Online shopping has transformed how we buy goods and services, but it has also exposed a recurring challenge: resolving disputes when things go wrong. Damaged products, delayed deliveries, or disputes over contract terms, can leave consumers frustrated. Traditional litigation is often slow, costly, and intimidating, particularly for low-value claims. Alternative Dispute Resolution (ADR) provides a faster, cheaper, and more accessible way for consumers and traders to settle disputes outside the courts.
For the past decade, the EU has relied on ADR Directive, complemented by the European Online Dispute Resolution (ODR) platform established under ODR Regulation.
Over time, it has become evident that the existing ADR framework is unable to adequately address emerging types of disputes, such as those involving digital content, personal data in exchange for services, and pre-contractual obligations. According to the 2023 Consumer Conditions Scoreboard, one in four EU consumers faces a problem worthy of complaint, yet only a small proportion make use of ADR. Although the ODR platform, operational since 2016, attracted significant web traffic, it processed only around 200 cases per year across the EU, rendering its continuation both economically and practically unjustifiable. These shortcomings underscore the need to modernise the ADR provisions and replace the underutilised ODR platform with a more responsive mechanism that better reflects the realities of today’s digital market.
In response, the European Commission proposed a legislative package in October 2023, including a revision of the ADR Directive and the repeal of the ODR Regulation. Supporting this initiative, on July 17, 2025, the Council and the European Parliament reached an agreement on the final compromise text of the Proposal for a Directive amending the ADR Directive, currently pending formal adoption.
Forthcoming Changes in the ADR and ODR Regime
Expanded Scope: The proposed amendments extend the ADR Directive to pre- and post-contractual disputes, including misleading advertising, missing mandatory information, and digital content paid for with personal data. Non-EU traders may participate voluntarily, providing broader protection for EU consumers in cross-border cases.
Minimum harmonisation: Member States will be required to meet the baseline standards while retaining discretion to provide stronger consumer protection and extend ADR to additional disputes under EU or national law. Once adopted, consumer ADR will be governed under a single instrument, as the ODR Regulation has been repealed.
Clear deadlines: Traders must respond to ADR bodies within 20 working days (or 30 for complex disputes). Non-response counts as refusal to participate.
Automation: Digital tools and automated systems may be used, provided that:
- Consumers are informed before the process begins;
- Consumers retain the right to human review;
- Personal data processed by automated systems complies with GDPR.
Incentives for participation: Member States are encouraged to introduce financial and non-financial incentives, such as reduced fees, awareness campaigns, or certification for compliant businesses. Sectors with low ADR participation or high complaint volumes, such as air transport and tourism, will receive special attention.
ADR contact points: Newly established ADR contact points will replace former ODR contact points, guiding consumers and traders to the competent ADR entity and explaining procedural rules. Contact points will be assigned based on the consumer’s residence, and Member States may extend their mandate to domestic disputes.
Additional measures:
- Consumers may be assisted by third parties (for example, consumer organisations or claims management companies), with transparency obligations maintained;
- ADR entities may bundle similar disputes to improve efficiency, with consumer consent;
- ADR entities will be required to publish biennial activity reports (Member States may set shorter reporting periods);
- Natural persons handling disputes will need to possess relevant expertise, including private international law.
The text is expected to be adopted by the European Parliament between 15-18 December 2025, followed by the Council. This indicates that the Proposal still remains subject to change and its final content may differ, so the current version should be considered provisional.
Another key legislative step by the Parliament and the Council was Regulation (EU) 2024/3228 of 19 December 2024, repealing the ODR Regulation with regard to the discontinuation of the European ODR Platform. The document entered into force on January 19, 2025, and the ODR platform was discontinued on July 20, 2025. The European Commission was tasked with developing a new digital tool facilitating cross-border ADR with machine translation, which has yet to be developed.
Potential Implementation Challenges
While these reforms promise a more accessible and efficient system, implementing them in practice may present several challenges. Relying on automation can improve efficiency in ADR processes, but it may raise fairness and data protection risks. While GDPR compliance, transparent decision-making, and mandatory human review are essential to maintain consumer trust, implementing these safeguards in practice can be complex and resource-intensive. At the same time, Member State discretion allows for tailored approaches, yet risks creating inconsistent consumer experiences across the EU. Adequate resource allocation is also a concern since training staff and maintaining digital tools require investment, which may be challenging for smaller or less-resourced Member States. Finally, expanding ADR to non-EU traders broadens consumer protection but introduces cross-border enforcement challenges that necessitate clear guidance and oversight to ensure compliance.
Looking Ahead
The proposed amendments to the ADR Directive aim to make dispute resolution faster, more accessible, and better suited to the digital age. Monitoring Member State implementation will be essential to evaluate effectiveness. Applied consistently, these changes could create a reliable, inclusive, and digitally integrated system for resolving consumer disputes outside the courts.
By Sitora Saidova
PhD Candidate, School of Law
University of Essex
