Alternative Dispute Resolution

Law No. 144/2015, of September 8, transposed into national law Directive 2013/11/EU of the European Parliament and of the Council, of May 21, 2013, on alternative dispute resolution for consumer disputes.

This law establishes the legal framework for Alternative Dispute Resolution (ADR) mechanisms, creating the Consumer Arbitration Network in Portugal.

What are consumer disputes?

These are disputes initiated by a consumer against a supplier of goods or a service provider, related to contractual obligations arising from sales or service contracts concluded between established suppliers of goods or service providers and consumers residing in Portugal and the European Union (Article 2, No. 1 of Law No. 144/2015, of September 8).

What is ADR?

ADR consists of mechanisms available to consumers and businesses to resolve consumer disputes outside of court, in a faster and less expensive manner. ADR includes mediation, conciliation, and arbitration. The ADR process begins with an attempt to reach an agreement through mediation or conciliation. However, if an agreement is not reached, the parties may resort to the Arbitration Court, through a simple and quick process.

What are ADR entities?

These are independent entities, with specialized personnel, that impartially help consumers and businesses reach an amicable solution. These entities are authorized to conduct mediation, conciliation, and arbitration of consumer disputes. They must be registered on the list provided in Article 17 of Law No. 144/2015, of September 8.

Who is responsible for managing the list of ADR entities?

The Directorate-General for Consumer Affairs is the national authority responsible for organizing the registration and dissemination of the list of ADR entities.

How many ADR entities exist in Portugal?

In Portugal, there are ten Consumer Conflict Arbitration Centers. Seven have general competence with a regional scope, located in Lisbon, Porto, Coimbra, Guimarães, Braga/Viana do Castelo, Algarve, and Madeira. There is also a national arbitration center (subsidiary), the CNIACC - National Center for Consumer Conflict Information and Arbitration. Additionally, there are two specialized centers focused on the automotive and insurance sectors.

How does a company know which ADR entity to refer to its consumers?

The location where the sales contract for a product or service is concluded, which usually coincides with the establishment’s location, determines the competent arbitration center.

For example:

A company that has one or more commercial establishments in a specific municipality should only indicate the ADR entity competent for resolving disputes in that municipality.

A company operating throughout the national territory should indicate all competent ADR entities.

A vehicle repair shop, an insurance company, or a travel agency should refer to the ADR entities specialized in those sectors.

Who is required to inform consumers about ADR entities?

All suppliers of goods and service providers, including those who sell products or provide services exclusively online, are required to inform consumers about the available ADR entities or those they have voluntarily joined or are legally bound to. Only providers of General Interest Services without economic compensation, such as social services provided by the state or on its behalf, healthcare services, and public higher education institutions, are exempt.

The obligations under Law No. 144/2015, of September 8, apply, with the necessary adaptations, to all economic sectors not excluded by the law, including those with specific legislation imposing a similar obligation.

Is adherence to an ADR entity mandatory?

The law does not impose mandatory adherence to any ADR entity but only establishes an obligation to provide information about existing entities. However, arbitration is mandatory for essential public services such as electricity, gas, water and waste management, electronic communications, and postal services.

How should companies provide this information?

This information must be presented clearly, comprehensibly, and appropriately for the type of goods or services being sold or provided (Article 18, No. 2 of Law No. 144/2015, of September 8). Accordingly:

On the supplier’s or service provider’s website, if one exists.

In sales or service contracts between the supplier and the consumer, if these contracts are in written form or constitute standard-form contracts.

If no written form exists, the information must be provided on another durable medium, such as a sign displayed on the wall, affixed to the sales counter, or included in the invoice given to the consumer.

Does the law provide a standardized information model for consumers?

No.

Who is responsible for enforcing compliance with the obligation to inform consumers?

The Food and Economic Security Authority and sectoral regulators in their respective domains are responsible for enforcing compliance with these obligations, instructing administrative offense procedures, and deciding on these cases, including the imposition of fines and additional sanctions if necessary.

What is the consequence of failing to comply with the duty to inform consumers?

Failure to comply with the obligation to inform consumers constitutes an administrative offense, punishable by:

A fine between €500 and €5,000 for individuals.

A fine between €5,000 and €25,000 for legal entities.

When does this new regulation apply?

Law No. 144/2015, of September 8, came into force on September 23, 2015. Suppliers of goods and service providers had six months from that date to adapt to this new regulation. Thus, since March 23, 2016, companies must make this information available to their consumers.

ATTENTION: Informing consumers about available ADR entities does not exempt suppliers of goods and service providers from providing consumers with the Complaints Book, which is mandatory under Decree-Law No. 156/2005, of September 15.

List of Entities