Brexit: UK Government sets out changes to consumer's online dispute resolution rights

On 28 October 2018 the Department for Business, Energy & Industrial Strategy ("BEIS") published a draft of the Consumer Protection (Amendment etc.) (EU Exit) Regulations 20181. The draft Regulations seek to ensure that EU-derived consumer protection legislation remains appropriate and effective following the UK's departure from the European Union. The changes will affect how consumer disputes are approached and managed by traders and consumers within the UK & the EU.

The draft Regulations change access to Alternative Dispute Resolution ("ADR") procedures; UK based ADR entities are no longer required to offer cross-border ADR services to consumers resident in other EU Member States. Additionally, the UK currently sends the European Commission a consolidated list of entities offering ADR procedures to consumers and has to make the list of ADR entities published by the European Commission publicly available. These requirements are also removed and replaced by a requirement that the Secretary of State publish a list of ADR entities available in the UK. 

One form of ADR is the EU's Online Dispute Resolution ("ODR") platform which enables consumers within the EU to make a complaint against an online trader based in the EU. It is intended to be an easy, low cost method of settling consumer disputes. To encourage use of the platform, online traders are required to provide a link to the platform on their website, they are not however, required to engage with a consumer who submits a complaint using the ODR platform.

The draft Regulations revoke the EU Regulation on ODR meaning that online traders selling in the UK will no longer be obliged to provide consumers with information about the EU's ODR platform on their website.

The draft Regulations mean that the rights of British consumers purchasing products from the EU will be reduced, as will the rights of EU consumers purchasing from the UK. It remains to be seen whether consumer confidence in either direction will be significantly affected by the changes and whether traders in the UK or the EU will see any difference in the number and/or manner of complaints they receive. Given that a recent BEIS research paper2 demonstrated that ADR has the ability to drive customer satisfaction, these changes will provide an interesting challenge for UK online traders trying to appeal to consumers in the EU post-Brexit and vice versa for EU online traders. 

To read more articles related to this topic or to view other know-how material relevant to dispute resolution please visit our dedicated know-how portal Disputes+.

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