Introduction

The Nordic and Baltic countries have a lot in common in alternative dispute resolution (ADR). Not only does the same EU regulation, the ADR directive, apply to all countries' ADR schemes but the countries also build on the same ideas and thinking on how to organize and deliver out-of-court dispute resolution. 

However, looking closer it is clear that there are also differences when comparing ADR in the Nordic and Baltic countries. The number of notified ADRs differs and there are different procedures and working methods. Furthermore, all countries have their own different limitations preventing them from offering consumers a full ADR coverage in reality. 

We have done this comparative study of ADR in the Nordic and Baltic countries to gain more insight into the similarities and the differences in the ADR landscapes in our countries. The reasoning behind doing this comparative study is three folded:

1. We want to provide our Network, the ECC-Net, with better understanding on how ADR works in the Nordic and Baltic countries, thereby qualifying the work we do in the Network with assisting consumers in cross-border disputes.
2. The study is also done to provide information to the European Commission, Nordic and Baltic ministries and other stakeholders. Information that can be used as insight and inspiration during the expected revision of the European ADR and ODR legislation.
3. Finally, it is also the aim of the study to provide national ADR competent authorities and others with knowledge and data about the ADR schemes in this region. This way we would like to help create a better basis for each of our countries evaluation of national ADR schemes – “Learn from your neighbours” is often the best and easiest way to find inspiration for improvements.

Observations

It is not as such the scope of this study to deliver recommendations, but the discussions between our centers during an ADR workshop hosted by ECC Latvia in December 2022 with the purpose of getting in depth understanding of each countries ADR schemes nevertheless revealed a few important observations. 

In general, trader engagement in ADR and trader compliance with decisions are very strong in the Nordic and Baltic region. There are several reasons for this: 

Some countries specifically mention that ADR bodies are well-reputed by traders and therefore even the non-binding decisions from an ADR are often accepted. Other ADR entities ensure trader engagement and compliance due to their binding decisions or the also well-used type of decision where the trader is bound by the decision if no reaction from the trader. Such decisions ensure that traders that are not actively disputing a decision are bound by such decision. As such, this type of decision does not prevent the traders from taking a dispute to court, but at the same time it safeguards the value of an ADR decisions from the consumers perspective in the situations where a trader simply ignores the ADR procedure. 

Very often consumers from other countries have difficulties using the national ADR entities. This is the situation in all countries. Language barriers, difficulties in understanding procedures and ADRs' non-acceptance of cases where applicable law are not national law is some of the most often mentioned reasons why consumers from other EU countries have difficulties taking advantages of the ADR schemes. 

The ECC's in all Nordic and Baltic countries work in different ways to support the national ADR schemes. From supporting ADRs via active participation in decision-making and interpretation of EU law and practice to concrete assistance to consumers from other EU countries in order for them to navigate through the complaint procedure at the different ADRs. The services provided by ECCs varies from country to country and it seems relevant to consider if such services towards ADRs and consumers can be aligned and better supported to strengthen ADR in cross-border disputes. 

ECC Denmark, ECC Estonia, ECC Finland, ECC Iceland, ECC Latvia, ECC Lithuania, ECC Norway, ECC Sweden

Survey 

The comparative study is based on data gathered by our centers in October and November 2022. The data was further qualified in discussions that were carried out at the joint workshop in Riga. 

With this report, we provide a unique and easily accessible comparative study of ADR schemes in the Nordic and Baltic region. The data is not meant to be an exhaustive presentation of countries included in this study; neither does it resemble the official ADR reports produced by the national competent authorities. 

Instead, this study is looking into some of the most important characteristics of the ADR schemes from the practitioners’ perspective, for example the different limitations that can hinder consumers from turning to the ADRs. The focus in this study is also on ADR complaint handling barriers linked to cross-border disputes, as the ECC-Net's main task is to assist consumers that are involved in a cross-border dispute with a trader. 

Each dataset is accompanied by a few comments and, where relevant, we have also provided some insights that cover in-depth information on some of the interesting findings, and/or some good examples identified in one of the participating countries.

ADR accessibility 

English is the most broadly accepted foreign language and can be used in many ADR entities in the Nordic and Baltic countries. But in all countries there are ADR entities that require complaints to be filed only in official national language(s). 

Almost all ADR entities only accept cases where the applicable law is the national law. In all countries it will often not be possible to file a complaint at an ADR entity if the trader is not established in the same country as the ADR. 

Trader engagement is mainly voluntarily but most ADRs in the Nordic and Baltic countries can make decisions regardless of whether the trader participates or not. This way the procedural rules give traders a strong incitement to participate in ADR. 

Although all sectors seem to be covered in most countries there are in reality some circumstances that limit the coverage in reality: Full ADR coverage in reality is reduced by monetary thresholds in most countries, as well as due to cases being rejected if the trader is not established in the country of the ADR, or because the applicable law is not the national law.

Image

ADR schemes and procedures

The Nordic and Baltic ADR schemes cover a wide range of different ADR models: Complaint Boards, Mediation, Conciliation, Commission, Decisions by public authorities, arbitration and Ombudsman. 

The average case handling time varies not only from country to country but also from one ADR entity to another. From 58 days as the shortest average case-handling time and 16 months as the highest. 

All countries have ADR entities that use expert opinions as part of the decision making.

Image

The growing threat of online counterfeiting

Counterfeiting has become a significant concern for consumers, traders, and authorities across Europe. The rise of online shopping has made it easier for counterfeit goods to enter the market, posing substantial risks to consumer health, safety, and finances. This report delves into the various consequences and challenges associated with buying counterfeit products online.

Health and safety risks

One of the most alarming aspects of counterfeit goods is the potential health risk they pose. Counterfeit cosmetics, for example, have been found to contain harmful substances such as arsenic and lead, which can cause severe allergic reactions and other health issues. Counterfeit medicines are even more dangerous, often containing incorrect dosages or harmful chemicals, which can lead to life-threatening conditions​(The impact of counterfe…)​.

Financial and legal consequences

Purchasing counterfeit goods can also lead to significant financial losses. Consumers might pay for products that are seized and destroyed by customs authorities, resulting in no product and no refund. Moreover, counterfeit goods often lack the quality and durability of genuine products, leading to further financial loss when they fail or cause damage​(The impact of counterfe…)​.

From a legal perspective, buying counterfeit products can inadvertently involve consumers in the infringement of intellectual property rights. This can result in legal actions against the consumer, adding to the financial burden and legal complications​(The impact of counterfe…)​.

Tips to avoid counterfeit products

Consumers can take several steps to protect themselves from counterfeit goods:

1. Verify seller credentials
   Always buy from reputable sellers and verify their credentials.
2. Check product reviews
   Look for reviews and ratings from other buyers.
3. Examine the product
   Compare the product details, such as logos and packaging, with those of the genuine product.
4. Beware of bargains
   If a deal seems too good to be true, it probably is.
5. Use secure payment methods
   Opt for payment methods that offer buyer protection, such as credit cards​(The impact of counterfe…)​.

Conclusion

The fight against counterfeiting requires the combined efforts of consumers, traders, and authorities. Consumers need to stay informed and vigilant to protect themselves and support the enforcement of intellectual property rights. By being aware of the risks and taking preventive measures, consumers can avoid the pitfalls of counterfeit goods and contribute to a safer, fairer market.

Want to know more? 

Download the full report to gain deeper insights into the impact of counterfeiting on online consumer rights in Europe and learn more about how you can protect yourself.

Highlights of the report

The report prepared by the European Consumer Centres Network (ECC-Net) sheds light on the escalating issue of fraud in cross-border e-commerce, presenting a comprehensive analysis of the problem and offering practical advice to consumers. Here are some of the key highlights:

• Prevalence of online shopping
  • Nearly 70% of Europeans regularly use the internet, with 45% shopping online and 11% engaging in cross-border purchases​(FOREWORD Fraud in cross)​.
  • E-commerce offers numerous advantages such as a vast selection of goods, competitive prices, and the convenience of 24/7 shopping from home​(FOREWORD Fraud in cross)​.
• Risks and types of fraud
  
  • The report identifies several types of fraud that are prevalent in cross-border e-commerce. These include fraudulent websites, phishing scams, identity theft, and online dating fraud​(FOREWORD Fraud in cross)​.
  • Fake websites often sell popular electronic products at significantly reduced prices but fail to deliver the goods, leaving consumers without their money or the products they ordered​(FOREWORD Fraud in cross)​.
  • Investment scams, particularly in the Forex and binary options markets, are highlighted as emerging threats. These scams involve traders outside the EU who are not authorized to sell their products within the EU, leading to substantial financial losses for consumers​(FOREWORD Fraud in cross)​.
• Impact on consumer behavior
  
  • The fear of online fraud has significantly impacted consumer behavior, deterring many from engaging in cross-border e-commerce​(FOREWORD Fraud in cross)​.
  • Despite the fears, the incidence of actual fraud experienced by consumers is relatively low, with less than 0.2% of online shoppers encountering problems such as stolen payment card details or misuse of personal data​(FOREWORD Fraud in cross)​.
• Consumer protection and advice
  
  • The ECC-Net plays a crucial role in providing consumers with information about their rights under European consumer legislation and assisting in the resolution of cross-border complaints​(FOREWORD Fraud in cross)​.
  • Practical advice is offered to consumers on how to avoid falling victim to scams, such as being cautious about too-good-to-be-true deals, verifying the credibility of websites, and using secure payment methods​(FOREWORD Fraud in cross)​.
• Case studies
  
  • The report includes case studies that illustrate common scams. For example, a Bulgarian consumer lost money to a fraudulent seller on Skype who failed to deliver the purchased mobile phones and demanded additional payments under false pretenses​(FOREWORD Fraud in cross)​.

Want to know more? 

Download the full report to gain deeper insights into the various types of fraud in cross-border e-commerce and learn how consumers can protect themselves from becoming victims.

ECC-Net’s tips for consumers: navigating cross-border car purchases

When purchasing a car across EU borders, consumers can benefit from careful planning and vigilance. ECC-Net provides these essential tips to help consumers make informed decisions and avoid common pitfalls:

Conduct thorough research

• Compare prices
  Consumers should research and compare car prices across different countries. It's important to consider variations in standard equipment and features, and to factor in all additional costs such as registration fees, taxes, and insurance.
• Consider all costs
  In addition to the car’s price, consumers should be aware of other expenses like VAT, environmental taxes, and any costs related to transit plates and insurance.

Verify the legitimacy of the seller

• Check seller credentials
  Consumers should verify the legitimacy of the seller by consulting public company registers and confirming contact details. Online buyers should ensure the website is trustworthy, with clear terms, conditions, and legal guarantees.
• Be wary of red flags
  Caution is advised when dealing with new or unverified websites, multiple contact points, or suspiciously low prices.

Ensure comprehensive vehicle documentation

• Request essential documents
  Before finalizing a purchase, consumers should obtain and verify all necessary documents, including the vehicle’s serial number, proof of ownership, service history, and registration papers.
• Authenticate documentation
  It is crucial to ensure that all documents are authentic to avoid complications with vehicle registration and ownership.

Assess the car’s true value

• Verify market value
  Consumers should use established tools and resources to determine the car’s market value. Be cautious of offers that seem too good to be true and verify the vehicle’s history and valuation through multiple sources.

Avoid fraud

• Secure payment methods
  Consumers should use secure payment methods and avoid unconventional payment requests or advance deposits. Be aware of common fraud schemes, such as fake vehicle listings and overpayment scams.
• Recognize warning signs
  Familiarity with common fraud indicators, such as unusually low prices or requests for payments through anonymous channels, can help avoid scams.

Review contracts carefully

• Understand contract terms
  It is important for consumers to thoroughly review contract terms before signing. Understanding legal guarantees and cooling-off rights is crucial, especially in distance and off-premises contracts.

Seek legal and dispute resolution support

• Explore dispute resolution options
  Consumers facing issues with cross-border purchases should contact the European Consumer Centre for support. Familiarizing themselves with the dispute resolution process can help in enforcing their rights under EU law.

Want to know more?

For more detailed information download the full paper. Additionally, for resources on cross-border car purchases, consumers can refer to the full guidelines available here. This guide offers comprehensive insights to assist consumers in navigating the complexities of international car buying.

Understanding chargeback rights in Europe: a summary

Recent advancements in European consumer protection have significantly enhanced the reliability of e-commerce across Europe. As outlined in a comprehensive report by the European Consumer Centres Network (ECC-Net), the chargeback system plays a crucial role in safeguarding consumers.

What is chargeback?

Chargeback is a procedure allowing consumers to recover funds from their bank if a transaction is unauthorized or if the merchant fails to deliver goods or services as promised. Initially designed to address fraud, chargeback now also covers situations such as merchant bankruptcy or disputed transactions.

Key findings

1. Legal framework
   The report emphasizes two main directives—Directive 2007/64/EC on payment services and Directive 2008/48/EC on credit agreements—that underpin chargeback rights in the EU, Norway, and Iceland. These directives ensure that consumers are protected in cases of unauthorized card use or merchant insolvency.
2. Implementation variability
   While chargeback rights are established across member states, the implementation can vary. For instance, some countries extend chargeback rights to transactions made with debit cards, a practice not uniformly adopted across all nations.
3. Out-of-Court dispute resolution: The report highlights the availability of out-of-court dispute resolution mechanisms in all participating countries, though their effectiveness and accessibility can differ. Notably, some countries mandate participation in these systems, while others leave it optional.
4. Challenges and recommendations: Despite robust legal protections, consumers often face challenges in accessing chargeback services due to inadequate information or varying national practices. The report suggests that banks should better inform consumers about chargeback options and that ECCs should continue to advocate for clear, consistent chargeback procedures.

Case studies

• Euroteam
  Consumers who purchased Olympic tickets online were able to use chargeback after the seller went bankrupt, illustrating the practical application of chargeback in protecting consumer rights.
• Formlife
  In this case, ECC Norway's intervention helped consumers recover funds after unauthorized charges were made for products supposedly ordered via Facebook ads.

Want to know more?

While chargeback rights are broadly recognized, the application and ease of accessing these rights can vary. Consumers are advised to be proactive in understanding their chargeback options and to seek assistance from consumer protection agencies when necessary. Download the pdf to read the full paper.

Growing importance of trust marks

As e-commerce continues to expand across Europe and the EU, ensuring consumer protection and security has become increasingly vital. The rise in online shopping has unfortunately also led to a greater risk of scams and fraudulent activities. Key concerns for online shoppers include security, privacy, unfamiliarity with services, lack of direct interaction, and the credibility of information, with security emerging as the primary focus.

Role of trust mark organizations

Trust mark organizations play a crucial role in addressing these concerns. These organizations certify e-merchants based on standards related to security, privacy, and business practices, providing a visual assurance to consumers that a trader adheres to established guidelines. Beyond basic compliance, some trust marks offer additional benefits, such as extended cooling-off periods and extra complaint resolution options.

Variability and awareness of trust marks

Despite the presence of numerous national and cross-border trust mark schemes, consumer awareness and understanding remain low. The ECC-Net’s recent report highlights significant variations in the number of active trust marks across different European countries, ranging from one in Denmark and Estonia to six in France. Currently, there are 54 distinct trust marks in Europe, with many countries lacking any such schemes.

ECC-Net project on trust marks

The ECC-Net has undertaken a project to gather and present information on these trust marks in a consumer-friendly manner. This initiative aims to improve transparency by detailing certification criteria and making this information readily accessible on ECC-Net websites. Key findings from the report include:

• Consumer awareness
  A survey indicated that while trust marks are deemed important by consumers, many are unaware of what these marks signify and how to identify them.
• Certification and transparency
  Most trust marks provide information on certification processes, but multilingual support and the visibility of such information vary.
• Complaint and dispute resolution
  Many trust marks offer mechanisms for resolving disputes, though the availability of online dispute resolution (ODR) services is limited.
• Fees and membership
  Trust marks typically charge membership fees, which can vary widely. They generally allow foreign traders, although this can create challenges related to multilingual support and consumer accessibility.

Want to know more?

The ECC-Net’s report recommends increased consumer education about trust marks, uniform practices across Europe, and enhanced transparency. By addressing these areas, trust marks can more effectively contribute to a secure and trustworthy e-commerce environment, promoting consumer confidence and facilitating cross-border shopping. Download the pdf to read the full paper.

Introduction

The significance and benefits of Alternative Dispute Resolution (ADR) for consumer issues are increasingly recognized not only by consumer organizations, national authorities, and European institutions but also by the business sector. ADR offers a practical solution for resolving disputes with traders, avoiding the need for lengthy court proceedings. It is known for its rapidity, low cost, and simplicity. Over recent years, the European Consumer Centres Network (ECC-Net) has seen a steady rise in complaints within the air passenger rights (APR) sector. The presence of an effective ADR entity is crucial for achieving high levels of mutually satisfactory resolutions. This report aims to outline the current state of ADR in the APR sector and to develop recommendations for improvement.

The ECC-Net’s involvement in air passenger rights

The European Consumer Centres Network (ECC-Net) has been in operation since 2005 with the objective of enhancing consumer trust in the single market. Co-funded by the European Commission (EC) and EU Member States, the network specializes in handling cross-border consumer complaints and providing feedback to national and EU stakeholders based on practical experience.

Since the implementation of the Montreal Convention and Regulation 261/2004, the ECC-Net has observed an increase in APR-related inquiries and challenges in resolving complaints. According to the network’s internal database, "IT-Tool," approximately 20% of its activities since 2010 have been related to APR issues. Significant events like the 2010 volcanic eruption in Iceland and subsequent airspace closure, and the 2012 insolvency wave, have influenced complaint volumes. However, not all APR complaints are linked to such exceptional circumstances.

The 2010 ash crisis provided a benchmark for comparing complaint handling by airlines across the EU, Iceland, and Norway. It revealed that only 31% of ECC-Net cases were resolved amicably, underscoring the need for improved ADR mechanisms. The crisis highlighted the benefits of ADR for all parties: consumers can resolve disputes without resorting to court; airlines can demonstrate responsiveness to customer concerns; and enforcement authorities can address consumer issues while balancing business interests.

Air passenger rights remain a hot spot

Despite the resolution of the ash cloud crisis, air passenger rights continue to be a significant area of cross-border consumer complaints. Many airlines' solutions fall short of fully adhering to legal provisions, including those established by the Montreal Convention, Regulation 261/2004, and the Court of Justice of the European Union (CJEU) rulings in the “Sturgeon” and “Nelson” cases. As noted in the 20th anniversary of the EU single market, passenger rights remain a challenge, with ongoing issues in enforcement and consumer information.

Consumers often seek redress beyond direct contact with airlines. While some court cases and the European Small Claims Procedure provide avenues for resolution, many consumers prefer a simpler, less formal process. ADR offers an effective alternative for resolving disputes without lengthy judicial procedures. However, enforcement authorities can only provide limited assistance, as not all handle individual complaints effectively.

CJEU Nelson case confirms sturgeon case law

On October 23, 2012, the CJEU ruled in the “Nelson” case, confirming its earlier decision in the “Sturgeon” case. The court ruled that passengers facing flight delays of three hours or more may be entitled to compensation similar to passengers whose flights are canceled, as stipulated in Article 7 of Regulation 261/2004. This decision reinforces the consumer’s right to compensation for significant flight delays and is welcomed by the ECC-Net as it strengthens consumers' confidence in claiming their rights.

With this enhanced legal backing, consumers are more likely to pursue claims. If initial claims are not satisfactorily addressed, ADR mechanisms offer a pathway to resolve disputes without legal conflicts. It is hoped that airlines will take consumer complaints seriously and work towards amicable resolutions, thereby fostering a more effective and consumer-friendly approach to air passenger rights.

Aim of the study

The ECC-Net, leveraging seven years of experience in managing cross-border consumer issues, aims to evaluate the current state of Alternative Dispute Resolution (ADR) mechanisms in the Air Passenger Rights (APR) sector. Given the considerable variation in ADR practices across different countries, and the fact that ADR systems have not yet fully realized their potential, this study is intended to:

1. Assess the ADR landscape
   Provide an overview of the existing ADR entities and mechanisms available within the APR sector across the European Union, Iceland, and Norway. This will include examining how these entities operate and their effectiveness in resolving disputes.
2. Compare practices
   Analyze and compare the practices and effectiveness of ADR entities in different jurisdictions. Identify best practices and areas where ADR systems fall short in addressing consumer grievances in the APR sector.
3. Provide recommendations
   Develop suggestions to enhance the ADR system, aiming to improve its efficiency and effectiveness. This includes recommending ways to better coordinate ADR efforts with key stakeholders such as National Enforcement Bodies (NEBs), the ECC-Net, European institutions, airlines, and businesses within the travel sector.
4. Enhance coordination
   Propose strategies for better collaboration among all stakeholders involved in ADR processes. This includes improving communication and cooperation between ADR entities and other relevant organizations to create a more cohesive and consumer-friendly dispute resolution environment.
5. Support consumer interests
   Ensure that the recommendations support the interests of consumers by making the ADR process more accessible, transparent, and effective in resolving APR-related complaints.

By focusing on these objectives, the study aims to contribute to a more robust and harmonized ADR framework in the APR sector, ultimately leading to better outcomes for consumers and improved compliance with passenger rights regulations.

ADR schemes in the European Union, Iceland, and Norway

The analysis reveals a diverse landscape of Alternative Dispute Resolution (ADR) mechanisms in the Air Passenger Rights (APR) sector across the European Union, Iceland, and Norway. The establishment and structure of ADR entities are influenced by each country's national context, including administrative organization, consumer representation schemes, and local habits. This study highlights the significant trends and outlines the current state of ADR entities handling APR cases.

Countries with no ADR for APR cases

Certain countries lack any ADR entities capable of handling APR disputes:

• Austria, Bulgaria, Ireland, Romania, Slovakia, the United Kingdom, and the Netherlands (since January 1, 2012, when the Consumer Complaint Board for Aviation ceased operations).
  
  In these countries, consumers must directly contact the airline or pursue court procedures to enforce their passenger rights, as no ADR options are available.

General ADR entities handling APR cases

Many EU countries and Iceland have ADR entities with general competence that include APR disputes. These countries include:

• Czech Republic, Cyprus, Denmark (Consumer Complaints Board), Estonia, Finland, Germany (Online-Schlichter), Greece, Hungary, Italy (RisolviOnline), Latvia, Lithuania, Malta, Poland, Portugal, and Spain.

Specific Notes:

• In Sweden, a general ADR entity includes a travel department that handles APR cases.
• In Germany (Online-Schlichter), Hungary, Spain, and Portugal, ADR competence is region-specific.
• In some countries, ADR competence depends on the value of the complaint:
  • Cyprus, Denmark (Consumer Complaints Board), and Portugal have value limits for complaints.
  • The CACCL in Lisbon handles complaints under €5000 and is limited to the Lisbon district.
  • The Danish Consumer Complaints Board hears complaints with a minimum value of DKK 80 (€105) and an upper limit of DKK 100,000 (€13,400).
  • In Cyprus, the limit is €3000, and in Germany (SöP), it is €30,000.

ADR entities specific to the travel sector or APR disputes

Only two countries have ADR entities specifically for APR:

• Norway: An ADR exclusively competent in APR.
• Italy: An ADR for APR claims exists but only handles disputes against Alitalia, established by the airline.

In France, a service of the CAA provides an informal ADR entity for passengers.

ADR entities specialized in the travel sector

Six countries have ADR entities for the travel sector that also handle APR claims:

• Belgium, Denmark (Danish Travel Industry Complaints Board), France, Germany (SöP), Iceland, and Luxembourg.

Specific Requirements:

• In Belgium, the ADR can only intervene in package holiday disputes, including transport services within the package, but not flight-only cases.
• In Denmark, the Danish Travel Industry Complaints Board handles package holidays and transport services departing from Denmark by Danish companies. Flight-only complaints fall under the general Consumer Complaints Board's competence.
• The CLLV (Commission Luxembourgeoise des Litiges Voyage) in Luxembourg handles both package holidays and flight-only complaints.
• The SöP (Conciliation Body for Public Transport) in Germany manages disputes across the entire transport sector, including rail, ship, bus, and flights.
• In Iceland and France (since January 2012), ADRs in the travel sector include APR but can only intervene if the air carrier is a member of the trade associations that set up the ADR. For example, MTV (Médiation Tourisme et Voyage) in France handles claims against Air France but not foreign airlines, as only Air France is a member.

Conclusion

The ADR landscape in the APR sector varies widely across the European Union, Iceland, and Norway. Some countries lack ADR mechanisms entirely, while others have general or sector-specific ADR entities with varying scopes and limitations. This disparity highlights the need for improved coordination and harmonization of ADR practices to ensure consistent and effective consumer protection in the APR sector across these regions.

Area of intervention in APR cases

The ECC-Net has observed that while many ADR entities are not specialized in APR, they generally handle cases based on Regulation 261/2004, the Montreal Convention, or the "Sturgeon" case law. However, certain ADRs have limitations regarding the legal sources they can apply. ADR entities may base their decisions strictly on legal texts or include principles of fairness and equity in their deliberations.

Examples:

• The French ADR can manage cases where airlines did not apply relevant APR legal texts. While making decisions, it considers both legal texts and equity to propose compromises that might not fully align with legal compensation or refund limits but are acceptable to both parties.

Countries with APR legal source restrictions

• Denmark
  • Both the general ADR and the Danish Travel Industry Complaints Board only intervene based on a breach of contract but can base decisions on the Montreal Convention.
  • Regulation 261/2004 is handled by the Danish Transport Authority, but delays and cancellations can constitute a breach of contract.
• Latvia
  • Legal provisions can only be enforced by national courts.
  • The Consumer Rights Protection Centre (CRPC) considers only Regulation 261/2004 and cannot issue binding decisions for traders.
  • CRPC assists consumers by informing them about passenger rights, possible actions, receiving the airline’s explanations, and documentary evidence.
  • CRPC informs traders and consumers about the possibility of filing a complaint, its legal basis, and the potential for success in court.
  • The CRPC does not consider the Montreal Convention or "Sturgeon" and "Nelson" case law.

General ADR practices in most countries

• ADR entities in countries like Cyprus, Estonia, Finland, France, Germany, Hungary, Iceland, Italy, Lithuania, Luxembourg, Norway, Portugal, Spain, and Sweden apply all relevant legal texts when handling consumer complaints.
• APR Source Not Applied by ADR
  • Denmark: Regulation 261/2004 (handled by the Danish Transport Authority)
  • Latvia: Montreal Convention, "Sturgeon" and "Nelson" case law

Conclusion

There is variability in how ADR entities across the European Union, Iceland, and Norway handle APR cases, with some having specific restrictions on the legal sources they can apply. This highlights the need for standardized practices to ensure consistent and effective consumer protection in APR cases.

Creation of ADR entities and financing of the system

The initiative behind the creation of an ADR entity and its funding is quite relevant in understanding why certain countries propose ADR entities with general competence while others offer specialized ADRs. It also allows for a better understanding of the decision-making process.

Usually, ADRs with general competence are created by public initiative (Ministry, public services, etc.), whereas specialized ADRs are normally and initially formed by private initiative (from traders and/or consumer associations) with occasional support from public authorities to maintain the service and guarantee its efficiency and independence.

Notification of an ADR

The European Commission has drawn up a list (http://ec.europa.eu/consumers/redress_cons/schemes_en.htm) of all the ADRs in every consumer sector that have been notified by the Member States as being in conformity with the Commission’s Recommendations 98/257/EC and 2001/310/EC. These ADRs therefore respect the following criteria:

• Independence
• Impartiality
• Transparency
• Adversarial principle
• Effectiveness
• Legality
• Liberty
• Principle of representation
• Fairness

Being part of the main ADR entities in their respective countries, the ADRs with general competence are usually notified to the European Commission as being in conformity with the aforementioned recommendations. There is one exception: Cyprus has not yet notified its ADR to the Commission as it was created only recently.

Regarding specialized ADRs for the travel sector or APR, Alitalia’s Conciliation Board and the Icelandic ADR are not notified. Nevertheless, ECCs Italy and Iceland work with them regularly as these ADRs respect the EU recommendations on ADR. According to ECC Iceland, the Icelandic ADR would only need to make minor changes to be notified. The ADR set up by Alitalia is, for the moment, considered an experimental ADR by ECC Italy and DG SANCO. In France, MTV is not yet notified as it has been operational for only a few months and cannot yet be examined for compliance with the European Commission Recommendations. Besides the above-mentioned exceptions, all the other ADRs originating from private initiatives are notified.

ADR and/or NEB?

Article 16 of Regulation 261/2004 obligates each Member State to designate a “body responsible for the enforcement of this regulation”. The European Commission has published a list of these National Enforcement Bodies (NEB), nominated by each Member State of the European Union, Iceland, Norway (and Switzerland), which have the power to enforce Regulation 261/2004. Generally, Member States designate the National Civil Aviation Authority (CAA) as NEB.

In accordance with the national administrative organization or the mission given to the NEB, some of these bodies are able to handle and enforce cases individually (for example, in Denmark). In other countries, the NEB is entitled to intervene only on behalf of a common interest and to enforce the Regulation according to this common objective only. The situation appears to be quite confusing for passengers when the NEB also offers a kind of ADR service for individual claims, such as the French NEB (DGAC), or when the ADR is also able to enforce the Regulation, such as CRPC in Latvia.

In France, the DGAC (Civil Aviation Authority) was designated as NEB. According to its mission as NEB, it has the power to enforce the Regulation and to sanction companies. Therefore, the DGAC can only intervene in the general interest of passengers and cannot enforce individual disputes. But the DGAC has also developed an ADR service that is able to handle individual claims, but strictly on an amicable basis and solely to help consumers receive a response from airlines concerning their claim. The DGAC, as ADR, does not propose dispute solutions or confirm the proper application of the Regulation. For consumers, the distinction between the different roles of the DGAC is not always clear: when contacting the DGAC, consumers often hope to get individual enforcement of their claim and do not understand the responses they receive, which are based on an amicable intervention.

Finland is quite an exception in the ADR landscape. It is the only country in which there is a general ADR competent for APR, which is also designated as a NEB. The tasks of the NEB in Finland are divided between three stakeholders:

• Consumer agency
  The Consumer Agency supervises compliance with consumer protection legislation and consumer rights in general. The Consumer Agency supervises, among other things, the marketing and contract terms of airlines operating in Finland. The Agency does not process individual disputes.
• Consumer disputes board
  The Board issues recommendations concerning individual disputes in Finland. However, the ADR does not have the authority to sanction airlines; that power resides solely with the Consumer Agency for the purposes of collective consumer protection.
• Finnish transport safety agency (Trafi)
  Trafi is responsible for supervising safety in air transport.

Traders' participation in the ADR procedure

One of the basic principles of ADR is that it is based on the goodwill of both parties—consumers and traders—to cooperate in finding an amicable solution to a dispute. Recourse to ADR is, in principle, not mandatory. However, in some ADR entities, traders have voluntarily agreed to the possibility of ADR and have committed to participating in any ADR procedure initiated by a consumer.

In six countries—Denmark (Consumers Complaints Board), Finland, Latvia, Lithuania, Norway, and Sweden—the ADR's competence to rule is not dependent on the trader's acceptance to submit to an ADR procedure. The participation of traders in ADR entities seems to be closely linked to the origin of the scheme and its financing (see 1.3).

For example, in Belgium, Iceland, and Luxembourg, ADR entities were initially set up by a private initiative of travel agencies, not national airlines. Therefore, only the travel agencies or tour operators have agreed to participate in these schemes, which are also partially financed by these traders. In the case of Alitalia’s Conciliation Board, as the ADR was set up directly by the airline, the company has evidently committed to it, and the competence of the ADR is exclusively limited to cases involving Alitalia (or an airline of the group).

The French MTV was also created by a private initiative of travel agencies and tour operator federations, as well as the association of French air carriers. Thus, nearly the whole travel sector participates in this ADR entity and process. The German SöP typically handles complaints against its members, but it has successfully conciliated a number of cases with other airlines as well. A current legislative proposal aims to make participation in the conciliation procedure mandatory for all German airlines.

In most countries, ADRs deal with national companies. In Denmark, for example, the ADR (Consumer Complaints Board) can even handle complaints against foreign airlines.

Existence of written rules and basic principles of the ADR procedure

• A charter to organize the procedure
  As most of the ADRs (general or specific) are notified to the European Commission, these ADRs naturally have written rules of procedure or a legal text that organizes their activities and their relationship with consumers. This is true for Alitalia’s Mediator as well.
• Costs and fees
  Regarding fees, the majority of ADR entities are free of charge for consumers and traders regardless of the organizational background of the ADR. However, some ADRs require a fee from consumers, others from traders, and in rare cases, both parties must bear costs.
  
  In the following countries, the procedure is free of charge for consumers who only need to bear their own costs (copies, postal or communication fees, etc.): Czech Republic, Estonia, Finland, France, Germany, Greece, Hungary, Italy (Alitalia), Latvia, Lithuania, Luxembourg, Norway, Portugal, Spain, and Sweden.
  • In Belgium (50 € for conciliation/min. 100 € for arbitration) and Denmark (21 €/37 €), consumers must pay a submission fee, which is recovered if the consumer wins the case or the case is dismissed.
  • In Italy (RisolviOnline), the consumer must pay a fee depending on the value of the claim (starting at 25 €). The fee is due only if the trader agrees to participate in the proceeding.
  • In Hungary, there is no submission fee, but the consumer might pay justifiable costs of the proceeding if the case is lost.
  • In Cyprus, the consumer must pay a submission fee between 5 and 17 €, and if the case is lost, 85 to 170 € in arbitrator fees, depending on the value of the complaint.
  • In Norway, only the trader pays a fee for the mediation procedure (see box 3).
  • In Iceland, where the ADR is initiated by a private initiative (consumer association and carrier federation), both parties must pay a fee to participate in the procedure.

Regarding Alitalia’s Conciliation Board, as it is initiated by the airline, the costs are solely covered by the airline.

• Type of procedure: online dispute resolution (ODR) or hearings
  Most ADRs provide a distance procedure, especially for claims from foreign consumers. Usually, this is concluded in writing, and the parties do not have to be present at a hearing. The ADR will ask each party to present its position regarding the claim to form its opinion and propose a solution. In some cases, the ADR will ask a third party to present an expert’s opinion if necessary for a better evaluation of the case.
  
  In a few countries, a hearing is organized to deal with the case in the presence of both parties. In these countries (Estonia, Hungary), the ADR has a general competence and was initiated by public authorities. If a foreign consumer cannot be physically present at the hearing, the ECC of these countries can generally help the consumer to be represented.
• Opportunity for an ADR to be provided with access to expertise
  Most ADR entities have the opportunity to seek expertise and/or expert opinions to propose an adequate solution (except in the Czech Republic, Finland, Germany (Online-Schlichter), Italy (Alitalia), Luxembourg, Poland, Spain, and Sweden). Usually, an external organization (meaning that it is not an internal service of the ADR or the trader) is commissioned with the expertise.
  
  This is the case for ADR in Cyprus, Denmark, Estonia, Latvia, Portugal, and Norway. Often the ADR can contact the National Civil Aviation Body or the NEB to receive the analysis of an expert (for example, in Denmark (Consumer Complaints Board) and Norway). The Latvian CRPC can seek an opinion or information from any competent body, even abroad. In France, the MTV will ask the carrier for expertise, which will not be communicated to the consumer due to a confidentiality agreement between the ADR and the traders. In Belgium, the Commission for Travel can ask tour operators and travel agencies to provide expertise. Concerning Alitalia’s Conciliation Board, the procedure can be suspended to turn to the NEB for expertise.
• Duration of case handling
  The Charters set by ADR entities foresee a certain duration for handling the cases submitted for mediation or arbitration.
• Report of activity
  Most ADR entities draft an annual report providing statistics and the outcome of the ADR's work. The decisions of the ADRs are rarely published, and if they are, the identity of the parties is generally anonymized, with decisions often published on the ADR’s website rather than in the annual report.

Language and translation

For the majority of ADRs, the written rules of procedure do not provide the option to submit a complaint or handle a case in any language other than the official national language(s). However, a few ADRs do accept English for cases involving foreign consumers, or they may accept several other languages depending on their resources.

• In Belgium, France, Germany (Online-Schlichter), Poland, and Spain, submissions to the ADR can be made exclusively in the national language.
• In the Czech Republic, Cyprus, Estonia, and Hungary, the ADR procedure is generally conducted in the national language, but some ADRs may accept English (or German for Hungary).
• In Italy (Alitalia), Latvia, Lithuania, Luxembourg, Portugal, and Sweden, ADRs accept both the national language(s) and English (if the trader accepts submissions in English).
• In Denmark, the Consumer Complaints Board may accept cases filed in English or a Scandinavian language, though responses will be provided only in Danish.
• For the SöP in Germany, the official language is German, but the ADR can also handle cases in English and requests in French.
• In Iceland, both Icelandic and any other language agreed upon with the ADR are accepted.
• In Norway, the board may accept cases filed in English or a Scandinavian language and might provide a short summary of the decision in English. Generally, the ECC Norway ensures that the consumer ECC can understand the ruling.

Regarding translations of ADR decisions or communications into other languages, only three ADRs offer this service:

• In Finland, the ADR operates in Finnish and Swedish, but for cases under Regulation 261/2004, consumers can submit complaints in English, and the rulings will also be provided in English.
• RisolviOnline, the general Italian ADR established by the Milanese Chamber of Commerce, handles cases and provides answers in almost all EU languages. Thus, translations of decisions are usually unnecessary.
• The Court of Arbitration in Portugal can translate its decisions into English.

In most cases, foreign consumers face a language barrier when introducing or following their complaint. ADRs typically address their decisions to the involved parties, and consumers receive rulings in the ADR's language. The intervention of ECCs as facilitators is therefore very helpful and streamlines the process.

Participation of ECCs in the ADR process

The ECC-Net was established in 2005 through the merger of two existing networks: the Euroguichets, which served as consumer information centers since 1992, and the EEJ-Net, which focused on out-of-court settlements of consumer disputes and promoting ADR since 2001. Thus, ADR is an integral part of the ECC-Net's activities.

The ECC-Net is co-financed through grants from the Member States and the European Union. EU grants are provided based on a grant agreement signed by the European Commission and the host structures of the ECCs, which is approved by the Member State’s authority. These grant agreements include a Vademecum outlining the global objectives of the ECC-Net. Objectives 4 and 5 of the Vademecum mandate that ECCs assist consumers with disputes by determining appropriate ADR mechanisms, providing necessary information and assistance, facilitating access to ADR, and monitoring the ADR process. ECCs are also expected to promote and develop ADR in the Member States.

In practice, ECCs collaborate with ADR entities to resolve disputes. When an ADR has general competence and handles various types of consumer disputes, ECCs frequently transfer cases to such ADRs. Some ECCs are more directly involved in the ADR procedure. For instance:

• ECC Sweden can participate as an expert on the ADR board, though this is only in cases where ECC Sweden was not the referring party.
• The representative from ECC Estonia can attend hearings of cases referred by ECC and assist in completing the file to initiate the procedure.
• In Hungary, both the ECC and the consumer are represented by the case handler at hearings.

Overall, ECCs play a supportive and facilitative role in the ADR process, ensuring that consumers have access to appropriate dispute resolution mechanisms and that the ADR procedures are effective.

Binding aspect of ADR decisions

The binding nature of decisions made by ADR entities varies across different jurisdictions:

1. Cyprus and Portugal
   ADR decisions are binding on both parties. They can be enforced as court decisions.
2. Spain
   Arbitration board decisions have the same legal force as court judgments.
3. Denmark
   General ADR decisions are binding after 30 days if the trader does not respond. Non-compliance can be enforced by a bailiff and may result in public shaming. For the Danish Travel Industry Complaints Board, the decision can be used in court, but the judge is not bound by it.
4. Italy and Iceland
   ADR proposals are formalized in a protocol signed by both parties, constituting a contract. These can be enforced in court if the agreement is not adhered to.
5. Norway
   ADR decisions have significant impact and can be considered as a source of law by judges.
6. Belgium
   Arbitration decisions are binding on the trader, and no legal procedure is possible afterward.
7. Estonia
   ADR decisions are not binding. Parties can take the case to court if they disagree. Non-compliance can result in public blacklisting on the Consumer Protection Board's website.
8. Hungary
   ADR decisions are binding only if the trader has notified the ADR entity of their acceptance. If not accepted, the decision is a recommendation. Non-compliance with binding decisions can lead to enforcement actions in court, while recommendations may lead to publication of the case outcome.
9. Finland
   ADR decisions are recommendations and not binding. Significant decisions are published, and non-compliant traders may be listed on a black list by a consumer organization.
10. Sweden
    ADR decisions are influential. The consumer magazine "Råd & Rön" publishes names of traders who do not comply, providing a strong incentive for compliance.
11. Latvia
    Binding ADR decisions can be enforced if parties do not agree on a settlement, with compulsory execution and publication possible.
12. France
    ADR decisions by MTV are confidential and cannot be used in court unless both parties agree.

In some jurisdictions, ADR decisions can be used in court procedures, while in others, they remain non-binding or are simply recommendations.

Recommendations for ADR in the air passenger rights (APR) sector

Given the complexities and the rise in air travel complaints across Europe, it is crucial to improve the Alternative Dispute Resolution (ADR) mechanisms in the APR sector. Here are some recommendations and best practices to enhance the ADR system:

1. Ensure full geographical coverage

• Objective
  Every EU Member State, along with Iceland and Norway, should have an ADR entity for the APR sector.
• Rationale
  Comprehensive geographical coverage ensures that all consumers have access to ADR services, which is especially important for cross-border air travel issues. This also aligns with the European Commission's proposal for a European ODR platform, which will refer consumers to the appropriate ADR entities.

2. Distinguish roles and cooperate

• Objective
  Clearly differentiate between ADRs and National Enforcement Bodies (NEBs) to improve the understanding and accessibility of the system.
• Rationale
  NEBs focus on enforcement of regulations, while ADRs are designed to resolve disputes amicably. Clear distinctions will simplify the complaint process for consumers. Cooperation between ADRs and NEBs will enhance monitoring and ensure effective resolution of disputes.
• Example
  Similar sector-specific agencies exist in energy sectors, governed by Directives 2009/72/CE and 2009/73/CE, which could serve as a model.

3. Promote close collaboration

• Objective
  Foster close cooperation among ADRs, ECCs (European Consumer Centres), and NEBs.
• Rationale
  This collaboration will ensure a seamless process for consumers, facilitate information sharing, and provide access to necessary technical expertise. For instance, ECCs can help consumers in cross-border cases and ensure that ADRs have the technical details needed for case assessment.
• Best practice
  Regular meetings and communication channels should be established among these bodies to discuss cases, share insights, and update on regulatory changes.

4. Improve knowledge and expertise in ADR entities

• Objective
  ADR entities should have specialized knowledge in APR issues and EU regulations, such as the Montreal Convention.
• Rationale
  Understanding the specificities of air passenger rights and the legal framework is crucial for effective dispute resolution. For instance, the Swedish Konsument Ombudsman (KO) has demonstrated expertise in APR by representing consumers in court cases related to air passenger rights.

5. Ensure ADR is accessible and free of charge

• Objective: ADR should be a swift, accessible, and cost-free option for consumers.
• Rationale: To maintain ADR as a viable alternative to court procedures, it should be easily accessible and not impose financial burdens on consumers. This includes providing online platforms for filing complaints and updates on case status.

6. Enhance transparency and communication

• Objective
  Ensure that consumers are well-informed about the ADR process and their options.
• Rationale
  Clear communication helps consumers understand how to file complaints, what to expect during the process, and how decisions are made. This transparency builds trust and encourages more consumers to utilize ADR services.

7. Utilize technology for efficiency

• Objective
  Leverage technology to streamline ADR procedures and enhance accessibility.
• Rationale
  Digital tools can facilitate the submission of complaints, case tracking, and communication between consumers, ADRs, and traders. The upcoming European ODR platform should be integrated with national ADR systems for a unified approach.

8. Monitor and evaluate ADR effectiveness

• Objective
  Regularly assess the performance and effectiveness of ADR entities.
• Rationale
  Continuous evaluation helps identify strengths and areas for improvement, ensuring that ADR mechanisms remain effective and responsive to consumer needs.

Conclusion

By implementing these recommendations and adopting best practices, the ADR system in the APR sector can be significantly improved. This will enhance consumer trust, ensure fair treatment, and support the smooth functioning of the internal market for air transport across Europe.