Alternative dispute resolution for consumer disputes: CJEU specifies information obligations

In its recent judgment of June 25, 2020 (case C-380/19, ECLI:EU:C:2020:498), the Court of Justice of the European Union (“CJEU”) ruled on companies’ obligations to provide information on alternative consumer dispute resolution systems.

Directive 2013/11/EU on alternative dispute resolution for consumer disputes was passed to ensure consistent regulation of alternative dispute resolution (“ADR”) systems for consumer disputes in the European Union. In view of the growing importance of e-commerce and crossborder commerce right now, the various procedures for ADR need to function correctly and effectively, with similar quality requirements adhered to throughout the EU, and they need to apply to all types of domestic and crossborder disputes. All this contributes to a high level of consumer protection and helps build the citizens’ trust in the proper functioning of the internal market.

Of the various issues the directive regulates, what interests us is the obligation of information it imposes on businesses. According to Article 13 of the directive, if a business has agreed to or is required to resort to certain ADR entities to resolve consumer disputes, it must inform consumers of this circumstance and provide them the address of the website of the ADR entity or entities in question. That information must be provided in a clear, comprehensible and easily accessible way on the business’s website, where one exists, and if applicable in the general terms and conditions of sales or service contracts between the company and the consumer.

In the judgment cited above, the CJEU specifically addressed the issue of when this information must be provided in the general terms and conditions of contracts.

Factual background

The defendant Deutsche Apotheker- und Ärztebank eG (“DAÄB”) operates a website through which contracts cannot be signed.

• The site’s legal notice informs users that DAÄB is required to participate in ADR proceedings with a consumer mediation entity.
• The website provides a copy of the general terms and conditions of the contracts that DAÄB signs with consumers, but it does not include information on the defendant being subject to ADR proceedings for consumer disputes.
• When DAÄB signs a contract with consumers, they are given a copy of those general terms and conditions and its fee terms and conditions. Only the latter provide information on DAÄB’s commitment to submit to ADR proceedings.

The claimant consumers’ association argued that the information on DAÄB’s commitment to resort to a consumer mediation entity must be provided in its general terms and conditions.

In the first instance, the Regional Court of Düsseldorf dismissed the appeal on the grounds that (i) publishing the general terms and conditions on the website is not the same as using them, so no duty arises to inform consumers about the ADR mechanisms; and (ii) the company fulfills its obligation to inform by providing consumers a separate document with the terms and conditions that includes the required information (the document on the fee terms and conditions) when the contract is signed.

In the second instance, the Higher Regional Court of Düsseldorf submitted the following questions to the CJEU for a preliminary ruling:

• Are businesses required to provide information on ADR proceedings in the general terms and conditions published on their websites, even though contracts cannot be signed over the website?
• Is it sufficient for the information in question to be provided to consumers in other ways, both on the website and when the contract is signed?

The CJEU’s decision

The CJEU concluded that businesses have the obligation to inform consumers about ADR proceedings in the general terms and conditions of their contracts if those terms and conditions are displayed on their websites.

• The information on ADR mechanisms must be on the company’s website, where one exists, and, if the general terms and conditions of the contracts are available on the website, the information must also be included in them.

• Article 13.2 of the directive does not limit the obligation of information to cases where the company signs contracts over its website.

• To fulfill the obligation of information, it is not sufficient for the company to provide the information in other documents or in dropdown menus on the website.

• For the information on the ADR mechanisms to be useful for consumers, they must receive it in due time before signing the contract. Therefore, it is not sufficient for consumers to only receive this information when they sign the contracts, whether in the general terms and conditions or a separate document.

By Ainhoa Rey