In the 1970s, as teaches Antônio Pereira Gaio Júnior, the first European consumer protection directives emerged, with express reference to five categories of rights, which should be the core values of Community consumer legislation: "a) the right to health and safety protection; b) right to the protection of economic rights; c) right to compensation for damages; (d) the right to information and education; e) right to representation."
On 26 February 2001, the Presidents of the European Parliament, the European Commission, and the European Council signed the Charter of Fundamental Rights, also called the Treaty of Nice, intending to reform institutional aspects of the functioning of the European Community so far, provided for in other instruments, such as the Treaties of Rome and Maastricht.
Among the provisions of the Treaty of Nice title XIV, Article 153,[1] on consumer protection. From this provision, all the policies and actions of the European bloc have been defined and implemented, taking into account consumer protection requirements.
It is also up to the European bloc to promote and ensure a high level of consumer protection, for example, by promoting the "right to information, education, and organization to protect its interests.”[2] Article 38 calls for the policies of the European bloc to ensure that consumers' high level of defense of their interests is highlighted.
On consumer arbitration, European Commission Recommendation 98/257/EC regulates the principles applicable to entities responsible for out-of-court settlement of consumer disputes, with a view to mutual trust between consumers and out-of-court bodies in the Member States. This whole movement culminated in 2005 in creating (ECC – Net/ECC Network), with the task of facilitating access to alternative means of resolving consumer conflicts, especially cross-border ones.
Still on the subject, one cannot forget the contribution of the Green Paper,[3] especially in its four aspects: legal information, legal protection, representation of collective interests, and organization for the defense of rights, by Recommendations 98/257/EC and 2001/301/EC.
Other standards are crucial for strengthening alternative conflict resolution methods in consumer dispute resolution. For instance:
- Directive 2008/52/EC on aspects of mediation in civil and commercial matters;
- Directive 2000/31/EC on the legal aspects of the information society, in particular, e-commerce; and
- Directive 2008/48/EC, which deals with consumer contracts.
Recently, considering the resurgence of cross-border and digital trade in consumer goods and services, Directive 2013/11/EU on alternative dispute resolution (ADR Directive) was issued.
With the Ral Directive, we sought to preserve consumer protection wholly and efficiently because ADR entities should ensure respect for the principles of independence, impartiality, exemption, transparency, equity, speed, accessibility, confidentiality, and privacy, among others.
History of the theme in Portugal
In the system established in Portugal, the object of analysis of this article, decree-law 243/84, issued on June 17 and complemented by Law 31/86 of August 29, stand out among the alternative means of resolution of consumer disputes. In the text, the legislator promoted the creation of alternative means of conflict resolution, emphasizing the use of institutionalized arbitration (Decree-Law 425/86, December 27).
The practical emergence of arbitration centers in Portugal dates back to 1989 when the first Consumer Disputes Arbitration Centre was founded in Lisbon. The aim was to enable an efficient and rapid solution to consumer conflicts[4] based on a pilot project for access to justice carried out in partnership with the European Commission.
Already in the 1990s, the arbitration centers of the city of Porto (Center for Consumer Information and Arbitration of Porto - Cicap) and Coimbra (Center for Arbitration of Consumer Disputes of the District of Coimbra - CACCDC) emerged.[5]
Subsequently, on July 31, 1996, Law 24/96 was published, which establishes the legal regime applicable to consumer protection and provides, in Article 14, item 1, which is responsible for "to the bodies and departments of the Public Administration to promote the creation and support arbitration centers to resolve consumer conflicts."
In 2015, through Law 144/15, the Lusitanian parliament transposed into the national legal order the Directive 2013/11/EU already mentioned in this article.
Article 2 regulates the subject matter and deals with the use of out-of-court settlement of national and cross-border disputes promoted by an ADR entity when such disputes are initiated by a consumer against a supplier of goods or service providers and relate to contractual obligations arising from contracts for the purchase and sale or provision of services concluded between a supplier of goods or service providers established and consumers residing in Portugal and the European Union.
The purpose of the consumer arbitration network is to ensure the coordination, use of standard systems, and the harmonization of procedures followed in the activities of information, mediation, conciliation, and arbitration of consumer disputes by the consumer dispute arbitration centers it aggregates (Article 4 – Law 144/15).
Finally, Law 63/19, which makes the fifth amendment to Law 24/96 of July 31, amended by Law 85/98 of December 16, by Decree-Law 67/03, of April 8, by Law 10/13 of January 28, and by Law 47/14 of July 28, which establishes the legal regime applicable to the protection of consumers, determining the subjection of consumer conflicts of low economic value to the necessary arbitration or mediation, when that is the consumer's option and introduces the duty to provide information of the right to constitute a lawyer or solicitor.
Characteristics of the Portuguese
Entities responsible for such procedures shall ensure that the parties do not have to use a lawyer and may be accompanied or represented by third parties at any stage of the process.[6]
In a second study published by the European Union, judicial proceedings in the first instance in Portugal last from ten months to 3 and a half years, differently from what occurs with consumer arbitration procedures, with a maximum term of 90 days (may be extended).
The ADR entities should also ensure that procedures are free of charge or available to consumers by paying a reduced value rate, which increases interest in this method of dispute resolution (article 10, item 3, Law 144/15), which ends up having lower costs than those inherent in the initiation of legal proceedings.
On transparency, ADR entities must ensure disclosure on their sites of clear and easily intelligible information, especially about: entity contacts, registration in the official list of ADR entities, and nature and scope of disputes that can be resolved, among other obligations (Article 9, Law 144/15). They shall also provide such information to anyone who requests it in writing or by any means they deem appropriate.
In this compass, ADR entities ensure that natural persons and their collaborators conducting the arbitration proceedings have proven knowledge and qualifications in consumer dispute resolution and an adequate understanding of the law. They must provide training to the natural persons responsible for the ADR procedure and provide them with the knowledge needed to obtain qualifications for their duties, promoting the necessary steps to update knowledge (Article 7, Law 144/15).
ADR entities should also ensure the effectiveness and easy accessibility of online and conventional procedures for both parties, regardless of where they are located.
A point of particular attention relating to the principle of freedom concerns the binding or non-binding nature of the decision resulting from the ADR procedures. In practice, it should be ensured that the solution imposed is binding on the parties only if they have been informed beforehand of their binding nature and have expressly accepted it.
Here it is worth noting a difference between Directive 2013/11/EU and its Lusitanian developer standard, Law 144/15, since the former expressly provided that the Member States must ensure that, in ADR procedures aimed at resolving the dispute by the imposition of a solution, such a solution is binding on the parties only if they have been informed in advance of their character and have expressly accepted it.
If national rules provide that the solutions are binding on traders, the specific acceptance of the trader is not required.
An important position of the doctrine in this sense is that of the Spanish professor Pablo Cortés, for whom this solution of the European Directive was designed to prevent "arbitration clauses from appearing unexpectedly, perhaps included in the terms and conditions of a company operating on the Internet, and which may have the effect of subjecting the consumer to an online arbitration.”[7]
Article 14 of Law 144/15 also imposes some restrictions on arbitration, considering the maximum protection of the consumer, an issue on which it is worth highlighting the comment of Professor Jorge Liz Pegado: "thus reiterated the need to include the principle of legality within the framework of the Directive, ensuring that the decisions of ADR entities do not deprive consumers of the level of protection guaranteed by applicable law.”[8]
From this brief analysis, it is perceived that the modernization and professionalization of arbitration chambers and courts in Portugal are increasing requirements through strict technical criteria not only to ascertain the suitability of arbitrators and natural persons conducting the procedure but also the impartiality and credibility of the system as a whole.
To this end, it seeks to restrict, for example, the scope of the arbitration procedure in matters relevant relating to the legal assets of greater magnitude of the consumer, which could only be discussed in the Judiciary.
The consumer arbitration procedure should therefore ensure the measurement of the consumer's vice-free consent to submit to this alternative method of dispute settlement, all for the sake of the maximum protection of their rights, with the minimum guarantee of quality expected from the entities responsible for conducting these procedures.
[1] EUROPE. Treaty of Nice. "TITLE XIV CONSUMER PROTECTION - Article 153 - 1. In order to promote the interests of consumers and ensure a high level of protection of consumers, the Community will contribute to the protection of the health, safety and economic interests of consumers, as well as to the promotion of their right to information, education and organisation for the protection of their interests. 2. Consumer protection requirements shall be taken into account when defining and implementing other Community policies and actions. 3. The Community shall contribute to the achievement of the objectives referred to in paragraph 1 by: (a) measures adopted in application of Article 95 in the context of the completion of the internal market; (b) measures to support, complement and monitor the policy followed by the Member States. 4. The Council, acting pursuant to Article 251 and after consulting the Economic and Social Committee, shall adopt the measures provided for in paragraph 3(b). 5. Measures adopted pursuant to paragraph 4 shall not prevent Member States from maintaining or introducing stricter protection measures. Such measures shall be compatible with this Treaty and shall be notified to the Commission".
[2] Part of the doctrine considers the "embryo" of consumer protection in the European bloc to be provided for in Article 39(e) of the Treaty of Rome, concluded on 27.3.1957. The excerpt deals with the common agricultural policy, to, among other issues, "ensure reasonable prices in sales to consumers." (JUNIOR GAIO PEREIRA. Antonio. Consumer protection as a driving force for integrationist effectiveness: the European Union and its consumerist protectionmodel. Available in: http://www.mpsp.mp.br/portal/page/portal/documentacao_e_divulgacao/doc_biblioteca/bibli_servicos_produtos/bibli_boletim/bibli_bol_2006/RDCons_n.107.07.PDF. Accessed: April 15, 2022.
[3] The Green Paper on Consumer Access to Justice and Dispute Settlement in the European Single Market was an initiative of the European Commission in 1993 to address in a descriptive and comparative manner the procedures applicable to consumer disputes in the countries of the European bloc, as well as to draw up guidelines and strands for consumer protection. In this sense, see a study published by the Consumer Indebtedness Observatory of the University of Coimbra, PT. Available in: https://oec.ces.uc.pt/biblioteca/pdf/pdf_estudos_realizados/resolucao_alternativa.pdf. Access: 20.7.2022.
[4] On the creation of alternative means of conflict resolution in the period, see Decree-Law 243/84 and Law 31/86. About the creation of the Lisbon Arbitration Centre, see information available on the agency's website. Available in: https://sm.vectweb.pt/media/73/file/COMUNICADO-25%C2%BAAniv.pdf. Accessed: April 20, 2022.
[5] Information from all existing centres and their standards can be found at: https://www.arbitragemdeconsumo.org. Accessed: April 20, 2022.
[6] According to research conducted by the UK government, the costs of aDR are between 1/8 and 1/3 of the cost that would be to settle the claim in court. Cf: Government response to the consultation on implementing the Alternative Dispute Resolution and the Online Dispute Resolution Regulation, Department for Business, Innovation & Skills. 2014. Available at: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/377522/bis-14-1122-alternative-dispute-resolution-for-consumer.pdf. Accessed: April 20, 2022.
[7]CORTÉS, Pablo. "Un análisis comparativo de los mecanismos de resolución alternativa de litigios de consumo". In fashion Revista para el Análise del Derecho. Barcelona. v.4, pp. 8 and ss. =
[8] CAUGHT, Jorge Liz. "Alternative dispute resolution: from myth to culture of illusion." Portuguese Law Journal of Coimbra. Coimbra, n. 75, pp.45-83, 2013. Access: 25.7.2022.
