IPA Project proposals regarding ADRs and ODRs in Serbia Prof. dr Thierry Bourgoignie Doc. dr Tatjana Jovanić 28. June

The existing legal framework of the ADR in Serbia Law on Mediation, Law on Arbitration Law on Consumer Protection: Chapter XII Out-of-Court Settlement of Consumer Disputes – Definition of a consumer dispute (Art. 132) + Art. 488 of the Law on Civil Procedure: ‘complaints arising from the contractual relationship between the consumer and the trader’ with the exception of disputes arising from the death, body injury or damage to health, providing medical or legal services and the transfer of property rights on immovable. – The process of initiating the out of court settlement procedure for consumer disputes (Art. 133) – The legal basis for mediators and arbitrators (Art. 134) – Right to judicial protection (Art. 135) – Subsidiary application of other laws related to mediation, arbitration ( Art. 136) 2

The existing legal framework of the ADR in Serbia Network? Legal advice centers run by consumer organizations Other private or semi-private institutions (Chambers of commerce + Court of Honor, YUTA, call centers, etc…) Public bodies MIFTT Consumer Protection Center Inspections including market Inspectorate on duty Regulatory bodies Mediation Center (Belgrade + 27 regional centers): Dismantling (April 2013) and move towards the liberalisation of mediation and private schemes urges for a new framework, with the focus on criteria for out of court bodies 3

The need for a reform Main goal The existing Articles 132 to 136 of the Law on Consumer Protection should be replaced with a new set of articles, which set the legal basis for building- up a network of out-of-court entities for the resolution of consumer disputes throughout Serbia. Such a network will directly contribute to a better enforcement of the provisions of the Law on Consumer Protection. The scope of application and main features of the out-of-court procedures for the resolution of consumer disputes shoud be set in the law, while more detailed operational rules should be defined by the implementing Regulation. 4

The need for a reform Justifications for amending the existing LCP provisions.  To update with new EU developments: – Directive of the European Parliament and of the Council on alternative dispute resolution for consumer disputes and amending Regulation (EC) No 2006/2004 and Directive 2009/22/EC (Directive on consumer ADR), COM/2011/0793 final. – Regulation of the European Parliament and of the Council on online dispute resolution for consumer disputes (Regulation on consumer ODR), COM/2011/0794 final. Both EU acts adopted in March

 To designate the Ministry in charge of consumer protection as the competent authority to regulate and supervise the ADR schemes;  To enable the Competent Ministry to issue a Regulation on the criteria for such schemes to offer impartial, transparent, effective, independent, fast and fair alternative dispute resolution procedures;  To enable the competent Ministry to list out-of-court entities which comply with the requirements set for the operation of such ADRs/ODRs schemes;  To require from the competent Ministry to publish and send to the National Council for Consumer Protection regular reports on the development and functioning of out-of-court entities (yearly? Every 2 years?);  To develop an online dispute resolution platform and enable the Ministry to have powers to regulate, run and supervise it ("ODR platform");  To grant to the Ministry the authority to develop a certification marking system for the ADR/ODRs systems and traders who conform to the set requirements. 6

Most important issues identified in Project Proposal for amendments to the Law on Consumer Protection SCOPE OF APPLICATION (existing Art.132) = CONSUMER DISPUTES IPA Project proposal: “consumer disputes are disputes arising from contractual obligations stemming from sales contracts or service contracts or any other relationship between a consumer and a trader.” – The ceiling is put at 10,000 EUR dinar counter value. – Exclusions are made in line with the Directive. 7

Most important issues identified in Project Proposal for amendments to the Law on Consumer Protection OUT OF COURT SETTLEMENT PROCEDURE (existing Art.133) LCP, Article 133 being upgraded in order to:  introduce the power of the Ministry to prescribe the complaint form  stipulate that the out-of-court settlement procedure is considered confidential and urgent.  confirm that both consumer and trader voluntarily decide to initiate the proceedings or respond.  clearly state that such schemes may not result in the consumer being deprived of the protection afforded by mandatory provisions of the laws of the Republic of Serbia. 8

LEGAL BASIS GIVEN TO THE MINISTRY IN CHARGE OF CONSUMER PROTECTION FOR SUPERVISING AND MONITORING ADR SCHEMES FOR CONSUMER DISPUTES AND CONSUMER COMPLAINTS REGISTER (CCR)  Consumer complaints are an essential source of information for policy- making in the area of consumer protection. Their collection and registration must be systemized in order to get reliable, detailed and representative data. Competence is given to the Ministry in charge of consumer protection to develop, manage and monitor the CCR system built up under this IPA Project. Duty of the competent Ministry to publish and send to the National Council for Consumer Protection a report on the operation of the Consumer Complaints Register. 9

LEGAL BASIS GIVEN TO THE MINISTRY IN CHARGE OF CONSUMER PROTECTION FOR SUPERVISING AND MONITORING ADR SCHEMES FOR CONSUMER DISPUTES AND CONSUMER COMPLAINTS REGISTER (CCR)  ADRs/ODRs: the Competent Ministry shall take steps to enable individual consumers to make use, on a voluntary basis, of out-of-court entities for the resolution of their disputes with traders. Expected steps: - definition of for the operation of ADRs schemes for the resolution of consumer disputes. - building-up a network including public and private ADRs bodies -supervision/monitoring -reporting to NCCP every year or 2 years -information/awareness campaigns -funding? 10

REGULATION/RULEBOOK ON OUT OF COURT ENTITIES FOR THE RESOLUTION OF CONSUMER DISPUTES  The competent Ministry shall issue a Rulebook on the criteria for such schemes to offer impartial, transparent, effective, independent, fast and fair alternative dispute resolution procedures. This Regulation shall stipulate rules on access to alternative dispute resolution, criteria for expertise, impartiality and independence, other operational rules as well as information for consumers and the role of the Ministry as a competent authority.  The competent Ministry shall prepare a list of out-of-court entities which comply with the requirements set out in the LCP and implementing Rulebook. Project Proposal specifies the information on such entities, including contact details, fees, types of disputes covered, sectors and categories of disputes, the presence of parties, binding or non-binding nature of the outcome of procedure, the grounds on which the out-of-court entity may refuse to deal with the dispute etc. 11

RULEBOOK ON OUT OF COURT ENTITIES FOR THE RESOLUTION OF CONSUMER DISPUTES  The Rulebook will prescribe the minimum content of the report on the development and functioning of out-of-court entities to be published and sent to NCCP every year or 2 years by the competent Ministry. IPA Project has proposed the minimum content of this Report in line with new EU legislation.  The competent Ministry may introduce and set the criteria for a special certification marking – as incentive for traders. 12

RELATIONSHIP WITH OTHER LAWS Unlike the existing article 136 of the LCP which formally does not prescribe mandatory application of the provisions of this chapter of the LCP, but opens the door for other laws and regulations to apply to consumer disputes as well, the proposed new article 136 should confirm the rigour of the Law on Consumer Protection making its provisions and implementing Regulation prevailing on provisions which are in conflict with its rules. 13

A brief overview of the scope of the proposed Rulebook on ADR schemes and ODR ACCESS AND PRINCIPLES APPLICABLE TO ALTERNATIVE DISPUTE RESOLUTION – Access to alternative dispute resolution – Expertise, independence and impartiality of ADR bodies and mediators/arbitrators – Legality – Rules to ensure transparency, effectiveness and fairness of such bodies and procedures – Liberty: not binding on the consumer if it was concluded before the dispute has materialised and if it has the effect of depriving the consumer of his right to bring an action before the courts for the settlement of the dispute 14

A brief overview of the scope of the proposed Regulation on ADR schemes and ODR ACCESS AND PRINCIPLES APPLICABLE TO ALTERNATIVE DISPUTE RESOLUTION – Effect of ADR procedures on limitation and prescription periods: parties who have recourse to ADR procedures, the outcome of which is not binding, in an attempt to settle a dispute are not subsequently prevented from initiating judicial proceedings in relation to that dispute as a result of the expiry of limitation or prescription periods during the ADR procedure, without prejudice to provisions on limitation or prescription contained in international agreements to which Serbia is a part of. 15

INFORMATION AND COOPERATION – Traders should inform consumers about the ADR entity or ADR entities by which they are covered, when the trader commits to use these entities to resolve disputes with consumers. The information shall include the address of the relevant ADR entity or ADR entities' website. – General information: The Ministry in charge of consumer protection shall encourage that relevant consumer associations and business associations make publicly available on their websites and, by any other means they consider appropriate the list of ADR entities and shall ensure appropriate dissemination of information on how consumers can access ADR procedures for resolving disputes. – Information to be notified to the Ministry in charge of consumer protection as competent authority by dispute resolution entities – Role of the Ministry as the competent authority 16

SECTION ON ODR SCHEMES – Establishment and operation of the Online dispute resolution scheme: Definitions and functions of the platform, role of the Ministry as the competent body – Online dispute resolution contact point – Submission of a complaint: elements of the procedure; Processing and transmission of a complaint; Resolution of the dispute – Processing of personal data and data confidentiality 17

– Consumer information: traders engaging in online sales or service contracts and online intermediaries, which provide traders with a possibility to offer goods or services on their websites, shall provide on their websites an electronic link to the ODR platform and their address. This link should be easily accessible for consumers. This information should also be provided in the general terms and conditions applying to online sales and service contract. 18

ANNEX of the Rulebook – Form for submitting a dispute  Format  Content: information to be provided when submitting a dispute. 19