98/257/EC: Commission Recommendation of 30 March 1998 on the principles applicable to the bodies responsible for out-of-court settlement of consumer disputes (Text with EEA relevance)
Date: 1998-03-30
Institutions: European Commission
Subjects: EC recommendation, European Commission, civil proceedings, consumer movement

17. 4. 98

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Official Journal of the European Communities

L 115/31

II

(Acts whose publication is not obligatory)

COMMISSION

COMMISSION RECOMMENDATION

of 30 March 1998

on the principles applicable to the bodies responsible for out-of-court settlement
of consumer disputes (*)

(Text with EEA relevance)

(98/257/EC)

THE COMMISSION OF THE EUROPEAN COMMUNITIES,

Having regard to the Treaty establishing the European
Community and in particular Article 155 thereof,

Whereas the Council, in its conclusions approved by the
Consumer Affairs Council of 25 November 1996, em-
phasised the need to boost consumer confidence in the
functioning of the internal market and consumers’ scope
for taking full advantage of the possibilities offered by the
internal market, including the possibility for consumers
to settle disputes in an efficient and appropriate manner
through out-of-court or other comparable procedures;

Whereas the European Parliament, in its resolution of 14
November 1996 (1), stressed the need for such procedures
to meet minimum criteria guaranteeing the impartiality of
the body, the efficiency of the procedure and the publi-
cising and transparency of proceedings and called on the
Commission to draft proposals on this matter;

whereas the difficulties that court procedures may involve
may, notably in the case of cross-border conflicts, dis-
courage consumers from exercising their rights in prac-
tice;

Whereas the ‘Green Paper on the access of consumers to
justice and the settlement of consumer disputes in the
single market’ (2) was the subject of wide-ranging consul-
tations whose results have confirmed the urgent need for
Community action with a view to improving the current
situation;

Whereas the experience gained by several Member States
shows that alternative mechanisms for the out-of-court
settlement of consumer disputes — provided certain
essential principles are respected — have had good
results, both for consumers and firms, by reducing the
cost of settling consumer disputes and the duration of the
procedure;

Whereas most consumer disputes, by their nature, are
characterised by a disproportion between the economic
its judicial settlement;
value at stake and the cost of

(*) A communication on the out-of-court settlement of consumer
disputes was adopted by the Commission on 30 March 1998.
This communication, which includes this recommendation
and the European consumer complaint form, is available on
the Internet (http://europa.eu.int/comm/dg24).

(1) European Parliament resolution on the Commission commu-
nication ‘Action plan on consumer access to justice and the
settlement of consumer disputes in the internal market’ of 14
November 1996 (OJ C 362, 2. 12. 1996, p. 275).

Whereas the adoption of such principles at European
level would facilitate the implementation of out-of-court
procedures for settling consumer disputes; whereas, in the
case of cross-border conflicts, this would enhance mutual
confidence between existing out-of-court bodies in the
different Member States and strengthen consumer confi-
dence in the existing national procedures; whereas these
criteria will make it easier for parties providing out-of-
court settlement services established in one Member State
to offer their services in other Member States;

(2) COM(93) 576 final of 16 November 1993.

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Whereas one of
the Green Paper
the conclusions of
concerned the adoption of a Commission recommenda-
tion with a view to improving the functioning of the
ombudsman systems responsible for handling consumer
disputes;

the need for

Whereas
such a recommendation was
stressed during the consultations on the Green Paper and
was confirmed during the consultation on the ‘Action
Plan’ communication (1) by a very large majority of the
parties concerned;

Whereas this recommendation must be limited to pro-
cedures which, no matter what they are called, lead to the
settling of a dispute through the active intervention of a
third party, who proposes or imposes a solution; whereas,
it does not concern procedures that merely
therefore,
involve an attempt
to
to bring the parties
convince them to find a solution by common consent;

together

Whereas the decisions taken by out-of-court bodies may
be binding on the parties, may be mere recommendations
or may constitute settlement proposals which have to be
accepted by the parties; whereas for the purposes of this
recommendation these various cases are covered by the
term ‘decision’;

Whereas the decision-making body’s impartiality and
objectivity are essential for safeguarding the protection of
consumer rights and for strengthening consumer con-
fidence in alternative mechanisms for resolving consumer
disputes;

Whereas a body can only be impartial if, in exercising its
functions, it is not subject to pressures that might sway its
its independence must be
decision; whereas, therefore,
guaranteed without this implying the need for guarantees
that are as strict as those designed to ensure the inde-
pendence of judges in the judicial system;

Whereas, when the decision is taken by an individual, the
decision-maker’s impartiality can only be assured if he
can demonstrate that he possesses the necessary inde-
pendence and qualifications and works in an environment
which allows him to decide on an autonomous basis;
whereas this requires the person to be granted a mandate
of sufficient duration, in the course of which he cannot be
relieved of his duties without just cause;

sionals is an appropriate way of ensuring this inde-
pendence;

Whereas, in order to ensure that the persons concerned
receive the information they need, the transparency of the
procedure and of the activities of the bodies responsible
for resolving the disputes must be guaranteed; whereas the
absence of transparency may adversely affect the rights of
the parties and cause misgivings as to out-of-court pro-
cedures for resolving consumer disputes;

Whereas certain interests of the parties can only be safe-
guarded if the procedure allows them to express their
viewpoints before the competent body and to acquaint
themselves with the facts presented by the opposing party
and, where applicable, the experts’ statements; whereas
this does not necessarily necessitate oral hearings of the
parties;

Whereas out-of-court procedures are designed to facilitate
consumer access to justice; whereas, therefore, if they are
to be effective, they must remedy certain problems asso-
ciated with court procedures, such as high fees,
long
delays and cumbersome procedures;

Whereas, in order to enhance the effectiveness and equity
of the procedure, the competent body must play an active
to take into consideration any
role which allows
element useful
in resolving the dispute; whereas this
active role is all the more important when, in the frame-
work of out-of-court procedures, the parties in many cases
do not have the benefit of legal advice;

it

Whereas the out-of-court bodies may decide not only on
the basis of legal rules but also in equity and on the basis
of codes of conduct; whereas, however, this flexibility as
regards the grounds for their decisions should not lead to
a reduction in the level of consumer protection by
comparison with the protection consumers would enjoy,
under Community law, through the application of the law
by the courts;

Whereas the parties are entitled to be informed of the
decisions handed down and of grounds for these de-
cisions; whereas the grounds for decisions are a pre-
requisite for transparency and the parties’ confidence in
the operation of out-of-court procedures;

Whereas, when the decision is taken by a group, equal
participation of representatives of consumers and profes-

(1) Action Plan on consumer access to justice and the settlement
of consumer disputes in the internal market, COM(96) 13
final of 14 February 1996.

Whereas in accordance with Article 6 of the European
Human Rights Convention, access to the courts is a
fundamental right
that knows no exceptions; whereas
since Community law guarantees free movement of goods
and services in the common market, it is a corollary of
those freedoms that operators, including consumers, must
be able, in order to resolve any disputes arising from their

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economic activities, to bring actions in the courts of a
Member State in the same way as nationals of that State;
whereas out-of-court procedures cannot be designed to
replace court procedures; whereas, therefore, use of the
out-of-court alternative may not deprive consumers of
their right to bring the matter before the courts unless
they expressly agree to do so, in full awareness of the facts
and only after the dispute has materialised;

Whereas in some cases, and independently of the subject
and value of the dispute, the parties and in particular the
consumer, as the party who is regarded as economically
weaker and less experienced in legal matters than the
other party to the contract, may require the legal advice of
a third party to defend and protect their rights more
effectively;

Whereas, in order to ensure a level of transparency and
dissemination of information on out-of-court procedures
in line with the principles set out in the recommendation
and to facilitate networking, the Commission intends to
create a database of the out-of-court bodies responsible for
resolving consumer disputes that offer these safeguards;
whereas the database will contain particulars commun-
icated to the Commission by the Member States that wish
to participate in this initiative; whereas, to ensure stand-
ardised information and to simplify the transmission of
these data, a standard information form will be made
available to the Member States;

Whereas, finally, the establishment of minimum prin-
ciples governing the creation and operation of out-of-
court procedures for resolving consumer disputes seems,
in these circumstances, necessary at Community level to
support and supplement, in an essential area, the initi-
atives taken by the Member States in order to realise, in
accordance with Article 129a of the Treaty, a high level of
consumer protection; whereas it does not go beyond what
is necessary to ensure the smooth operation of out-of-
court procedures; whereas it is therefore consistent with
the principle of subsidiarity,

RECOMMENDS that all existing bodies and bodies to be
created with responsibility for the out-of-court settlement
of consumer disputes respect the following principles:

— the person appointed possesses

the abilities, ex-
perience and competence, particularly in the field of
law, required to carry out his function,

— the person appointed is granted a period of office of
sufficient duration to ensure the independence of his
action and shall not be liable to be relieved of his
duties without just cause,

— if the person concerned is appointed or remunerated
by a professional association or an enterprise, he must
not, during the three years prior to assuming his
present function, have worked for this professional
association or for one of its members or for the enter-
prise concerned.

When the decision is taken by a collegiate body, the inde-
pendence of the body responsible for taking the decision
must be ensured by giving equal representation to consu-
mers and professionals or by complying with the criteria
set out above.

II

Principle of transparency

Appropriate measures are taken to ensure the trans-
parency of the procedure. These include:

1. provision of the following information, in writing or
any other suitable form, to any persons requesting it:

— a precise description of the types of dispute which
may be referred to the body concerned, as well as
any existing restrictions in regard to territorial
coverage and the value of the dispute,

— the rules governing the referral of the matter to the
body, including any preliminary requirements that
the consumer may have to meet, as well as other
procedural
rules, notably those concerning the
written or oral nature of the procedure, attendance
in person and the languages of the procedure,
— the possible cost of the procedure for the parties,
including rules on the award of costs at the end of
the procedure,

— the type of rules serving as the basis for the body’s
decisions (legal provisions, considerations of equity,
codes of conduct, etc.),

— the decision-making arrangements within the

I

body,

Principle of independence

The independence of
ensured in order to guarantee the impartiality of
actions.

the decision-making body is
its

When the decision is taken by an individual, this inde-
pendence is in particular guaranteed by the following
measures:

— the legal force of the decision taken, whereby it
shall be stated clearly whether it is binding on the
professional or on both parties. If the decision is
binding, the penalties to be imposed in the event
of non-compliance shall be stated, as shall
the
means of obtaining redress available to the losing
party.

2. Publication by the competent body of an annual report
setting out the decisions taken, enabling the results
obtained to be assessed and the nature of the disputes
referred to it to be identified.

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III

Adversarial principle

The procedure to be followed allows all
the parties
concerned to present their viewpoint before the compe-
tent body and to hear the arguments and facts put forward
by the other party, and any experts’ statements.

IV

Principle of effectiveness

The effectiveness of the procedure is ensured through
measures guaranteeing:

— that the consumer has access to the procedure without

being obliged to use a legal representative,

— that the procedure is free of charges or of moderate

costs,

— that only short periods elapse between the referral of a

matter and the decision,

— that the competent body is given an active role, thus
to take into consideration any factors

enabling it
conducive to a settlement of the dispute.

V

Principle of legality

The decision taken by the body may not result in the
consumer being deprived of the protection afforded by
the mandatory provisions of the law of the State in whose
territory the body is established. In the case of cross-
border disputes, the decision taken by the body may not
result in the consumer being deprived of the protection
afforded by the mandatory provisions applying under the
law of the Member State in which he is normally resident
in the instances provided for under Article 5 of the Rome

Convention of 19 June 1980 on the law applicable to
contractual obligations.

All decisions are communicated to the parties concerned
as soon as possible, in writing or any other suitable form,
stating the grounds on which they are based.

VI

Principle of liberty

The decision taken by the body concerned may be
binding on the parties only if they were informed of its
binding nature in advance and specifically accepted this.

The consumer’s recourse to the out-of-court procedure
may not be the result of a commitment prior to the ma-
terialisation of the dispute, where such commitment has
the effect of depriving the consumer of his right to bring
an action before the courts for the settlement of
the
dispute.

VII

Principle of representation

The procedure does not deprive the parties of the right to
be represented or assisted by a third party at all stages of
the procedure.

THIS RECOMMENDATION is addressed to the bodies
responsible for the out-of-court settlement of consumer
disputes, to any natural or legal person responsible for the
creation or operation of such bodies, as well as to the
Member States, to the extent that they are involved.

Done at Brussels, 30 March 1998.

For the Commission

Emma BONINO

Member of the Commission