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 Consumer 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 contracts for the sale of goods or the provision of services, entered into 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 try to resolve consumer disputes outside the courts, in a quicker and less expensive way. ADR includes mediation, conciliation, and arbitration. The ADR process begins with an attempt at 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 specialized staff, who impartially help the consumer and the company reach an amicable solution. These entities are authorized to mediate, conciliate, and arbitrate consumer disputes. The said entities must be registered in 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 to organize 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 of these have general and regional competence, being located in Lisbon, Porto, Coimbra, Guimarães, Braga/Viana do Castelo, Algarve, and Madeira. There is also the national (supplementary) territorial scope centre, CNIACC - National Centre for Consumer Conflict Information and Arbitration. There are also two centres with specific competence specialized 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 centre.

For example:

A company that has only one or more commercial establishments in a given municipality should only indicate the ADR entity that has competence to resolve disputes in that municipality.

A company operating 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 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 are bound by law. Only providers of Services of General Interest 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 due adaptations, to all economic sectors not excluded by the said law, including those in which specific legislation already exists that provides for an identical obligation.

Is there any obligation to join an ADR entity?
This law does not impose adherence to any ADR entity; it only establishes a duty to provide information about existing entities. However, there is a 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 in a clear, understandable, and appropriate manner to the type of goods and services sold or provided (Article 18, no. 2 of Law no. 144/2015). Thus:

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

In contracts for the sale of goods or 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 placed on the sales counter or on the invoice delivered to the consumer.
Does the law provide for a standardized model for information to be provided to consumers?
No. However, a proposal for wording for a sign is attached (Annex II).

 

Who is responsible for supervising compliance with the obligation to provide information to consumers?
The Food and Economic Safety Authority (ASAE) and the sectoral regulators, in their respective areas, are responsible for supervising compliance with these duties, instructing the respective administrative offence proceedings, and deciding on these proceedings, including the application of fines and ancillary sanctions if necessary.

What is the consequence of non-compliance with the duty to provide information to consumers?
Non-compliance with the duty of information by suppliers of goods or service providers constitutes an administrative offence, punishable by:

A fine of between €500 and €5,000, when committed by an individual.

A fine of between €5,000 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: Informing consumers about the available ADR entities does not exempt suppliers of goods and service providers from providing consumers with the Complaint Book, mandatory under Decree-Law no. 156/2005, of 15 September.