The Law No. 144/2015 of September 8 transposed Directive 2013/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 in Portugal the Consumer Arbitration Network.

1. What are consumer disputes?

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

2. What is ADR?

ADR refers to mechanisms available to consumers and businesses to try to resolve consumer disputes outside the courts, in a faster and less costly manner. ADR includes mediation, conciliation and arbitration. The ADR process begins with an attempt to reach an agreement through mediation or conciliation. If no agreement is reached, the parties may still resort to the Arbitral Tribunal through a simple and quick procedure.

3. What are ADR entities?

They are independent entities, with specialized staff, that impartially help the consumer and the business reach an amicable solution. These entities are authorized to carry out mediation, conciliation, and arbitration of consumer disputes. Such entities must be registered on the list provided for in Article 17 of Law No. 144/2015.

4. 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 (see ANNEX I).

5. How many ADR entities are there in Portugal?

In Portugal, there are ten Consumer Dispute Arbitration Centers. Seven of them are of general competence and regional scope, located in Lisbon, Porto, Coimbra, Guimarães, Braga/Viana do Castelo, Algarve, and Madeira. There is also a center of national territorial scope (subsidiary), the CNIACC – National Center for Consumer Conflict Information and Arbitration. In addition, there are two centers of specific competence specialized in the automotive sector and in the insurance sector.

6. How does a company know which ADR entity it should indicate to its consumers?

The place where the sales or service contract is concluded, which generally coincides with the establishment’s location, determines the competent arbitration center.

For example:

• A company with one or more commercial establishments in a given municipality should only indicate the ADR entity competent for that municipality.
• A company operating nationwide should indicate all competent entities.
• A car repair shop, an insurance company, or a travel agency must indicate the specialized entities for those sectors.

7. Who is required to inform consumers about ADR entities?

All suppliers of goods and service providers, including those who only sell products or provide services online, are required to inform consumers about the ADR entities available, those to which they have voluntarily joined, or those they are bound to by law. Excluded are only providers of Services of General Interest without economic consideration, such as social services provided by the state or on its behalf, health services, and public complementary or higher education services.

The obligations arising from Law No. 144/2015 apply, with necessary adaptations, to all economic sectors not excluded by that law, including those where there is already specific legislation providing for a similar obligation.

8. Is there any obligation to join an ADR entity?

This law does not impose adherence to any ADR entity, establishing only a duty to inform about the existing entities. However, there are cases of mandatory arbitration for essential public services, such as electricity, gas, water and waste, electronic communications, and postal services.

9. How should companies provide this information?

This information must be provided in a clear, understandable and appropriate manner to the type of good or service being sold or provided (Article 18(2) of Law No. 144/2015). For example:

• On the website of the suppliers of goods or service providers, if available.
• In the contracts of sale or service provision between the supplier or service provider and the consumer, when in written form or constituting standard contracts.
• If no written form exists, the information must be provided on another durable medium, namely a sign posted on the wall or displayed on the sales counter, or on the invoice delivered to the consumer.

10. Does the law provide a standardized model of information to be given to consumers?

No. However, a proposed draft of a notice is attached (Annex II).

11. Who is responsible for monitoring compliance with the obligation to inform consumers?

The Food and Economic Safety Authority and the sector regulators within their respective domains are responsible for monitoring compliance with these duties, instructing the respective administrative proceedings, and making decisions, including applying fines and accessory sanctions when necessary.

12. What are the consequences of failing to comply with the obligation to inform consumers?

Failure to comply with the obligation to inform consumers by suppliers of goods or service providers constitutes an administrative offense, punishable by:

• A fine between €500 and €5,000 when committed by a natural person.
• A fine between €5,000 and €25,000 when committed by a legal entity.

13. When does this new regime apply?

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

ATTENTION: Informing consumers about the 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  Annex 1