Czech Business Today

Arbitration and mediation are mechanisms of alternative dispute resolutions (ADR). ADR basically is an alternative to formal court dispute settlements. Such an instrument has many advantages – it is faster, cheaper and parties do not leave the process as enemies but as two entities that found a solution in a peaceful way. These mechanisms function differently across the EU (depending on the nature and on the sector), therefore it complicates their use in cross-border disputes. 

In order to facilitate the ADR in cross-border disputes, the European Commission adopted a proposal for ADR Directive and a proposal for a Regulation on Online Dispute Resolution (ODR) on November 29, 2011. In Prague on February 14, different stakeholders discussed the use and function of ADR mechanism in the Czech Republic and how it could function in the future in connection with ODR. ADR, and later ODR, could be a good solution for both parties of the dispute – consumers and businesses, only if they are wellbalanced, clearly defined, of a high quality and known to their users. Weak knowledge, tradition and certain culture of ADR can influence the use of this mechanism in the Czech Republic. “The ADR and ODR proposals can save money and time to both parties, only if they are credible accessible and of a good quality”, said Zuzana Roithová, Member of the EP IMCO Committee. 

Between 2008 and 2010, the Czech Ministry of Industry and Trade realized an ADR pilot project. “We have dealt with more than 2000 disputes, one third of which was settled at the contact point by providing information and recommendations”, said Ivana Kocová from the Ministry. When using the mediation, 80% of disputes reached an agreement. The use of arbitration was low. Consumers do not have the capacity to make a difference between the decision of the Court and an arbitration award. In its proposal, the Commission pushes the Members States to set up ADR mechanisms. 

In the EU there are more than 700 different ADR mechanisms. The proposal foresees that ADR mechanisms should fully function from 2014 and ODR from 2015. ODR should help to solve crossborder disputes on the on-line platform. Via its contact points it should be possible to submit a complaint with a help of an e-form available in all EU languages. The platform will propose the ADR entities that will be the most suitable for the dispute resolution. The dispute will be solved according to the rules of the relevant ADR body. “Procedures will remain in the competence of the Member States as the directive does not deal with procedural aspect, neither with nature of the decision”, said Věra Knoblochová from the Czech Permanent Representation to the EU. 

In principle, consumers welcome ADR. “As complaints do not function properly in the Czech Republic, ADR could be a good alternative”, said Libor Dupal of the Czech Association of consumer protection. Tomáš Večl of the European Consumer Centre Czech Republic thinks that both ADR and ODR proposals can be beneficiary. However, the mechanisms are often unclear for both consumers and mediators. “In the Czech Republic, we already have an example when some ADR disputes are dealt with on-line”, said Marie Moravcová of the Arbitrary Court at the Czech Chamber of Commerce and Czech Agrarian Chamber. The Arbitrary Court deals with European cross-border disputes regarding the .eu domains. Since 2006, it solved more than 2 000 cases. According to Ivan Voleš from the Czech Chamber of Commerce and EESC Member, ADR is a tool, which is equal for both parties. „However, it must be ensured that it will be interesting for businesses“, he concluded.