Essentials – clear and brief

ADR/Ombudsman & Regulatory Redress

Alternative Dispute Resolution (ADR) is an umbrella term for a wide variety of out-of-court mechanisms used to resolve disputes and provide redress. ADR is growing in popularity, as it encompasses valuable and cost-effective alternatives to court proceedings. ADR generally involves one of the following three mechanisms:

ADR via private, co-contracting processes

ADR via private, co-contracting processes, including arbitration, adjudication, mediation and conciliation, are designed principally to resolve disputes between parties in a contractual relationship, but can have wider application. Nonetheless, this category of ADR is not binding on third parties.

ADR via independent Ombudsman Entities

ADR via independent Ombudsman entities (or similar publicly validated intermediaries like “médiateurs”) covers a wide variety of resolution techniques developed to deal with consumer claims, typically involving complaints about a product or service in a particular market sector. This type of ADR has the advantage of being multi-functional: it can be used for resolving unitary or mass claims, which may be contractual or non-contractual, and which may deal with private or public law disputes. Its real added-value lies in combining these complaint handling powers with market surveillance and claims management functions.

These include accumulated market knowledge and intelligence, early detection, monitoring, feedback loops to business, advice to business and consumers, regular market and claims management reviews and reports. This ADR mechanism is frequently deployed through on-line platforms providing improved impact and efficiency and often an excellent consumer interface.

Within this category of ADR, the Consumer Ombudsman model has a wide range of variants within different civil justice systems of Member States. It can be found in regulated sectors, working closely with sectoral regulators, such as a Financial Ombudsman, Energy Ombudsman, Communications Ombudsman etc.

ADR via Regulatory Redress

ADR via Regulatory Redress is a mechanism whereby a public enforcement body (typically the regulator of a market sector) has power to encourage or stimulate voluntary settlement of a mass claim as an alternative to imposing a fine, or other penalty, and/or in lieu of pursuing a court order for injunction or damages. It covers a wide range of consumer, public law and competition law issues. The most advanced regulatory authorities approach enforcement by identifying the root cause of the problem and agreeing actions to reduce the risk of reoccurrence of the problem. This mechanism seeks to ensure that such actions are implemented by the infringer and others and that redress/rectification is made by imposing a proportionate supervisory sanction.


ADR has proved to be the most effective and efficient pathway to deliver redress for unitary and mass claims. It is usually much less expensive much more simple and efficient than court proceedings.

Empirical research on an extensive database of case studies in EU Member States has clearly demonstrated the superiority in delivering collective redress via Regulatory Redress and Consumer Ombudsmen, by far surpassing any court-based mechanisms.

In addition, digitalization allows more and more use to be made of big data and machine learning, thereby developing modern techniques which offer further improvements on satisfactory and speedy outcomes for consumers and traders.

The table below provides a comparative overview of the different mechanisms against various criteria:

The table below provides a comparative overview of the different mechanisms against various criteria. These are scored with 3 points for “good”, 2 points for “fair”, 1 point for “poor” and 0 points for “none”. The individual values are then added together to form a total score. Consumer ombudsman achieves the best score, with a total of thirty-one points, followed by regulatory redress (twenty-five), Piggy-back (eighteen), collective action (sixteen) and simple ADR (four). Detailed scores are: Collective Action: 2 for advice, 0 for identification of infringement, 2 for identification of people harmed, 2 for access, 1 for cost to access, 1 for triage, 1 for duration, 1 for costs, 3 for outcomes, 2 for compensation, 1 for behaviour change. Piggy-back: 1 for advice, 0 for identification of infringement, 0 for identification of people harmed, 3 for access, 3 for cost to access, 0 for triage, 2 for duration, 2 for costs, 3 for outcomes, 3 for compensation, 1 for behaviour change. Regulatory redress: 1 for advice, 1 for identification of infringement, 2 for identification of people harmed, 3 for access, 3 for cost to access, 0 for triage, 3 for duration, 3 for costs, 3 for outcomes, 3 for compensation, 3 for behaviour change. Simple ADR: 0 for advice, 0 for identification of infringement, 0 for identification of people harmed, 2 for access, 2 for cost to access, 0 for triage, - for duration, - for costs, - for outcomes, - for compensation, 0 for behaviour change. Consumer ombudsman: 3 for advice, 3 for identification of infringement, 2 for identification of people harmed, 3 for access, 3 for cost to access, 3 for triage, 3 for duration, 2 for costs, 3 for outcomes, 3 for compensation, 3 for behaviour change.
Source: Delivering Collective Redress: New Technologies by Prof. Christopher Hodges, Oxford University and Prof. Stefaan Voet, Leuven University


At EU level, various legislations have framed the application of those mechanisms:

Alternative Dispute Resolution (ADR) Directive

The ADR Directive (2013/11/EU) on consumer disputes came into force in May 2013 and provides alternative ways of resolving unitary contractual disputes between consumers and businesses across the EU. The directive also aims to simplify and standardize the current process of dispute resolution for consumers.

It increases the quality and professionalism of ADR entities by requiring them to maintain up-to-date websites, providing consumers with easy access to information on their procedures and enable them to submit complaints online.

Online Dispute Resolution (ODR) Regulation

The ADR Directive had been taken in conjunction with the complementary European Online Dispute Resolution (ODR) Regulation (524/2013), implemented by Member States since January 2016. The ODR platform offers consumers and traders a single point of entry for the out-of-court resolution of online disputes. The ODR platform only uses dispute resolution bodies approved by their national governments meeting quality standards relating to fairness, transparency, effectiveness and accessibility.

The ODR platform is easy to use and takes users through the dispute resolution process in a step-by-step fashion. It provides translations in all EU languages and has inbuilt time limits for resolving complaints.

Consumer Protection Cooperation (CPC) Regulation

In the context of ADR via Regulatory Redress, the Consumer Protection Cooperation Regulation (EC No 2006/2004 or CPC Regulation) is highly relevant. This regulation establishes a cooperation framework allowing national authorities in the European Economic Area to jointly address breaches of consumer rules in case trader and the consumer are established in different countries.

This collective enforcement network is referred to as the "CPC Network". The European Commission supervises the cooperation between these authorities to ensure that consumer rights legislation is applied and enforced in a consistent manner across the Single Market.

Where do we stand

The European Commission concluded in its 2019 EU Justice Scoreboard that more Member States are promoting the voluntary use of alternative dispute resolution methods for private disputes compared to previous years.

The graph below illustrates this trend and Member States’ efforts in promoting the use of ADR through incentives which may vary depending on the area of law [1]

Promotion of and incentives for using ADR methods

The graphic shows promotion of and incentives for using ADR methods throughout EU member states. A total score is composed of the four areas “civil and commercial disputes”, “labour disputes”, “consumer disputes” and “administrative disputes”. Germany reaches the highest score of forty-four, while Luxembourg has the lowest score of eight. Administrative disputes are only used in Germany, Denmark, the Netherlands, Spain, Portugal, Greece, Estonia, Bulgaria, Latvia, Poland, Malta and Ireland. The other areas are distributed relatively evenly across all countries. Exceptions are Latvia and Ireland with no civil and commercial disputes, Slovenia with only a very low percentage of civil and commercial disputes, Luxembourg with no labour disputes and Italy with mostly civil and commercial disputes.
Source: The 2019 EU Justice Scoreboard, Communication from the Commission to the European Parliament, the Council, the European Central Bank, the European Economic and Social Committee and the Committee of the Regions COM(2019) 198/2

In its 2017 report evaluating the functioning of the European Online Dispute Resolution platform, the European Commission concluded that its first year of operation was very positive, with an impressive reach among consumers. The graph below shows the evolution of the number of complaints submitted on the ODR platform in 2016-2017.

Complaints submitted per month

The graph shows the trend of complaints submitted from the launch of the European Online Dispute Resolution platform. From February two thousand and sixteen to February two thousand and seventeen the number of complaints has risen from seven hundred and forty-four to two thousand four hundred and fifty-eight. The highest number was reached in December two thousand and sixteen, with a total of two thousand nine hundred and thirty-three complaints. All numbers over time: seven hundred and forty-four in February two thousand and sixteen, one thousand three hundred and ninety-eight in March, one thousand six hundred and twenty-five in April, one thousand five hundred and ninety-seven in May, one thousand seven hundred and eighty-seven in June, one thousand nine hundred and ninety-three in July, one thousand seven hundred and seventy-nine in August, one thousand eight hundred and seventy-three in September, two thousand and eighty-five in October, two thousand three hundred and sixty-two in November, two thousand nine hundred and thirty-three in December, two thousand nine hundred and twenty-one in January two thousand and seventeen and two thousand four hundred and fifty-eight in February.
Source: REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL on the functioning of the European Online Dispute Resolution platform established under Regulation (EU) No 524/2013 on online dispute resolution for consumer disputes

In addition, the ongoing institutional discussions around the Directive on Representative Actions represents an opportunity to introduce modern redress techniques. EJF welcomes the European Parliament’s position adopted in plenary on 26 March 2019 and which includes a provision stressing the possibility to establish national registries of collective redress actions that should be linked to the European Commission’s database for all communications between the CPC authorities.


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