Alternative dispute resolution in e-commerce and brick-and-mortar retail – new information requirements as of 1 February 2017

All online traders have already been obliged since 9 January 2016 to provide a link on their websites to a dispute resolution platform provided by the EU Commission (the “ODR Platform”) if they at least also sell goods or services to consumers. This obligation is based directly on the EU Regulation on online dispute resolution for consumer disputes (Regulation (EU) No. 524/2013, ODR Regulation).
Noerr reported on this: Online dispute resolution in consumer matters, ADR Online | New Information Obligations in E-Commerce

Additional obligations come into force on 1 February 2017. Unlike the obligations based on the ODR Regulation, these also apply to purely brick-and-mortar traders. Facilitation measures only affect companies which on 31 December of the preceding year did not employ more than ten people and are not obliged by law to participate in dispute resolution proceedings before a consumer dispute resolution body or have subjected themselves voluntarily to such dispute resolution. Even such companies must, however, fulfil at least some of the obligations.

The new obligations are based on Sections 36 and 37 of the German Consumer Dispute Resolution Act (Verbraucherstreitbeilegungsgesetzes – VSBG). Directive 2013/11/EU on alternative dispute resolution for consumer disputes has been implemented with the German Consumer Dispute Resolution Act. The German legislator has, however, clearly exceeded the requirements of the Directive. Other EU Member States have to include similar obligations in their national legislation, but the obligations can vary from country to country in terms of their content.

Which national dispute resolution law is applicable is based on where the company has its registered office. This is to be differentiated from the question of which law governs the purchase or service agreement between the consumer and the trader.

The obligations in detail:

1. Reference to dispute resolution on the website

Traders who maintain a website must inform consumers in an easily accessible, clear and understandable manner about the extent to which they are willing or obliged to participate in dispute resolution proceedings before a consumer dispute resolution body. This information must appear on the trader’s website (Sec. 36 (1) No. 1 in conjunction with (2) No. 2 German Consumer Dispute Resolution Act).

The law does not require any mandatory wording. Where what information has to appear on the website is not specified by the law either. It makes sense to meet this obligation in connection with the mandatory information which has to be provided regarding the ODR platform. The majority of companies have integrated this information into their “legal notices” (Impressum). The legal notices would have to be supplemented accordingly.

2. Reference to dispute resolution “together with” general terms and conditions of business

Traders who use general terms and conditions of business must inform consumers in an easily accessible, clear and understandable manner about the extent to which they are willing or obliged to participate in dispute resolution proceedings before a consumer dispute resolution body. The information must be provided “together with the general terms and conditions of business” (Sec. 36 (1) in conjunction with (2) No. 2 German Consumer Dispute Resolution Act).

No mandatory wording is required, nor is it described in more detail in what connection with the general terms and conditions of business the information has to be given. It makes sense to include this information directly in the general terms and conditions of business document, but separate from the actual provisions of the general terms and conditions of business.

3. Reference to dispute resolution “after dispute has arisen”

Sec. 37 German Consumer Dispute Resolution Act lays down an additional information obligation which cannot be fulfilled in the general terms and conditions of business or on the website. Specifically, the trader must inform the consumer about the consumer dispute resolution body which has jurisdiction for it, specifying its address and websites “if it has not been possible for the trader and the consumer to resolve the dispute regarding a consumer agreement”. The trader must at the same time state whether or not it is willing or obliged to participate in dispute resolution proceedings before this consumer dispute resolution body. If such willingness or such an obligation exists, the trader must specify all competent dispute resolution bodies. This information must be provided in text form.

To this end (customer care) processes at the company have to be adjusted so that fulfilment of this obligation is ensured. This regulation raises a number of questions. The wording of the Act leaves users in uncertainty in particular with respect to the following points:

• Does a trader who is not willing or obliged to participate in dispute resolution proceedings have to specify all competent dispute resolution bodies to the consumer?
  
  This question arises because it is possible that several dispute resolution bodies come into consideration for any disputes between the trader and the consumer. With respect to this question it is at least stated in a document published by the Federal Ministry of Justice and Consumer Protection (Consumer Dispute Resolution – Guidelines for Companies) that specifying one competent dispute resolution body should be sufficient.
  
  
  
• When exactly can a dispute on a consumer agreement “no longer be resolved” and does the information obligation therefore have to be fulfilled?
  
  The Explanatory Memorandum to the German Consumer Dispute Resolution Act states that the obligation arises when a dispute resulting from a consumer agreement could not be resolved by negotiating with the consumer (customer), e.g. in the context of the company’s in-house customer complaints system. This does not result in an exact time. Companies are advised in this respect to check their customer care processes closely with respect to at what time (which should be as late as possible) the information can be provided in a process which is as standardised as possible.
  
  
  
• Does the information even have to be provided (in text form) if the dispute with the customer is conducted exclusively by telephone, personally or via another media not based on text form?
  
  Neither the Act itself, nor the Explanatory Memorandum or the Directive on which the Act is based provide any clear answer to this question. It could at best be interpreted from Art. 13 (3) of the Directive that the obligation should only exist if the consumer has submitted the claim in text form himself. This is because this regulation assumes that the dispute between a consumer and a trader could not be settled “further to a complaint submitted directly by the consumer to the trader”. The term “submitted” suggests that the obligation only exists if the complaint was also submitted in text form. This, however, is by no means certain. Until a prevailing opinion has been formed or case law on this exists, companies are advised to always fulfil this obligation (in text form), regardless of in what form the dispute is being conducted.  

Lists of the authorised consumer dispute resolution bodies can be found on the homepages of the EU Commission and the Federal Office of Justice: Link to EU Commission, link to Federal Office of Justice.

It is important that all companies which enter into purchase or service agreements with consumers and operate a website and/or use general terms and conditions of business must decide before 1 February 2017 whether they will participate in the consumer dispute resolution (or will have to check whether they are obliged to do so). The information obligations specified above have to be met regardless of the decision (or the result of the check). However, the content of the obligation and the exact wording of the required information differ.

Additional articles: Online dispute resolution in consumer matters; ADR Online | New Information Obligations in E-Commerce