In a recent decision, the European Court of Justice ruled (Judgement of 25 June 2020 - C-380/19) that the information obligation of Article 13 of Directive 2013/11/EU require companies to include information on alternative dispute resolution in consumer matters in the implemented terms and conditions. This even applies if the company does not offer the possibility to conclude a contract with consumers via the website.
Directive 2013/11/EU is an EU law on alternative dispute resolution (ADR) between consumers and businesses to promote growth and confidence in the internal market and achieve high level of consumer protection without restricting consumer access to justice. The aim of the Directive is to create or develop an independent, transparent, effective, fast and fair out-of-court mechanism for settling disputes arising from domestic and cross-border purchase or service contracts where they do not exist or are insufficient in the Union Member States. The Directive also aims to establish quality requirements for the alternative dispute resolution to ensure the same level of protection and rights for consumers.
The decision is relevant for all companies that use general terms and conditions for purchase or service contracts on their websites. They are obliged to inform the consumer of the extent to which the trader is willing or obliged to participate in a dispute resolution procedure before a consumer conciliation body.
Alternative dispute resolution provides the consumer with a simple, quick and inexpensive way of settling disputes out of court within the traders and it is standardized in the Directive 2011/83/EU. The Directive, as an European law, is not directly applicable in the Union Member States. This Directive has been transformed into national law – in Germany for example by the Law on alternative modes of resolution of consumer disputes (“Gesetz über die alternative Streitbeilegung in Verbrauchersachen”). Therefore the legislative basis for Germany is the national transformation. Nevertheless the rulings on the interpretation of the Directive 2011/83/EU is effective for such national law, even in other Member States.
The court ruled the following:
Directive 2013/11/EU states the objective of a high level of consumer protection. A high level of consumer protection requires that all necessary information be available to the consumer before the conclusion of the contract. Besides to the conditions of the contract, the relevant information includes both the consequences of the conclusion of the contract and the information necessary for the proper performance of the contract and, above all, for the exercise of the consumer’s rights. Furthermore the information which is subject of the decision under consideration.
Information on the possibility of alternative dispute resolution must be easily and quickly accessible for the consumer, and this before the conclusion of a binding contract or offer. Transparency about the possibility of alternative dispute resolution can and must be created by including the relevant information in the general terms and conditions. Thus, the objective of increasing consumer awareness of alternative dispute resolution can be achieved.
It should be noted that Article 13(2) of Directive 2013/11 refers to the general terms and conditions of sales and service contracts between a company and a consumer. However, this article does not limit the information obligation provided therein to cases where the company concludes contracts with consumers via his website.
It follows that even companies that do not offer the conclusion of contracts on their website are explicitly not exempt from this obligation and need to include information on alternative dispute resolution in consumer matters in the implemented terms and conditions.