COMMISSION STAFF WORKING DOCUMENT Subsidiarity Grid Accompanying the document Proposal for a DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL amending Directive 2013/11/EU on alternative dispute resolution for consumer disputes, as well as Directives (EU) 2015/2302, (EU) 2019/2161 and (EU) 2020/1828
Date: 2023-10-17
Institutions: Directorate-General for Justice and Consumers, European Commission
Subjects: alternative dispute resolution, consumer protection, digital content, digital single market, electronic commerce, goods and services, provision of services, third country, trade dispute

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  EN 

   EUROPEAN COMMISSION  Brussels, 17.10.2023  SWD(2023) 334 final  COMMISSION STAFF WORKING DOCUMENT Subsidiarity Grid   Accompanying the document Proposal for a DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL amending Directive 2013/11/EU on alternative dispute resolution for consumer disputes, as well as Directives (EU) 2015/2302, (EU) 2019/2161 and (EU) 2020/1828 {COM(2023) 649 final} - {SEC(2023) 347 final} - {SWD(2023) 335 final} - {SWD(2023) 337 final}  
 
 
Revision of the ADR Directive - Subsidiarity Grid  

1.  Can the Union act? What is the legal basis and competence of the Unions’ intended action? 

1.1 Which article(s) of the Treaty are used to support the legislative proposal or policy initiative? 

EU  consumer  protection  legislation  has  served  as  a  tool  for  strengthening  the  functioning  of  the 
Single  Market  through  harmonization  of  national  laws.  For  this  reason,  all  consumer  protection 
legislative  acts  have  as  a  legal  basis  Article  114  of  the  TFEU.  The  complementarity  between  the 
objectives to promote the single market and to ensure a high level of consumer protection is made 
evident by the second paragraph of Article 169 TFEU, which states that the Union should promote 
the interests of consumers through measures adopted pursuant to Article 114 in the context of the 
completion of the internal market. By promoting common consumer protection standards across the 
Union, traders can operate across borders without having to constantly adapt their practices.  

Article  169  of  the  TFEU  also  states  that  EU  measures  shall  not  prevent  any  Member  State  from 
maintaining  or  introducing  more  stringent  protective  measures  provided  that  they  are  compatible 
with the Treaties. In this way EU law provides a common basic level of protection to all consumers 
residing in the EU.  

1.2 Is the Union competence represented by this Treaty article exclusive, shared or supporting in 
nature? 

Consumer protection issues are a shared competence of the EU and Member States. Once EU 
legislation in this domain is adopted through the ordinary legislative procedure, the Member States 
are responsible for implementing and enforcing the EU rules.  

2.  Subsidiarity Principle: Why should the EU act? 

2.1 Does the proposal fulfil the procedural requirements of Protocol No. 21: 

-  Has there been a wide consultation before proposing the act? 
- 

Is there a detailed statement with qualitative and, where possible, quantitative indicators 
allowing an appraisal of whether the action can best be achieved at Union level? 

Before putting forward this proposal, the Commission consulted widely. Those consultation activities 
included, in line with the Commission’s Better Regulation rules:  

- 

2  public  consultations  (backward  and  forward-looking)  published  on  the  “Have  your  Say” 
website in all EU languages – over 100 responses were received for each questionnaire; 
-  Online  ADR assembly with participation of over 400 ADR  practitioners and other consumer 

protection stakeholders; 

-  Dedicated  workshops  with  ADR  competent  authorities,  ADR  practitioners,  European 

- 

Consumer Centres, etc; 
Studies incluidng a data collection study  based on national ADR  questionnaires, interviews, 
case studies, etc.; a behavioural study and a mini legal study. 

-  Other  ADR-related  events  (e.g.  participation  of  Commission  in  national  ADR  events,  ADR 

networks, etc) 

1 https://eur-lex.europa.eu/legal-content/EN/TXT/HTML/?uri=CELEX:12016E/PRO/02&from=EN  

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Detailed information on the consultation strategy and the outcome of the stakeholder consultations 
can be found in Chapter 3 of the Explanatory Memorandum to the proposal and in Annex 2 of the 
Impact Assessment. The Explanatory Memorandum (Chapter 2) and the Impact Assessment (Chapter 
3) contain a section on the principle of subsidiarity.  

2.2 Does the explanatory memorandum (and any impact assessment) accompanying the 

Commission’s proposal contain an adequate justification regarding the conformity with the 
principle of subsidiarity? 

The revised ADR directive will provide access to all consumers and traders to high quality and cost-
efficient out of court dispute resolution adapted to digital markets.  Making ADR simpler and more 
cost-effective  to  solve  disputes  with  a  cross-border  dimension,  including  posssible  collective  ADR 
proceedings,  could  help  strengthening  cross-border  purchases  of  goods  and  services,  notably  in 
online  shopping  but  also  consumption  of  tourism  and  travel  services  within  the  EU  and  beyond. 
Therefore, there is a strong added value in an action at EU level, as most of the problems that this 
proposal  tackles  are  not  limited  to  the  territory  of  one  Member  State  but  are  of  a  cross-border 
nature.   

The  objectives  of  the  proposed  action  cannot  be  sufficiently  achieved  by  Member  States  and  can 
therefore, by reason of the scale or effects of the proposed action, be better achieved by the EU. EU 
action will ensure a consistently high level of consumer protection, more consumer trust in ADR and 
more networking and exchange of best practices at EU level. 

2.3 Based on the answers to the questions below, can the objectives of the proposed action be 

achieved sufficiently by the Member States acting alone (necessity for EU action)? 

(a)  Are there significant/appreciable transnational/cross-border aspects to the problems being 

tackled? Have these been quantified? 

The  ADR  Directive  provides  an  EU  out-of-court  dispute  resolution  legal  framework  to  help  EU 
consumers and traders resolve domestic and cross-border disputes in a fair, transparent, affordable 
and fast way. Nevertheless, the evaluation found that cross-border ADR uptake remained at very low 
levels due to several barriers: 

- 

consumers  may  not  be  sufficiently  aware  and  informed  of  the  applicability  of  consumer 
protection rules and of the existence of cross-border means of redress; 
traders are not always keen to engage in ADR;  

- 
-  other practical challenges e.g. costs, language barriers, no clarity on the applicable law to be 

used in a cross-border context, lack of easily accessible online procedures. 

The Proposaal is tackling such issues notably by providing for the creation of ADR contact points to 
advise consumers with cross border purchase issues on the best redress solutions.  

(b)  Would national action or the absence of the EU level action conflict with core objectives of 

the Treaty2 or significantly damage the interests of other Member States? 

Without  EU  level  action,  different  national  initiatives  to  address  cross-border  ADR  disputes  would 
likely  result  in  divergent  national  rules  and  potentially  overlapping  requirements,  leading  to  legal 
uncertainty and increasing administrative burden for companies to operate cross-border, therefore 
conflicting with  the  Treaty  objective  of  establishing  the  internal market. The  revised  ADR Directive 

2 https://europa.eu/european-union/about-eu/eu-in-brief_en  

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will retain the minimum harmonisation approach whilst the main objective is to widen its scope to 
cover more consumer disputes, simplify cross-border ADR by improving assistance to consumers and 
traders and by user-friendly tools for better signposting of ADR entities. 

(c)  To  what  extent  do  Member  States  have  the  ability  or  possibility  to  enact  appropriate 

measures? 

Member  State measures on  their  own  could  not  bring  about  sufficient  improvement  in simplifying 
cross-border  ADR.  Coordinated  action  is  required  to  achieve  the  objectives  of  this  initiative;  for 
instance, creating ADR contact points across all the EU Member States to promote cross-border ADR, 
assist consumers by signposting them to competent ADR entities, and giving practical assistance e.g. 
machine translation, documentation, etc.  These ADR contact points aim to increase ADR uptake to 
resolve cross-border disputes. 

The proposal incentivises the use of digital tools to simplify cross-border ADR (communication, case-
handling,  document  management,  etc)  as  to  render  cross-border  faster,  more  consistent  and 
simpler. 

(d)  How does the problem and its causes (e.g. negative externalities, spill-over effects) vary 

across the national, regional and local levels of the EU? 

Given  the  minimum  harmonisation  approach,  Member  States  have  different  ADR  frameworks, 
architectures and fees - depending on their resources, legal culture, perception, etc - which hinder in 
different  ways  the  access  to  cross-border  ADR.  Since  these  are  cross-border  disputes,  they  are 
present across national, regional and local levels throughout the EU. The objective of this initiative is 
exactly to improve the access both for traders and consumers to cross-border ADR.  

(e)  Is the problem widespread across the EU or limited to a few Member States? 

Low cross-border ADR uptake is registered across all the EU Member States; nevertheless in certain 
Member States, out-of-court dispute resolution in general is still limited for various reasons e.g. ADR 
was  only  introduced  through  the  transposition of the  ADR Directive  in 2015;  lack  of  resources  and 
investment in ADR through public budget, or complex architecture e.g. where many ADR entities are 
established without a residual ADR entity, high rate of rejected cases, etc. The evaluation concluded 
that although the ADR Directive has been transposed across all the EU Member States and there has 
been  good  progress  in  access  to  out-of-court  dispute  resolution;  there  are  persistent  gaps  in  its 
implementation.  The  Commission  has  been  awarding  grants  to  quality  ADR  entities  since  2018  to 
improve awareness-raising, digitalisation, capacity building, etc. 

(f)  Are Member States overstretched in achieving the objectives of the planned measure? 

The  planned  measures  build  on  what  exists  at  national  and  EU  level  today  and  therefore,  do  not 
require from Member States to overstretch. The newly establish ADR contact points will absorb the 
current  ODR  contact  points  -  in  the  vast  majority  already  sitting  in  European  Consumer  Centres. 
These  bodies  have  a  lot  of  experience  in  assisting  consumers  resolve  cross-border  disputes  an 
established  infrastructure  to  assist  consumers  in  cross  border  cases  and  they  promote  consumer 
rights in general. The EU budget is already earmarked to support the ECC-Net and award ADR grants 
through the Single Market Programme. 

Given  that  the  scope  of  the  ADR  Directive  is  to  be  widened  to  cover  disputes  related  to  statutory 
consumer  rights  be  they  explicitly  written  in  a  contract  or  not,  some  additional  resources  may  be 
needed for ADR entities. 

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(g)  How do the views/preferred courses of action of national, regional and local authorities 

differ across the EU? 

Member  States  expressed  support  for  the  measures  planned  under  this  proposal,  during  the 
meetings  bringing  together  Member  State  representatives  from  Ministries  responsible  consumer 
protection  (e.g.  Informal  Miniterial  in  Prague  under  the  Czech  Presidency  of  the  Council)  and  in 
replies by authorities to the Call for Evidence and other consultation activities in the context of this 
initiative.  

In  general,  they  considered  that  boosting  traders’  participation  in  ADR  and  strengthening  the 
accreditation  process  of national ADR entities as crucial to increase  consumer trust in cross-border 
ADR. No objections were raised by the authorities on the widening of the scope of the ADR Directive. 

2.4 Based on the answer to the questions below, can the objectives of the proposed action be 

better achieved at Union level by reason of scale or effects of that action (EU added value)? 

(a)  Are there clear benefits from EU level action?  

There is a strong value added in improving the access to quality ADR to resolve cross-border disputes 
in the Single Market. Traders and consumers will benefit from effective and fair procedures to soleve 
their disputes and will therefore increase their trust in selling or purchasing in another EU country. 
Legal costs will be lower than having to use tribunals. A robust cross-border ADR framework with the 
possibility  of  participation  by  third  country  traders  will  create  a  level-playing  field  for  traders 
operating in the single market.  

(b)  Are there economies of scale? Can the objectives be met more efficiently at EU level (larger 

benefits per unit cost)? Will the functioning of the internal market be improved? 

A  stronger  ADR  framework  will  enable more  consumers to benefit  from effective  redress. Simpler 
and streamlined procedures will reduce the overall cost of ADR processes across all MS. Both effects 
will  play  together  and  reduce  the  average  cost  for  one  ADR  process  in  a  similar  manner  in  all  EU 
countries.  There  will  be  improved  consistency  among  outcomes  of  similar  disputes,  possibilities  to 
group  them  in  one  collective  case,  allowing  to  make  better  use  of  the  limited  resources  in  ADR 
entities. Long-term investments into digitalisation of ADR processes will also lead to substantial cost 
savings  for  all  actors  in  ADR.  Online  traders  will  no  longer  have  to  provide  the  link  to  the  ODR 
platform on their websites; hence reducing information obligations. 

(c)  What are the benefits in replacing different national policies and rules with a more 

homogenous policy approach? 

The proposal does not seek to change the national ADR architectures but the targeted amendments 
aim at simplifying cross-border ADR, boosting trader participation in ADR through the duty to reply to 
enquires  by  ADR  entities  as  to  whether  they  will  be  participating  or  not  in  an  ADR  process  and 
making it more cost-effective by reducing the administrative burden on ADR competent authorities 
and on ADR entitites. The proposal does not intend to make trader participation mandatory; Member 
States  will  remain  free  to  decide  on  binding  v.  non-binding  ADR  outcome,  mandatory  v.  voluntary 
trader participation in ADR. 

(d)  Do the benefits of EU-level action outweigh the loss of competence of the Member States 
and the local and regional authorities (beyond the costs and benefits of acting at national, 
regional and local levels)? 

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Member States will retain their current power to accredit and monitor the ADR entities established 
on their territories and the competence to design the overall ADR architecture. The authorities will 
continue notifying the quality ADR entities to the Commission. 

(e)  Will there be improved legal clarity for those having to implement the legislation? 

It is expected that EU rules will lead to improved legal certainty as compared to today’s fragmented 
ADR  framework  e.g.  in  terms  of  coverage  of  non-contractual  disputes  and  willingness  by  non-EU 
traders to participate in ADR. Moreover, the possibility to set up collective ADR structures at national 
level will lead to more concistent decisions on similar cases. 

3.  Proportionality: How the EU should act 

3.1  Does the explanatory memorandum (and any impact assessment) accompanying the 

Commission’s proposal contain an adequate justification regarding the proportionality of the 
proposal and a statement allowing appraisal of the compliance of the proposal with the 
principle of proportionality? 

The proposal does not go beyond what is strictly necessary to achieve its objectives. It maintains the 
minimum  harmonisation  approach,  enabling  a  degree  of  flexibility  on  Member  States  to  decide 
whether  trader  participation  in  ADR  is mandatory  or  voluntary, or  mixed  depending  on  the market 
sectors; whether the outcome of ADR is to be binding or not; the implementation of collective ADR; 
consumer fees; ADR framework, etc.  

Streamlining reporting obligations for ADR entities and competent authorities will improve the data 
comparability across the EU. Although the introduction of the trader’s duty of reply to enquiries by 
ADR entities is expected to increase business engagement in ADR and increase come costs, the costs 
will be offset by the removal of disclosure obligations for traders who do not intend nor are obliged 
to participate in ADR. Moreover, the repeal of the ODR Regulation will alleviate the burden on online 
traders of including the link to the ODR platform and a dedicated email address on their website.  

The impact assessment carried out a proportionality test to ensure that proposed policy options are 
proportionate  based  on  costs  and  resources.  The  proposal  has  an  ambitious  and  future-proof 
approach leading to higher benefits for consumers and society in general. 

3.2 Based on the answers to the questions below and information available from any impact 
assessment, the explanatory memorandum or other sources, is the proposed action an 
appropriate way to achieve the intended objectives? 

(a)  Is the initiative limited to those aspects that Member States cannot achieve satisfactorily on 

their own, and where the Union can do better? 

The proposal focuses on cross-border aspects and introduces solutions which could not be achieved 
by Member States on their own, as explained above in replies to the sub-questions of question 2.3. 

(b)  Is the form of Union action (choice of instrument) justified, as simple as possible, and 

coherent with the satisfactory achievement of, and ensuring compliance with the objectives 
pursued (e.g. choice between regulation, (framework) directive, recommendation, or 
alternative regulatory methods such as co-legislation, etc.)? 

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The review to the ADR Directive is planned through targeted amendments as the aim is to strengthen 
the  EU  ADR  framework  rather  than  to  revamp  it.  The  Commission  is  issuing  a  Recommendation 
addressed  to  online  marketplaces  and  EU  trade  assocciations  to  incentivise  rather  than  to  oblige 
them to set up dispute resolution mechanisms in alignment with the quality criteria laid down in the 
ADR Directive.  In addition, the Commission plans to repeal the ODR Regulation which provides for an 
EU ODR Platform managed by the Commission which has proved not to be cost-effective given the 
low number of disputes which are resolved through it.  

(c)  Does the Union action leave as much scope for national decision as possible while achieving 
satisfactorily the objectives set? (e.g. is it possible to limit the European action to minimum 
standards or use a less stringent policy instrument or approach?) 

A directive is binding as to the result of achieving the functioning of the internal market, but it leaves 
to  the  national  authorities  the  choice  of  format  and  methods. This  will  enable  Member  States  to 
amend the legislation in force (as a result of having transposed Directive 2013/11/EU) to the extent 
necessary  to  ensure  compliance,  hence minimising  the  impact of  such  a  reform  on  their  legislative 
systems. Due  to  the  minimum  harmonisation  approach,  many  regulatory  choices  are  left  to  the 
Member States. 

(d)  Does the initiative create financial or administrative cost for the Union, national 

governments, regional or local authorities, economic operators or citizens? Are these costs 
commensurate with the objective to be achieved? 

The proposed provisions are limited to what is necessary and proportionate to achieve the objectives 
of the initiative while respecting national legal traditions and, where possible, providing flexibility to 
Member  States  to  achieve  the  requirements  in  line  with  their  national  laws  and  systems.  The 
amendments proposed contain cost reduction measures and therefore it is expected that new costs 
will be balanced by cost reductions. 

(e)  While respecting the Union law, have special circumstances applying in individual Member 

States been taken into account? 

Existing  Member  States’  ADR  frameworks  were  thoroughly  examined  in  the  preparation  of  this 
proposal  (including  through  a  legal  mapping  carried  out  in  the  external  contractor  study).  The 
proposed provisions should apply without difficulties to all Member States. 

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