With legislative Decree no. 130 of 6 August 2015, entered into force on 3 September 2015, Italy has implemented EU Directive no. 2013/11 of 21 May 2013 on alternative dispute resolution (the “ADR Directive”). This instrument is aimed at relieving the EU national Courts’ workload.
The procedures referred to under the ADR Directive relate to any out of court proceedings aimed at resolving national and cross-border disputes between consumers and professionals, both residing and/or established in the European Union. In the spirit of the ADR Directive, a third party (the ADR body) should propose solutions or convene the parties with the purpose of facilitating an amicable settlement of the dispute.
The methods of alternative dispute resolution considered by the ADR Directive are limited to those relying on the intervention of a third party (i.e. arbitration, conciliation, mediation, etc.); direct negotiations between the parties or judge’s endeavors to encourage settlement of the dispute in the context of judicial proceedings are, therefore, excluded.
The purpose of the ADR Directive is to grant consumers the access, on a voluntary basis, to a high-quality, transparent, effective and fair out-of-court mechanism (in any European jurisdiction and regardless of the place of residence) aimed at settling any dispute arising out of a sale and purchase agreement or a service agreement entered into by and between professionals or companies (business to consumer, the so called “B2C”). Disputes arising out of contracts entered into by and between companies (business to business, “B2B”) are, therefore, excluded.
The topic is rather sensitive.
According to European Commission’s surveys, in 2010 one EU consumer out of five has experienced problems in relation to the purchase of goods or services within the EU market. The estimated financial losses amount to 0.4% of EU GDP. The Commission envisages that transparent and efficient ADR instruments may translate into a saving of approximately Euro 22.5 billion per year, equivalent to 0.19% of EU GDP.
As to what concerns Italy, the implementation of the ADR Directive impacts, first and foremost, the Consumer Code (Legislative Decree no. 206 of 6 September 2005). Article 141 of the Consumer Code has been amended to encompass the definition and scope of the new ADR proceedings, while Articles 141-bis to 141-decies have been introduced to properly regulate it.
The newly introduced proceedings operate on a voluntary basis This marks a difference compared to the Italian mandatory mediation and judicial conciliation. Moreover, the decision issued by the ADR body is not binding, thus the parties may be entitled to start ordinary judicial proceedings even when the ADR procedure ends up into an agreement.
Although the ADR procedure may appear non-attractive, this new instrument – at least from a preliminary assessment – seems to be remarkable for a number of reasons.
First, access to ADR procedures shall be now open to anyone: the proceedings shall be free of charge or capped to a very modest amount (established by the ADR body).
Second, article 141-quater sets forth principles of “transparency, effectiveness, equity and freedom”. Under a practical point of view, this means that every ADR body shall ensure that:
- Information relating to ADR proceedings and ADR bodies are public and easy to access;
- Lawyers’ support is not needed (but it is always advisable – “disinterested” author’s note!);
- Proceedings shall conclude within a mandatory 90 days term, from the filing of the application, except for particularly complex disputes, for which the ADR body is entitled to propose time extension as it deem fit;
Parties may always withdraw from the proceedings, with practically no significant consequences.Companies intending to rely on ADR bodies for settling disputes with consumers shall give proper publicity to such intention, also highlighting it in the general terms and condition of their relevant sale and purchase agreements. I think that this may translate into an interesting marketing opportunity: through the endorsement and promotion of this Alternative Dispute Resolution method, companies may raise their profile in terms of “empathy” with consumers’ needs. This would imply that it is likely that companies accepting the ADR procedures would consider the decision issued by the ADR body as “softly binding”, at least. In fact, it may appear contradictory for a company to advertise ADR procedures as a preferred channel for settling disputes with consumers and then appealing the decision issued within such procedure before the ordinary jurisdiction.In conclusion, there is no doubt that the ADR discipline provides consumers with a new additional instrument to resolve disputes with professionals and companies in a reasonable time-frame and at reasonable costs. However, the effectiveness of these procedures that ultimately culminate in non-binding decisions is still to be tested in our legal system.The potential deflationary consequences on national courts’ workload – especially in our jurisdiction – may be extraordinary, especially before the Tribunal entrusted with small claims (i.e. in Italian, Giudice di Pace). However, the European Union should have provided more stringent guidelines to the Member States in relation to binding effects of the decision issued by the ADR bodies (recital 43 of the ADR Directive leaves the Member States ample discretionary power).By way of example, Spain, back in 2008, has introduced the so called “consumer’s arbitration”, which is considered successful. From a procedural standpoint, it features many similarities with the methods introduced by the ADR Directive, apart from one single aspect: the decisions rendered in such arbitrations are binding.
In this respect, those who thought that arbitration would be the format that the ADR Directive would refer to were disappointed as it seems that arbitration has been forgotten along the way.