Alternative Dispute Resolution

Introduction

The aim of Alternative Dispute Resolution (ADR) is to attempt to resolve a conflict between consumers and professionals amicably, without resorting to traditional judicial proceedings. This is made possible with the help of an approved and impartial dispute resolution body. Such an approach is often easier, faster, and less costly than taking legal action.

ADR in the EU

ADR is governed by Directive 2013/11/EU, which is currently under review, and has been transposed into Book 4 of the Code of Consumption.

Thus, in each Member State, there are designated ADR bodies, either specialized in a specific sector (e.g. insurance) or with a more general focus. It is important to note that disputes concerning healthcare or higher education are not covered by this directive.

ADR in Luxembourg

The Directorate for Consumer Protection (DPC) is the competent authority responsible for notifying the European Commission of consumer dispute resolution bodies that comply with the requirements of the Consumer Code.

It maintains the list of so-called qualified entities that offer an alternative dispute resolution procedure for consumer disputes in Luxembourg, in accordance with the Consumer Code.

Currently, there are a total of five qualified ADR entities, four of which are specialized in a specific sector:

• The Luxembourg Commission for Travel Disputes (CLLV) is responsible for resolving disputes related to package travel contracts as well as other travel service contracts;
• The Commission de Surveillance du Secteur Financier (CSSF) handles ADR requests not only from consumers against supervised professionals, but also disputes that arise between professionals within the financial sector;
• The Luxembourg Institute of Regulation (ILR) works to ensure and monitor, in the interest of consumers, the proper functioning of markets based on effective and sustainable competition, while guaranteeing basic universal service, aiming to resolve disputes in this area;
• The Insurance Ombudsman is tasked with handling ADR requests arising from conflicts between insurers established in Luxembourg and consumers, whether the consumers reside in Luxembourg or in another EU country;
• The Mediator of consumption, the fifth entity, can be contacted as a so-called residual structure for any dispute resulting from a sales or service contract, except those falling under the jurisdiction of the four specialized entities.

ADR entities do not handle disputes arising from:

• Non-economic services of general interest provided by the State or other public authorities,
• Disputes between professionals,
• Healthcare services,
• Public providers of post-secondary or higher education.

Cross-border disputes

In the event of a dispute between a consumer and a professional who do not reside in the same EU country, the Luxembourg ECC (European Consumer Centre) is tasked with assisting consumers by directing them to an entity located in another EU Member State that is competent to handle their dispute.