Alternative consumer dispute resolution and related duties arising from Act. No. 634/1992. Coll., on consumer protection

Mgr. Bc. Alžběta Chovancová 09.06.2016

Mgr. Bc. Alžběta Chovancová

chovancova@vozab.com

The latest amendment to the Act no. 634/1992 Coll., On Consumer Protection, recently introduced a consumer's right to alternative dispute resolution (abbreviated as „ADR“ from the English „Alternative Dispute Resolution“) and the related new obligations for businesses. Let's take a look together at what this means in practice for entrepreneurs and what can be expected in the future.

Sense the new regulation

Alternative Dispute Resolution is not a novelty for us, yet he has already been applied in the case of disputes in the financial services, electronic communications, postal services and services in the electricity, gas and heat.

New legislation now being introduced under the Consumer Protection Act generally uniform concept of extrajudicial settlement of the purchase contracts and contracts for the provision of services (in all areas of activity of entrepreneurs), with the exception of only disputes of health services, services of general economic interest and educational services provided by providers of further and higher education.

Alternative dispute resolution is an alternative to the authoritarian solution of disputes through the courts. Over court proceedings are free from judicial resolution of formalized procedures which are often lengthy, inefficient and costly. The advantage of alternative dispute resolution can thus be seen especially in its speed, lower degree of formality and generally lower costs.

Specifically as regards alternative dispute resolution in consumer relations, as amended Act pursues the interests of consumers, as the weaker party. Often they are in fact demands from consumer contracts through the courts virtually unenforceable, considering the low value of consumer disputes on the one hand and the disproportionately high cost of judicial enforcement of a lengthy process formalistic judicial enforcement on the other. Alternative Dispute Resolution introduced an amendment that may be important for effective and speedy resolution of claims by individual consumers.

Entities court settlement of consumer disputes and their solutions

Out of court solution of consumer disputes are entrusted so. „Entities ADR“, which are selected agencies, corporations, public nature or it may occasionally other subjects, usually depending on their nature or scope.

Consumer Protection Act then directly provides that an entity court settlement of consumer disputes in the field of electronic communications and postal services, the Czech Telecommunication Office (CTO) (http://www.ctu.cz/) disputes in the field of electricity, gas and heating industry's Energy regulatory Office (ERO) (http://www.eru.cz/cs/) and in disputes in financial services is that the financial Arbiter (http://www.finarbitr.cz/cs/).

The Act also provides that, subject to court settlement of consumer disputes remaining in other areas of business (ie. The residual category of consumer disputes), the Czech Trade Inspectorate (CTI) (https://adr.coi.cz/) unless the Ministry of Industry and trade (MIT) authorize a certain extent some other specific subject, especially then, for example, a professional chamber hobby like. thus, for example. was charged with Czech Bar Association (CBA) (http://www.cak.cz/) out of court solution of consumer disputes in legal services provided by lawyers in the exercise of the profession.

Methods of Alternative Dispute Resolution are then set by law. While the solutions adopted in the case of disputes resolved by the CTO, ERO and Financial Arbitrator are regulated by specific legislation and are relatively formal and comparable with the administrative process for the proceedings before the CTI and other bodies at MIT used the method. Conciliation. This method of alternative dispute resolution is characterized by the fact that the parties are led to a settlement agreement by an independent mediator that they shall facilitate advice and expert opinion.

The European dimension of court settlement of consumer disputes

The amendment to the Consumer Protection Act implements the Directive of the European Parliament and Council Directive 2013/11 / EU of 21 May 2013 on consumer ADR, and also based on a regulation of the European Parliament and Council Regulation (EU) no. 524/2013 of 21 May 2013 by resolution of consumer disputes online.

The purpose of the EU regulation, among others. Simplification solutions to cross-border consumer disputes arising from contracts concluded via the Internet. For this purpose, a so-called. European online platform for resolving consumer disputes, which are the Czech ADR entities connected. Free assistance in cross-border consumer disputes in handling complaints and offers European Consumer Centre Czech Republic.

Consumer disputes solved CTI and other authorized bodiesaccording to the Consumer Protection Act

As regards the general category of residual consumer disputes solved by CTI and possibly other bodies at MIT and is of significance largest category of consumer disputes, which covers virtually every entrepreneur who sells goods or services to consumers.

Direct negotiations with businessman

According to § 14 par. 2 Consumer Protection Act, the consumer is encouraged to try any disputes with the entrepreneur regarding sales or service contract for the provision of services directly to resolve first.

Application for the ADR

Only if the issue is not about the rights of an agreement, the consumer may refer the proposal to commence ADR at CTIA or competent body appointed MIT-of-court solution of consumer disputes in the region. Consumers can a proposal for the ADR shall submit, in writing, orally or through the log data box. In case of disputes, which is responsible for amicable solutions CTI, it is possible to file a petition, also through an online form on the website CTI (which is of course necessary to sign an electronic signature).

In the proposal, the consumer must, inter alia, noted that so far has not commenced judicial or arbitration proceedings and was not concluded an agreement with businessman over disputed rights and must also indicate when turned on for the first time entrepreneurs and applied the controversial law. The application must, inter alia, consumer attach a document proving that the pre-petition addressed to entrepreneurs directly and failed to resolve the dispute.

The consumer's right to initiate ADR (petition) for a limited time, the period for submission is 1 (one) year from the day when the consumer has exercised the right to issue an entrepreneur for the first time.

Initiation of ADR within the meaning of § 647 of the Civil Code considered on an agreement between the lender and borrower of extrajudicial negotiations, therefore, for this meeting running of the limitation period in respect of disputed claims consumers.

The course of court settlement and outputs

If there are no reasons for the rejection of the proposal, the procedure is initiated on the day of receipt of the proposal CTI or any other agency responsible MIT.

The ADR entity subsequently invite entrepreneurs to 15 days commented on the proposal. At this point, we consider it necessary to emphasize that the entrepreneur has the duty to attend court settlement of consumer disputes, and thus also has a duty to the consumer's express within the prescribed period. Then the entrepreneur is also obliged to provide any assistance necessary to the efficient conduct of court settlement of consumer disputes. The results of ADR is in response to lawmakers elected by the conciliation possible conclusion of an agreement by private litigants on how to resolve the dispute, and not of any administrative or other authoritative decision of a state authority. This agreement is not immediately enforceable, ie in case of a breach is necessary that the authorized party claiming their rights arising from the agreement through the courts, and eventually achieved thus issuing an enforceable court judgment, which could be the basis for the enforcement of judgments in execution. In the opposite case, when an agreement is not reached, the ADR has virtually no tangible result. The consumer can then consider whether to apply the controversial law in court.

It is also worth mentioning that according to the Rules for the procedure out of court settlement of consumer disputes issued by CTI pursuant to § 20× Consumer Protection Act, if it considers this department CTI ADR deems appropriate, may issue a reasoned non-binding opinion on the subject of the dispute, which the parties shall deliver together with a notice of termination of proceedings in those cases where the court settlement is not completed agreement between the parties about the controversial law. Such an opinion CTI may then despite its non-binding serve as a basis for further arguments resolve the dispute through the courts.

The duration and costs

The deadline for completion of the proceedings before the COI or other authorized entity is set by law at 90 days and, in the case of particularly complex disputes, it may be extended by a maximum of another 90 days.

Regarding costs, the proceedings before the CTIA or other authorized entity charged and each participant must bear its own costs.

New obligations for entrepreneurs

Obligation to cooperate

Above all, therefore the above-mentioned duty to attend court settlement of consumer disputes and provide synergy in the proceedings before the CTIA or other authorized body, including the obligation to express themselves within the legal deadline of 15 days on the draft consumer-court settlement.

Information obligation

The amendment Consumer Protection Act gives entrepreneurs a range of information obligations.

The entrepreneur is especially obliged to inform consumers about the subject Alternative Dispute Resolution for the area where the business operates, clear, comprehensible and easily accessible way and on this information, the entrepreneur is also obliged to state explicitly also the Internet address of the entity court settlement of consumer disputes.

In the event that the entrepreneur website or in consumer contracts referring to general business conditions, it is necessary above information about the entity court settlement of consumer disputes and its website also specify the website or entrepreneurs in general business conditions. To this extent, it is a general preventive information obligations regardless of whether the entrepreneur has some disputes with consumers or not.

More information duties in the same range applies when there is a dispute with a consumer who fails to settle directly (classically consumer exercises his controversial claim and businessman, he does not pass). In such a situation, the entrepreneur is obliged to inform the consumer specifically in writing or on another durable medium on a subject-court settlement of consumer disputes. Practically as a duplicate obligation to provide information beyond the general information in a shop or on the website or in the general business conditions.

Finally, it should be noted that failure to comply with statutory obligations, that failure to cooperate or failure to report, the entrepreneur commits an administrative offense for which it is possible to impose a fine of up to CZK 1,000,000.

Obligations of e-shop entrepreneurs

Operators of e-shops are also imposed obligations directly enforceable by European Parliament and Council Regulation (EU) no. 524/2013 of 21 May 2013 on the settlement of consumer disputes online. The operators, who are required to use in resolving disputes ADR entity (which are virtually all operators selling goods or providing services) are obliged to place on their website eshops reference platform for resolving disputes online. Link to this platform are also required to disclose in an e-mail to the consumer (if the offer made to consumers by e-mail), and possibly also in the general business conditions.

Duties business in other Member States

Entrepreneurs also doing business in another Member State should additionally information on dispute resolution online also customize a fact that may be covered by the law of the State where the business activities here, which may impose additional requirements.

Recommendations for entrepreneurs concluding contracts with consumers

1. Meet the general duty to provide information so that the establishment on the website and within the general terms and conditions will be placed consumer information on the entity responsible for out solutions for consumer disputes and on its website.

An example of a formulation that satisfies the above information obligation, the entity court settlement of consumer disputes CTI is included below:

"In the event that there is between us and the consumer to the emergence of a consumer dispute of a purchase contract or a contract for services that can not be solved by mutual agreement, the consumer may file a petition for judicial resolution of such disputes body designated court settlement of consumer disputes, which is

Czech trade inspection

Central Inspectorate – Department of ADR

Štěpánská 15

120 00 Praha 2

Email: adr@coi.cz

Web: http://www.coi.cz/

Portal for ADR: https://adr.coi.cz/ "

Note .: Alternatively, it should be noted analogy with another entity court settlement regarding the specific area where the law or mandate MIT designed another body-court settlement of consumer disputes.

2. Entrepreneurs operating shop should be beyond the above also meet the general duty to provide information in relation to the platform for dispute resolution online, so that within websites and email offers for consumers placed beyond the above relevant information.

An example of a formulation that satisfies the above information duty mentioned below:

„Consumers can also take advantage of a platform for online dispute settlement, which is established by the European Commission at http://ec.europa.eu/consumers/odr/.“

3. In the event of a dispute with the consumer to try to settle this right. If this fails, to meet the specific information obligation so that consumers will be under the justification for refusing his requests also communicated information on the body responsible for out solution of consumer disputes, which must be provided to the consumer in writing or on another durable medium.
4. If the consumer initiates the ADR proposal submitted to the agency responsible for consumer disputes out of court solution, to meet the obligation to cooperate, participate in the alternative dispute resolution and fulfill its obligations under the call and instructions entity charged out of court solution of consumer disputes. It is especially necessary to comment in writing to the petition.