Alternative Dispute Resolution (ADR)

ALTERNATIVE CONSUMER DISPUTE RESOLUTION (RAL)

A Law No. 144/2015 of September 8 , transposed Directive 2013/EU, of the European Parliament and of the Council, of May 21, 2013, on the alternative resolution of consumer disputes.

The aforementioned 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 or service provision contracts, concluded between an established supplier of goods or service provider and consumers resident in Portugal and in the European Union (article 2 no. 1 of Law no. 144/2015.

2. What is RAL ?

ADR are mechanisms available to consumers and companies to try to resolve consumer disputes outside of court, in a faster and less expensive way. RAL covers the mediation , the conciliation and the arbitration . The ADR process begins with an attempt to reach an agreement through mediation or conciliation. However, if this agreement is not reached, the parties involved can still appeal to the Arbitration Court, through a simple and quick process.

3. What are RAL entities ?

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

4. Who is responsible for managing the list of RAL entities ?

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

5. How many RAL entities are there in Portugal ?

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

6. How does a company know which RAL entity it should recommend to its consumers ?

O The place where the contract for the purchase and sale of goods or the provision of services is concluded , which generally coincides with the location of the establishment, determines the competent arbitration center.

For example:

• A company that has only one or more commercial establishments in a given municipality must only indicate the RAL entity that has the authority to resolve conflicts in that municipality.
• A company that carries out its activity throughout the national territory must indicate all competent entities.
• A vehicle repair workshop, an insurance company or a travel agency must indicate the specialized entities for these sectors.

7. Who is obliged to inform consumers about RAL entities ?

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

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

8. Is there any requirement to join an RAL entity ?

This law does not require membership of any RAL entity, establishing only a duty to provide information on existing entities. However, there is a case for necessary arbitration for essential public services, such as electricity, gas, water and waste, electronic communications and postal services.

9. How should companies provide this information ?

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

• At the website of suppliers of goods or service providers, if any.
• Us contracts of purchase and sale or provision of services between the supplier of goods or service provider and the consumer, when these take written form or constitute adhesion contracts.
• If there is no written form, the information must be provided on another durable medium, namely a posted sign on the wall or put it on the sales counter or in the invoice delivered to the consumer.

10. Does the law provide for any standardized model of information to be provided to consumers ?

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

11. Who is responsible for monitoring compliance with the obligation to provide information to consumers ?

Up to Food and Economic Security Authority and to sectoral regulators in the respective areas, monitoring compliance with these duties, investigating the respective administrative offense cases and deciding on these cases, including the application of fines and additional sanctions if necessary.

12. What is the consequence of not complying with the duty to provide information to consumers ?

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

• Fine between €500 and €5000 , when committed by a natural person.
• Fine between €5000 and €25,000 , when committed by a legal person.

13. When does this new regime apply?

Law No. 144/2015 of September 8, came into force on September 23, 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.

ATTENTION: Consumer information about available RAL 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 September 15th.