On June 26, 2025, the Council and the European Parliament reached a provisional agreement on modernizing the EU’s framework for alternative dispute resolution (ADR) in consumer matters.

The current ADR framework—established in Directive 2013/11/EU (ADR Directive)—has not been amended since its adoption in 2013. As noted in our previous blog, the European Commission recognized the need to modernize the system and, on October 17, 2023, proposed a legislative package to (i) amend the ADR Directive, and (ii) repeal the Online Dispute Resolution (ODR) Regulation, which created the European Online Dispute Resolution (ODR) Platform, on the basis that this platform was infrequently used. The ODR repeal regulation was formally adopted on November 19, 2024 and the ODR Platform will be discontinued on July 20, 2025. Since then, the focus has shifted to finalizing a reformed ADR framework.

Current ADR framework

The ADR Directive provides a voluntary framework for traders to resolve contract-based disputes with consumers through certified out-of-court mechanisms, rather than litigation.

     (i)          Scope of Covered Disputes

The ADR Directive applies to disputes between consumers and traders, concerning contractual obligations stemming from sales contracts or service contacts. It does not apply to disputes between businesses, nor to non-contractual claims such as tort or regulatory complaints. The Directive applies only where the trader is established in the EU.

    (ii)          Voluntary Participation and Information Obligations

The ADR Directive does not impose a general obligation on traders to participate in ADR procedures. However, Member States may make participation mandatory under national law, as long as this does not restrict the right of access to courts.

When a trader is either legally required or has voluntarily committed—such as by agreement—to use an ADR entity, they must inform consumers on their website and in any terms of use or contract about the relevant ADR body, including its name and website.

What Will Change Under the New Rules

The provisional political agreement reached in June 2025 introduces several important updates to the ADR framework. The compromise text has not yet been made available to the public. However, according to the official press release announcing the political agreement, the following changes to the ADR Directive have been agreed:

     (i)          Broader Scope of Covered Disputes

The revised Directive will continue to apply to disputes concerning contractual obligations. However, it will clarify that contractual obligations include the stages leading up to the conclusion of a contract, such as advertising and the provision of pre-contractual information.

The revised Directive will extend the scope to cover disputes involving third-country traders who direct their activities to consumers in the EU—if both parties agree to use ADR.

    (ii)          New Deadlines for Trader Responses

When a trader is contacted by an ADR entity about a commercial dispute, the trader will be required to respond to ADR requests within 20 working days. For complex cases, the deadline can be extended up to 30 working days. If the trader fails to respond within the applicable timeframe, the request will be deemed refused and the procedure will be closed.

The agreement reached between the Council and the European Parliament is provisional and must now undergo formal adoption by both institutions. We will continue to monitor the final adoption process and any implementing measures at national level.

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Covington & Burling regularly advises companies on all aspects of EU consumer law, including alternative dispute resolution (ADR) procedures and compliance obligations under the ADR Directive. We look forward to supporting you in meeting your EU consumer compliance obligations under the evolving regulatory landscape.

Tags: ADR, ADR Directive, alternative dispute resolution, ODR, provisional agreement
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