ALTERNATIVE DISPUTE RESOLUTION FOR CONSUMERS

Law no. 144/2015 of September 8 transposed Directive 2013/EU, of the European Parliament and of the Council, of May 21, 2013, concerning alternative dispute resolution for consumers.

The aforementioned decree establishes the legal framework for Alternative Dispute Resolution (ADR) mechanisms for consumers, creating the Consumer Arbitration Network in Portugal.

What are consumer disputes?

These are disputes initiated by a consumer against a supplier of goods or a service provider, relating to contractual obligations arising from contracts for the sale of goods or the provision of services, concluded between established suppliers of goods or service providers and consumers residing in Portugal and the European Union (Article 2, no. 1 of Law no. 144/2015).

What is ADR?

ADR refers to mechanisms available to consumers and businesses to resolve consumer disputes out of court, in a faster and less expensive way. ADR includes mediation, conciliation, and arbitration. The ADR process begins with an attempt to reach an agreement through mediation or conciliation. However, if an agreement is not reached, the parties involved can still resort to the Arbitration Court, through a simple and quick process.

What are ADR entities?

They are independent entities, with specialized staff, who impartially help the consumer and the company reach an amicable solution. These entities are authorized to conduct mediation, conciliation, and arbitration of consumer disputes. These entities must be registered on the list provided for in Article 17 of Law no. 144/2015.

Who is responsible for managing the list of ADR entities?

The Directorate-General for Consumers is the competent national authority for organizing the registration and dissemination of the list of ADR entities (see ANNEX I).

How many ADR entities are there in Portugal?

In Portugal, there are ten Consumer Conflict Arbitration Centers. Seven of these have general competence and regional scope, being located in Lisbon, Porto, Coimbra, Guimarães, Braga/Viana do Castelo, Algarve, and Madeira. There is also the center with national (supplementary) territorial scope, the CNIACC - National Center for Consumer Conflict Information and Arbitration. There are also two specialized centers with specific competence in the automotive sector and the insurance sector.

How does a company know which ADR entity it should indicate to its consumers?

The place where the contract for the sale of goods or the provision of services is concluded, which typically coincides with the location of the establishment, determines the competent arbitration center.

For example:

A company that has only one or more commercial establishments in a certain municipality should only indicate the ADR entity that is competent to resolve conflicts in that municipality.

A company that operates throughout the national territory should indicate all competent entities.

A vehicle repair shop, an insurance company, or a travel agency should indicate the specialized entities for these sectors.

Who is obliged to inform consumers about ADR entities?

All suppliers of goods and service providers, including those who only sell products or provide services online, are obliged to inform consumers about the available ADR entities or those to which they have voluntarily adhered or are bound by law. Only providers of General Interest Services without economic consideration, such as social services provided by the state or on its behalf, health services, and public complementary or higher education services, are excluded.

The obligations arising from Law no. 144/2015 apply, with the necessary adaptations, to all economic sectors not excluded by the said law, including those where specific legislation already exists that provides for an identical obligation.

Is there any obligation to adhere to an ADR entity?

This law does not impose adherence to any ADR entity, only establishing a duty to inform about the existing entities. However, there is the case of necessary arbitration for essential public services, such as electricity, gas, water and waste, electronic communications, and postal services.

How should companies provide this information?

This information must be provided clearly, understandably, and appropriately for the type of goods and services sold or provided (Article 18, no. 2 of Law no. 144/2015). Thus:

On the website of the suppliers of goods or service providers, if one exists.

In contracts for the sale of goods or the provision of services between the supplier of goods or service provider and the consumer, when these take written form or constitute adhesion contracts.

If there is no written form, the information must be provided on another durable medium, namely on a sign affixed to the wall or posted at the sales counter or on the invoice given to the consumer.

When does this new regime apply?

Law no. 144/2015 of September 8 came into force on September 23, 2015, and suppliers of goods or service providers had 6 months, counted from that date, to adapt to this new regime. Thus, since March 23, 2016, companies must have this information available to their consumers.

ATTENTION: Informing consumers about the available ADR entities does not exempt suppliers of goods and service providers from providing consumers with the Complaints Book, which is mandatory under Decree-Law no. 156/2005, of September 15.