Law on Alternative Dispute Resolution of Consumer Disputes No. 85(I)/2017

O.J. of the EU Part I(I) Law No. 85(I)/2017 No. 4610, 7.7.2017 The Law on Alternative Dispute Resolution of Consumer Disputes of 2017 is enacted with publication in the Official Gazette of the Republic of Cyprus in accordance with Article 52 of the Constitution.

Number 85(I) of 2017 THE LAW ON ALTERNATIVE DISPUTE RESOLUTION OF CONSUMER DISPUTES OF 2017

Preamble. For the purpose of harmonization with the act of the European Union titled: Official Journal of the EU: L 165, 18.6.2013, p. 63. "Directive 2013/11/EU of the European Parliament and of the Council of 21 May 2013 on alternative dispute resolution for consumer disputes and amending Regulation (EC) No 2006/2004 and Directive 2009/22/EC", The House of Representatives enacts as follows:

PART I INTERPRETATION - INTRODUCTORY PROVISIONS

Short title.

1. This Law shall be cited as the Law on Alternative Dispute Resolution of Consumer Disputes of 2017.

Interpretation. 2.-(1) In this Law, unless the context otherwise requires- "competent authority" means the Consumer Protection Service of the Ministry of Energy, Commerce, Industry and Tourism and any other public sector body, as defined by the provisions of Article 20; "Republic" means the Republic of Cyprus; "public sector" means the public service, any independent service or authority or office of an independent officer or any legal person of public law or public sector organization, including local government authorities, or any other public sector organization without legal personality established by law for the public interest and whose funds are either provided or guaranteed by the Republic; "alternative dispute resolution procedure" means a procedure as defined by the provisions of Article 4 and applied by an alternative dispute resolution body; "cross-border dispute" means any contractual dispute arising from the sale of goods or a service provision contract where, at the time of the consumer's order of the goods or services, the trader is established in the Republic and the consumer resides in a different Member State; "Court" means the competent court of the Republic of Cyprus; "domestic dispute" means any contractual dispute arising from the sale of goods or a service provision contract where, at the time of the consumer's order of the goods or services, the consumer resides in the Republic where the trader is also established; "trader" means any natural or legal person, private or public, who acts, possibly through another person acting on his behalf or for his account, for purposes which fall within the scope of his commercial, business, craft or professional activity; "single point of contact" means the Consumer Protection Service of the Ministry of Energy, Commerce, Industry and Tourism; Official Journal of the EU: L 165, 18.6.2013, p. 1. "Regulation (EC) No 524/2013" means Regulation (EU) No 524/2013 of the European Parliament and of the Council of 21 May on online dispute resolution for consumer disputes and amending Regulation (EC) No 2006/2004 and Directive 2009/22/EC; Official Journal of the EU: L 177, 4.7.2008, p. 6. "Regulation (EC) No 593/2008" means Regulation (EC) No 593/2008 of the European Parliament and of the Council of 17 June 2008 on the law applicable to contractual obligations (Rome I); "list" means the list of alternative dispute resolution bodies drawn up in accordance with the provisions of Article 21; "consumer" means any natural person who acts for purposes which are not included in his commercial, business, craft or professional activity; "Member State" means a Member State of the European Union; "Directive 2013/11/EU" means Directive 2013/11/EU of the European Parliament and of the Council of 21 May 2013 on alternative dispute resolution for consumer disputes and amending Regulation (EC) No 2006/2004 and Directive 2009/22/EC; "durable medium" means any instrument which enables the consumer or the trader to store information addressed personally to him in a way accessible for future reference for a period of time adequate for the purposes of the information and which allows for the unaltered reproduction of the stored information; "service provision contract" means any contract, excluding a sales contract, under which the trader provides or undertakes to provide a service to the consumer, and the consumer pays or undertakes to pay the price; "sales contract" means any contract, under which the trader transfers or undertakes to transfer the ownership of goods to the consumer, and the consumer pays or undertakes to pay the price, as well as any contract which has as its object the simultaneous provision of goods and services; Official Journal of the EU: L 266, 9.10.1980, p.1. "Rome Convention" means Convention 80/934/EEC on the law applicable to contractual obligations (Rome Convention), which was signed in Rome on 19 June 1980; "Minister" means the Minister of Energy, Commerce, Industry and Tourism; "alternative dispute resolution body" means any body of any name or description, which is established or appointed on a permanent basis, offers dispute resolution services through an alternative dispute resolution procedure and is registered in the list in accordance with the provisions of Article 21; "dispute resolution body" means any body, of any name or description, which offers dispute resolution services related to contractual obligations arising from sales contracts or service provision contracts between a trader established in the Republic and a consumer residing in the Republic or in a Member State.

(2) In this Law, a reference to an act of the European Community and/or the European Union means that act, as it is from time to time corrected, amended or replaced.

Place of establishment of trader and alternative dispute resolution body. 3. For the purposes of this Law- (a) A trader is established- (i) At the place of exercise of his business activity, if he is a natural person; 719

(ii) At the place of his registered office, central administration or exercise of business activity, including any branches, agencies or other establishments, if he is a company or other legal person or association of natural or legal persons, (b) The alternative dispute resolution body is established: (i) If it is managed by a natural person, at the place where such person exercises alternative dispute resolution activities; (ii) If it is managed by a legal person or association of natural or legal persons, at the place where such legal person or association exercises alternative dispute resolution activities or at the place of its registered office; (iii) If it is managed by a public sector body, at the place of the seat of such body.

Scope of application. 4.-(1) This Law applies to out-of-court resolution procedures of domestic and cross-border disputes regarding contractual obligations arising from sales contracts or service provision contracts between a trader established in the Republic and a consumer residing in the Republic or in a Member State, through the intervention of an alternative dispute resolution body, which proposes or imposes a solution or brings the parties into contact to facilitate or find an amicable solution.

(2) This Law does not apply- (a) To procedures before dispute resolution bodies where the natural persons responsible for the resolution of disputes are employees of the specific trader or are paid exclusively by him; (b) To procedures before consumer complaint investigation systems managed by the trader; (c) To non-economic services of general interest; (d) To disputes between traders; (e) To direct negotiations between a consumer and a trader; (f) To efforts made by the judge to resolve the dispute during the judicial process concerning that dispute; (g) To procedures initiated by a trader against a consumer; (h) To health services provided to patients by health professionals in order to assess, maintain or restore their state of health, including prescribing, dispensing and supplying medicines and medical devices; (i) To public providers of secondary or tertiary education.

(3) This Law establishes harmonized quality requirements for alternative dispute resolution bodies and alternative dispute resolution procedures in order to ensure that the consumer has access to high-quality, transparent, effective and fair out-of-court redress mechanisms.

Relationship with other legislative acts. 5.-(1) Unless otherwise provided in this Law, if a provision of this Law conflicts with another provision of other national harmonizing legislation regulating out-of-court redress procedures initiated by a consumer against a trader, the provision of this Law shall prevail. 159(I) of 2012.

(2) Notwithstanding the provisions of paragraph (1), the provisions of this Law apply subject to the provisions of the Law on Certain Matters of Mediation in Civil Disputes.

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(3) Subject to the provisions of paragraph (1), Article 14 of this Law does not affect the provisions for informing consumers during the out-of-court redress procedure under other legislative acts of the European Union, which apply in addition to the said Article.

PART II ACCESS AND REQUIREMENTS APPLICABLE TO ALTERNATIVE DISPUTE RESOLUTION BODIES AND ALTERNATIVE DISPUTE RESOLUTION PROCEDURES

Access to alternative dispute resolution bodies and alternative dispute resolution procedures. 6.-(1) The competent authority facilitates consumers' access to alternative dispute resolution procedures and ensures that disputes covered by this Law and concerning a trader established in the Republic can be referred to an alternative dispute resolution body, which meets the requirements of this Law.

(2) Alternative dispute resolution bodies- (a) Maintain an updated website that provides parties with easy access to information on the alternative dispute resolution procedure and allows consumers to submit electronic complaints and the necessary supporting documents; (b) Provide parties, upon request, with the information referred to in paragraph (a) on a durable medium; (c) Where applicable, allow the consumer to submit a complaint in a non-electronic manner; (d) Allow the exchange of information between the parties by electronic means or, if appropriate, by post; (e) Accept both domestic and cross-border disputes, including disputes covered by Regulation (EU) No 524/2013; and 138(I) of 2001 37(I) of 2003 105(I) of 2012. (f) When examining disputes covered by this Law, take the necessary measures to ensure that the processing of personal data is carried out in accordance with the rules of personal data protection in accordance with the provisions of the Law on the Processing of Personal Data (Protection of the Individual).

(3)(a) The Council of Ministers may designate public sector bodies as alternative dispute resolution bodies, in order to ensure full sectoral and geographical coverage and consumer access to alternative dispute resolution procedures.

(b) Bodies designated by the Council of Ministers as alternative dispute resolution bodies ensure that they meet the quality requirements provided in Part II and take all necessary measures to be recognized as alternative dispute resolution bodies.

(4) Alternative dispute resolution bodies may establish procedural rules that allow them to refuse to examine a specific dispute because- (a) The consumer has not attempted to communicate with the trader to discuss his complaint and seek, as a first step, to resolve the problem directly with him; (b) The dispute is trivial or based on a malicious complaint; (c) The dispute is being examined or has previously been examined by another alternative dispute resolution body or by a court; 721

(d) The value of the subject matter of the claim is lower or higher than a specific amount; (e) The consumer did not submit the complaint to the alternative dispute resolution body within a period of one year from the date on which the consumer submitted a complaint to the trader; (f) The examination of such a dispute would significantly harm the effective operation of the alternative dispute resolution body.

(5) When, in accordance with the procedural rules, an alternative dispute resolution body cannot examine a dispute submitted to it, it notifies both parties of the reasoning for its decision not to examine the dispute, within three (3) weeks from the receipt of the complaint file.

(6) The procedural rules applied by an alternative dispute resolution body in accordance with the provisions of paragraph (4) do not significantly hinder consumers' access to alternative dispute resolution procedures, including cross-border disputes.

(7) In cases where alternative dispute resolution bodies establish predetermined monetary limits in order to restrict access to alternative dispute resolution procedures, these limits should not be set at such a level as to significantly hinder consumers' access to the examination of complaints by alternative dispute resolution bodies.

Expertise, independence and impartiality. 7.-(1) The natural persons responsible for alternative dispute resolution possess the necessary expertise, are independent and impartial and- (a) Possess the necessary knowledge and skills in the field of alternative dispute resolution or judicial resolution of consumer disputes, as well as basic legal knowledge; (b) Are appointed for a term of office whose duration is sufficient to ensure the independence of their action and cannot be removed from their duties without just cause; (c) Are not subject to instructions from any of the parties or their representatives; (d) Are remunerated in a manner not linked to the outcome of the procedure; (e) Without undue delay, notify the alternative dispute resolution body of any circumstances that may affect or be perceived to affect their independence and impartiality or lead to a conflict of interest with any of the parties to the dispute they are called upon to resolve; the notification obligation applies throughout the alternative dispute resolution procedure; this obligation does not apply when the alternative dispute resolution body consists of a single natural person.

(2) Subject to the provisions of paragraph (a) of paragraph (2) of Article 10, alternative dispute resolution bodies have procedures that ensure that for the purposes of applying the provisions of paragraph (e) of paragraph (1)- (a) The said natural person is replaced by another, who is entrusted with conducting the alternative dispute resolution procedure, or otherwise; (b) The said natural person abstains from the alternative dispute resolution procedure and, where possible, the alternative dispute resolution body proposes to the parties to submit the dispute to another competent alternative dispute resolution body, or otherwise; (c) The circumstances are notified to the parties and the said natural person is allowed to continue conducting the alternative dispute resolution procedure only if the parties have not raised an objection, after being informed of the situation and their right to object. 722

(3) When the alternative dispute resolution body consists of a single natural person, only the provisions of paragraphs (b) and (c) of paragraph (2) apply.

(4) When the natural persons responsible for alternative dispute resolution are employed or paid exclusively by a professional organization or business association of which the trader is a member, in addition to the general requirements provided in paragraph (1) and, where applicable, paragraph (6), they must have a separate and specific budget sufficient to fulfill their duties.

(5) The provisions of paragraph (4) do not apply when the natural persons concerned belong to a collective body composed of an equal number of representatives of the professional organization or business association in which they are employed or from which they are paid, and representatives of consumer organizations.

(6) Alternative dispute resolution bodies, in cases where the natural persons responsible for dispute resolution form a collective body, must ensure the participation of an equal number of representatives of consumer interests and representatives of trader interests in such body.

(7) For the purposes of applying the provisions of paragraph (a) of paragraph (1), the competent authority encourages alternative dispute resolution bodies to provide training to the natural persons responsible for alternative dispute resolution and when such training is provided, the competent authority monitors the relevant programs of alternative dispute resolution bodies based on the information provided to it in accordance with the provisions of paragraph (z) of paragraph (3) of Article 21.

Transparency. 8.-(1) Alternative dispute resolution bodies publish on their websites, upon request, on a durable medium and by any other suitable means, clear and easily understandable information on the following: (a) Their contact details, including postal and electronic address; (b) The fact that alternative dispute resolution bodies are included in a list as defined in paragraph (2) of Article 22; (c) The natural persons responsible for alternative dispute resolution, the method of their appointment and the duration of their term of office; (d) Their participation in any networks of alternative dispute resolution bodies that facilitate the resolution of cross-border disputes; (e) The types of disputes they are competent to examine, as well as any limits; (f) The procedural rules governing the resolution of a dispute and the reasons why an alternative dispute resolution body may refuse to examine a dispute in accordance with the provisions of paragraph (4) of Article 6; (g) The languages in which complaints can be submitted to the alternative dispute resolution body and in which the alternative dispute resolution procedure is conducted; (h) The types of rules that the alternative dispute resolution body may use as a basis for resolving disputes, such as rules of law, principles of equity, codes of conduct; (i) Any preliminary requirements that the parties must fulfill for an alternative dispute resolution procedure to be initiated, including the requirement that the consumer attempt to settle the issue directly with the trader; (j) Whether the parties can withdraw from the procedure or not; (k) Any cost that will burden the parties, as well as any rules for imposing the costs of the procedure at the end; (l) The average duration of the procedure; 723

(m) Where applicable, the legal effects of the outcome of the alternative dispute resolution procedure, including sanctions for non-compliance in case of a binding decision for the parties; (n) Where applicable, the enforceability of the alternative dispute resolution decision.

(2) Alternative dispute resolution bodies are required to publish on their websites, upon request, on a durable medium and by any other means they deem appropriate, annual activity reports which include the following information regarding both domestic and cross-border disputes: (a) The number of disputes received and the type of complaints the disputes concerned; (b) Any systematic or significant problems that frequently arise and lead to disputes between consumers and traders; this information may be accompanied by recommendations on how such problems can be avoided or resolved in the future, in order to improve trader standards and facilitate the exchange of information and best practices; (c) The percentage of disputes that each alternative dispute resolution body refused to examine and the percentage of the various reasons for refusal referred to in the provisions of paragraph (4) of Article 6; (d) The percentage of alternative dispute resolution procedures that were discontinued and the reasons for this discontinuation, if known; (e) The percentages of solutions proposed in favor of the consumer and in favor of the trader, and of disputes resolved by amicable settlement; (f) The average time taken to resolve the disputes; (g) The percentage of compliance with the results of alternative dispute resolution procedures, if known; (h) Their cooperation within networks of alternative dispute resolution bodies that facilitate the resolution of cross-border disputes, if applicable.

Effectiveness. 9. Alternative dispute resolution bodies, for the purpose of ensuring their effectiveness, meet the following requirements: (a) The alternative dispute resolution procedure is available and accessible to both parties, electronically and non-electronically, regardless of where they are located; (b) The parties have access to the alternative dispute resolution procedure, without being required to use a lawyer or legal advisor; the alternative dispute resolution procedure does not deprive the parties of the right to receive independent advice or representation or support from a third party at any stage of the procedure; (c) The alternative dispute resolution procedure is free of charge or available for a nominal fee for consumers; (d) The alternative dispute resolution body to which a complaint has been submitted notifies the parties of the dispute immediately after receiving all documents containing information related to the complaint; (e) The outcome of the alternative dispute resolution procedure is notified within ninety (90) calendar days from the date on which the alternative dispute resolution body received the complete complaint file: 724

Provided that, in particularly complex disputes, the responsible alternative dispute resolution body has the discretion to extend the period of ninety (90) calendar days, after informing the parties of any extension of the deadline as well as the expected time required for the resolution