Monday, 14 December 2015

German Parliament passes Act on consumer ADR

The German Parliament has passed its respective Act – Verbraucherstreitbeilegungsgesetz (VSBG) – implementing the requirements of the ADR-Directive with a slight implementation delay on 3 December 2015. Please access the relevant documents here.

In the next step the Act still needs to be approved by the Federal Council (Bundesrat). It is expected to enter into force by April.

Importantly, Germany is stricter than the Directive when it comes to forbidding ADR bodies that are close to traders or trade associations (§ 1(2) VSBG). It is in line with the Directive when it comes to such requirements as low/now costs for consumers (§ 23 VSGB stipulates the few instances in which consumers may be charged a fee). Consumers do not have to contract a lawyer to represent them before an ADR body. Where no special board exists, there will be a general board to collect the remaining cases (§ 29 VSBG). With the view to financing emphasis is put on the trader side. It is acknowledged that the outcome of an ADR procedure may differ from that of a court judgment ( § 16(1) III. VSBG). 

German small claims procedures in the civil courts are generally said to be working rather well compared with other European countries. The two systems can, therefore, be regarded as competitors. It remains to be seen how successful consumer ADR enforcement will be in Germany. As of now there is only a scattered ADR landscape. With the implementation it will be overarching: For every consumer problem access to an ADR is now guaranteed.

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