A new Online Dispute Resolution Platform (ODR Platform) is being set up by the European Commission to provide online traders and consumers in the EU with a simple, cost-effective out of court solution to resolving disputes arising from online transactions.
The establishment of the ODR Platform will particularly benefit consumers in disputes arising from cross-border transactions in the EU and stems from the European Commission’s initiative to boost growth and strengthen consumer confidence in the digital single market.
The ODR Platform was introduced to the UK on 9 January 2015 and is expected to go live from 15 February 2016 via the website here: http://ec.europa.eu/odr.
Disputes submitted by consumers via the ODR Platform will be managed entirely online by an approved Alternative Dispute Resolution (ADR) provider, and a decision should be reached by that ADR provider within 90 days. Unless the trader operates in a regulated sector (such as financial services or telecoms) or is committed to ADR as a condition of membership of a trade or professional body, neither the consumer nor the trader is required to use ADR to settle a dispute, but it is hoped that the potential benefit to improve consumer relations will encourage traders to do so.
Obligations on online traders and marketplaces
The UK ODR regulations impose a number of obligations on online traders (who sell goods, services or digital content via their website) and online marketplaces (such as eBay) to inform consumers about the ODR Platform. In particular, online traders and marketplaces must:
- inform consumers about the existence of the ODR platform and the possibility of using the ODR Platform for resolving disputes;
- provide a link to the ODR Platform on their website and in any offers made to consumers by email (e.g. special offer emails);
- provide similar information in their website terms and conditions; and
- provide an e-mail address on their website so that consumers have a first point of contact.
Penalties
UK Trading Standards may seek a court order against any online trader or marketplace not complying with these requirements. Failure to comply with a court order could result in a potentially unlimited fine, or up to a maximum of 2 years’ imprisonment.
Next Steps
Online traders should take steps as soon as possible to update both their websites and terms and conditions in order to comply with the ODR regulations. With a number of recent changes in consumer-related law, this is also a good opportunity for traders to carry out a health check of all their online legal documents.
This article should not be taken as definitive legal advice on any of the subjects covered. If you do require legal advice in relation to any of the above, please contact Chris Pulham as above.
