Alternative Consumer Dispute Resolution

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

This decree establishes the legal framework for Alternative Dispute Resolution mechanisms, 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, concerning contractual obligations arising from sales contracts or service provision contracts, concluded between a settled supplier of goods or service provider and consumers residing in Portugal and the European Union (Article 2(1) of Law nº 144/2015).

What is ADR?

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

What are ADR entities?

They are independent entities, with specialised staff, who impartially help the consumer and the company reach an amicable solution. These entities are authorised to mediate, conciliate and arbitrate 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 organising 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 Centres. Seven are of general competence and regional scope, located in Lisbon, Porto, Coimbra, Guimarães, Braga/Viana do Castelo, Algarve and Madeira. There is also the national territorial scope centre (supplementary), the CNIACC - National Centre for Consumer Conflict Information and Arbitration. There are also two specific competence centres specialising 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 usually coincides with the location of the establishment, determines the competent arbitration centre.

For example:

A company that has only one or more commercial establishments in a certain municipality should only indicate the ADR entity that has competence to settle disputes 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 must indicate the entities specialised for those 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 via the Internet, are obliged to inform consumers about the available ADR entities or those to which they have voluntarily adhered or to which they are bound by law. Only providers of General Interest Services without economic consideration are excluded, such as social services provided by the state or on its behalf, health services and public complementary or higher education services.

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 in which specific legislation already exists providing for an identical obligation.

Is there any requirement to join an ADR entity?

This law does not impose adherence to any ADR entity, only establishing a duty to provide information about existing entities. However, there is the case of mandatory 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, comprehensibly and appropriately to the type of good and service sold or provided (Article 18(2) of Law nº 144/2015). Thus:

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

In sales contracts or service provision contracts 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 on the sales counter or on the invoice delivered to the consumer.

Does the law provide for a standardised model of information to be provided to consumers?
No. However, a proposed wording for a sign is attached (Annex II).

 

Who is responsible for monitoring compliance with the obligation to provide information to consumers?

It is up to the Food and Economic Safety Authority and the sectoral regulators in their respective domains to monitor compliance with these duties, instruct the respective administrative offence proceedings and decide on these proceedings, including the application of fines and accessory sanctions if necessary.

What is the consequence of non-compliance with the duty to inform consumers?

Non-compliance with the duty to inform by suppliers of goods or service providers constitutes an administrative offence, punishable by:

A fine between €500 and €5000, when committed by an individual.

A fine between €5000 and €25,000, when committed by a legal person.

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

ATTENTION: The information provided to 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 15 September.