Alternative Resolution of Consumer Disputes

A Law No. 144/2015 of September 08, came to transpose Directive 2013 / EU, of the European Parliament and of the Council, of 21 May 2013, on the alternative resolution of consumer disputes.

The referred diploma establishes the legal framework for the mechanisms of Alternative Resolution of Consumer Disputes, creating the Consumer Arbitration Network in Portugal.

  1. What are consumer disputes?

These are disputes initiated by a consumer against a supplier of goods or service provider, which respect contractual obligations resulting from purchase and sale contracts or provision of services, concluded between a supplier of goods or service provider established and consumers residing in Portugal and in the European Union (article 2 nº 1 of Law nº 144/2015.

  1. What is RAL?

ADR are mechanisms available to consumers and businesses to try to resolve consumer disputes outside the courts, in a faster and less expensive way. ADR covers the mediation, the conciliation and arbitration. The ADR process begins with an attempt to reach an agreement through mediation or conciliation. However, if this agreement is not reached, the intervening parties can still appeal to the Arbitral Tribunal, through a simple and quick process.

  1. What are ADR entities?

They are independent entities, with specialized personnel, who impartially help the consumer and the company to reach a friendly solution. These entities are authorized to mediate, conciliate and arbitrate consumer disputes. These entities must be registered in the list provided for in article 17 of Law No. 144/2015.

  1. Who is responsible for managing the list of ADR entities?

A Directorate-General for Consumers is the competent national authority to organize the registration and dissemination of the list of ADR entities (see ANNEX I).

  1. How many ADR entities exist in Portugal?

In Portugal, there are ten Consumer Conflict Arbitration Centers. Seven are of generic competence and regional in scope, located in, Lisbon, Porto, Coimbra, Guimarães, Braga / Viana do Castelo, Algarve and Madeira. There is also the national territorial (supplementary) center, the CNIACC - National Center for Information and Arbitration of Consumer Conflicts. There are also two specific competence centers specializing in the automotive and insurance sectors.

  1. How does a company know which ADR entity to indicate to its consumers?

O place of conclusion of the contract for the purchase and sale of goods or the provision of services, which as a rule coincides with the place of establishment, determines the competent arbitration center.

For example:

  • A company that has only one or more commercial establishments in a given municipality, must indicate only the ADR entity that has the competence to resolve conflicts in that municipality.
  • A company that carries out its activity throughout the national territory, must indicate all the competent entities.
  • A vehicle repair shop, an insurance company or a travel agency must indicate the specialized entities for these sectors.
  1. Who is obliged to inform consumers about ADR entities?

All suppliers of goods and service providers, including those that only sell products or provide services over the Internet, are obliged to inform consumers about the ADR entities available or to which they have voluntarily joined or to which they are bound by law. Only providers of Services of General Interest without economic consideration are excluded, such as social services provided by or on behalf of the state, health services and public services of complementary or higher education.

The obligations arising from Law No. 144/2015 apply, with the necessary adaptations, to all economic sectors not excluded by said law, including those in which there is already specific legislation that provides for the same obligation.

  1. There is some imposition of adhesion to an ADR entity?

This law does not impose adherence to any ADR entity, establishing only a duty to inform about existing entities. But, there is the case of the necessary arbitration for essential public services, such as for electricity, gas, water and waste, electronic communications and postal services.

  1. How should companies provide this information?

This information must be provided in a clara, understandable e proper the type of good and service that is sold or provided (article 18º nº 2 of Law nº 144/2015). So:

  • No website goods suppliers or service providers, if any.
  •  contracts of purchase and sale or provision of services between the supplier of goods or service provider and the consumer, when these take a written form or constitute subscription contracts.
  • In the absence of a written form, the information must be provided in another durable medium, namely in a posted sign on the wall or affixed to the sales counter or invoice delivered to the consumer.
  1. The law provides for a standardized model of information to be provided to consumers?

No. However, attached is a proposal for the formulation of a sign (Annex II).

  1. Who is responsible for monitoring compliance with the information obligation to be provided to consumers?

Up to Food and Economic Security Authority and sectoral regulatorsin the respective domains, the inspection of the fulfillment of these duties, the instruction of the respective administrative offense processes and the decision of these processes, including the application of fines and accessory sanctions if necessary.

  1. What is the consequence of non-compliance with the duty to provide information to consumers?

Failure to comply with the duty to provide information to suppliers of goods or service providers constitutes offense, punishable by:

  • Fine between € 500 and € 5000, when committed by a natural person.
  • Fine between € 5000 and € 25, when committed by a legal person.
  1. 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, counting from that date, to adapt to this new regime. This way, since March 23, 2016 companies must have this information available to their consumers.

HEADS UP: Consumer information on available ADR entities does not exempt suppliers of goods and service providers from providing consumers with the Complaint book, mandatory under the terms of Decree-Law No. 156/2005, of 15 September.

List of Entities Anexo 1