits to or is obliged to use that entity or those entities to resolve disputes with consumers. It is not sufficient in that respect that the trader either provides that information in other documents accessible on his website, or under other tabs thereof, or provides that information to the consumer in a separate document from the general terms and conditions, upon conclusion of the contract subject to those general terms and conditions.”

The fact that the trader in question included the details of the approved ADR body up until the conclusion of a contract was also found by the EUCJ to be in contravention of Article 6(1) of the Consumer Rights Directive (2011/83/EU). Such article clearly states that traders must inform consumers of their possible recourse to an out-of-court complaint and redress mechanism before being bound by a contract (save for on-premises sales).

UK-EU transition period and beyond

During the transition period, it will still be compulsory for any UK enterprise selling goods or services online to EU counterparts and vice versa, to duly inform consumers of the ODR platform, and where applicable, the sector specific ADR body.

If at the end of the transition period no deal is struck between the UK and the EU, online traders will no longer be required to connect nor have access to the EU’s ODR system.

However, the requirements examined in this case will still apply, as the bulk of rights and obligations will remain regulated by domestic legislation (i.e. the Alternative Dispute Resolution for Consumer Disputes (Competent Authorities and Information) Regulations 2015, which implemented the requirements of the ADR Directive into UK law), meaning a continuing requirement to appoint a UK ADR body.

Key points online traders should consider on their digital sales platforms

In light of the above, businesses need to:

  • -Check if they are bound to provide an ADR option to their consumer customers;
  • -If so, make sure adequate ADR information is included in their website Ts&Cs; and
  • -Ensure that the ADR is available to its customers. This may require formally onboarding with an approved ADR provider depending on the sector.

Read the full article, with a focus on the Telecoms framework, on Lexing UK‘s website (Preiskel & Co): https://www.preiskel.com/selling-online-to-consumers-you-should-read-this-preiskel-co-note-on-the-recent-eu-court-of-justice-ruling-which-confirms-the-requirement-to-include-details-of-approved-adr-bodies-in-website-terms/