Alternative Resolution of Consumption Disputes
Law No 144/2015 of 08 September transposed Directive 2013/EU of the European Parliament and of the Council of 21 May 2013 on alternative consumer dispute resolution.
That law establishes the legal framework for the Alternative Resolution of Consumer Litigation, creating the Consumption Arbitration Network in Portugal.
What are consumer disputes?
They are disputes initiated by a consumer against a supplier of goods or service provider, which relates to contractual obligations resulting from contracts for the purchase and sale or provision of services, concluded between a good supplier or established service provider and consumers residing in Portugal and in the European Union (Article 2(1) of Law No 144/2015).
What is the ADR?
The ADR (Alternative Dispute Resolution) consists of mechanisms available to consumers and businesses to try and resolve consumer disputes outside the courts in a faster and inexpensive manner. The ADR covers mediation, conciliation and arbitration. The ADR procedure begins with an attempt to reach an agreement through mediation or conciliation. However, if such an agreement is not reached, the interveners may still appeal to the Arbitral Court by means of a simple quick procedure.
What are ADR entities?
They are independent bodies, with specialised staff that impartially help the consumer and the company to reach a friendly solution. These entities are authorised to mediate, reconcile and arbitrate consumer disputes. These entities must be included 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 national authority responsible 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 generic and regional competence, located in Lisbon, Porto, Coimbra, Guimarães, Braga/Viana do Castelo, Algarve and Madeira. There is also the national territorial centre (supletive), the CNIACC – National Centre for Information and Arbitration of Consumption Conflicts. There are also two specialised centres of expertise in the automotive and insurance sectors.
How does a company know which ADR entity to indicate to its consumers?
The place of conclusion of the contract for the purchase and sale of goods or service provision, which as a rule coincides with the place of establishment, shall determine the competent arbitration centre.
An undertaking which has only one or more commercial establishments in a given municipality should indicate only the ADR entity which has the competence to settle disputes in that municipality.
An undertaking operating throughout the national territory shall indicate all competent entities.
A vehicle repair shop, an insurance company or a travel agency shall indicate the specialised entities for those sectors.
Who is obliged to inform consumers about ADR entities?
All good suppliers and service providers, including those who only sell products or provide services over the Internet, are obliged to inform consumers about the available ADR entities or those who have voluntarily joined or are bound by law. Only service providers of General Interest without economic consideration such as social services provided by the State or on its behalf, health services and public services of complementary or higher education are excluded.
The obligations arising from Law No 144/2015 apply mutatis mutandis to all economic sectors not excluded by that law, including those in which specific legislation already exists which provides for the same obligation.
Is there any imposition of membership of an ADR entity?
This law does not impose membership of any ADR entity, only establishing a duty of information on existing entities. But there is the case of arbitration necessary 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, comprehensible and appropriate manner to the type of good and service that is sold or rendered (Article 18(2) of Law 144/2015).Therefore:
On the website of good suppliers or service providers, if any.
In contracts for the purchase and sale or provision of services between the good supplier or service provider and the consumer, where such contracts are in writing or constitute contracts of accession.
If there is no written form, the information must be provided on another durable medium, in particular on a sign affixed on the wall or placed on the sales desk or on the invoice delivered to the consumer.
Does the law provide a standard model of information to consumers?
No. However, a proposal for the formulation of a sign (Annex II) is attached.
Who is responsible for monitoring compliance with the obligation to provide information to consumers?
The Food and Economic Safety Authority and the sectoral regulators in their respective fields are bound to supervise the fulfilment of these duties, to investigate their infringement and to decide on such proceedings, including the imposition of fines and ancillary penalties if necessary.
What is the consequence of non-compliance with the obligation to provide information to consumers?
Non-compliance with the obligation to inform good suppliers or service providers shall constitute an infringement punishable by:
Fine between EUR 500 and EUR 5000 when committed by a natural person.
Fine between EUR 5000 and EUR 25 000 when committed by a legal person.
When does this new regime apply?
Law No 144/2015 of 8 September entered into force on 23 September 2015. Good suppliers or service providers had 6 months from that date to adapt to this new scheme. In this way, since 23 March 2016, companies must have this information available to their consumers.
ATTENTION: Consumer information on the available ADR entities does not prevent good suppliers and service providers from handing consumers the Complaints Book, which is mandatory in accordance with Decree-Law No 156/2005 of 15 September