What is ADR?
Alternative systems of out-of-court consumer dispute resolution, so-called ADR (Alternative Dispute Resolution) operating in Europe help consumers and entrepreneurs who could not independently reach an agreement in the dispute.
The experience of certain E.U member countries indicates that alternative systems of out-of-court resolution of consumer disputes may – under the condition of providing necessary, basic rules – bring advantageous results for consumers and entrepreneurs. The advantages of such a proceeding are first of all low costs and short time of dispute resolution.
In order to help a consumer and entrepreneur in the resolution of disputable case, ADR systems use an idea of application of third party, i.e. arbitrator, mediator or ombudsman.
The out-of-court procedures mostly constitute the alternative in relation to court proceedings in many countries. They may also be a proceeding supplementary or preceding the court proceeding.
Due to material jurisdiction, we may distinguish the systems which settle the disputes only in certain branches, e.g. telecommunication, insurance and such ones which cover all the consumer cases.
Out-of-court systems of disputes settlement most often are formed pursuant to the agreements between organisations of entrepreneurs and consumers. In some countries of the European Union the disputes in out-of-court mode are settled by state institutions (e.g. in Scandinavian countries).
Among certain systems there also occur significant differences as for the binding power of their decisions. In some cases they have a form of recommendations (e.g. model of mediator, ombudsman), in other binding power for entrepreneur (e.g. arbitration, complaint commission) and still in other cases, they bind both parties (e.g. arbitration).