Under the rules, EU countries will have to assemble dispute resolution bodies to deal with contractual disputes between consumers and traders, such as the sale of faulty products. The entities will have 90 days to settle disputes.
Many EU countries already have Alternative Dispute Resolution schemes, but a lack of common standards, patchy coverage and overloading make it hard for shoppers to use them. The new directive requires EU member states to ensure that ADR bodies exist for all business sectors and includes provisions to ensure that mediators are impartial.
The agreement also covers disputes for products bought online and the creation of an information platform in all EU languages.
MEPs also ensured that arbitration should be either free of charge for the shopper or cost only a "nominal fee". In general, any dispute should be resolved within 90 days, the rules add.
Tonio Borg, the EU’s health and consumer policy commissioner, said the move was “win-win for consumers, who will be able to resolve their disputes out-of-court in a simple, fast and low-cost manner, and also for traders who will be able to keep good relations with customers and avoid litigation costs.”
EU lawmakers approved the rules, proposed by the European Commission in 2011, in a vote on Tuesday (12 March).
The out-of-court system applies to any purchase made domestically or across EU borders. It will also require traders to provide consumers with adequate information on the possibility of recourse to out-of-court dispute resolution.
Róża Thun, a Polish MEP and rapporteur for e-commerce dispute resolution, said the rules would help shore up consumer and trader confidence when carrying out cross-border transactions online.
"These new instruments will give them confidence in buying and selling throughout the EU and allow them to fully benefit from all the opportunities that the Single Market offers", she said.
The two new rules will enter into force in April and the EU executive will give governments two years to apply the directive in national legislation.
In 2010, one in five consumers in the EU encountered problems when buying goods or services, leading to financial losses estimated at 0.4% of the EU's GDP, the Commission says.