Bill No. 15100 provides for the introduction of a new procedure for resolving disputes between consumers and business entities through the creation of special bodies—alternative dispute resolution bodies. Such bodies are separate entities authorized to hear such disputes.

A mandatory prerequisite for filing a claim with a dispute resolution body is that the consumer must first file a complaint with the business entity.

The dispute may be heard, in particular, remotely (via videoconference), and the participation of an attorney is not mandatory.

The timeframe for resolving the dispute shall not exceed 90 calendar days from the date the complaint is received along with the necessary documents.

The dispute resolution procedure is free of charge for the consumer or involves a nominal fee not exceeding one non-taxable minimum income threshold.

The decision of the dispute resolution body is binding on the business entity. In the event of non-compliance, state oversight (control) measures may be applied to such an entity, including the conduct of unscheduled inspections.

At the same time, it should be noted that Draft Law No. 15100 is linked to Draft Law No. 15101, which proposes amending Part 1 of Article 263 of the Civil Code of Ukraine by adding a new paragraph 5, pursuant to which the conduct of an out-of-court consumer dispute resolution procedure is deemed grounds for suspending the statute of limitations.

The introduction of the institution of out-of-court resolution of consumer disputes is generally aimed at simplifying consumers’ access to the protection of their rights, reducing the burden on the judicial system, and ensuring more expeditious dispute resolution.

However, the proposed mechanism is not without a number of significant shortcomings.

In particular, the effectiveness of the procedure depends to a large extent on the participation of the business entity, which can effectively influence the course or outcome of the dispute resolution by refusing to participate or by merely going through the motions of fulfilling procedural obligations.

In addition, the draft law provides for the possibility of issuing both binding and non-binding decisions, which may lead to legal uncertainty for consumers and creates risks of abuse when selecting a dispute resolution procedure.

The issue of the independence of dispute resolution bodies warrants special attention, as they may be established with the participation of business entities or their associations, which potentially creates a conflict of interest and calls into question the impartiality of the proceedings.

Furthermore, establishing a mandatory pre-litigation procedure requiring consumers to first appeal to the business entity may delay the resolution of the dispute and create additional barriers to the exercise of the right to an effective remedy.

Despite the provision for the option to go to court, the lack of effective mechanisms for enforcing the decisions of dispute resolution bodies may negate the practical value of such a tool for consumers.

General Conclusion

Thus, Bill No. 15100 establishes an alternative mechanism for resolving consumer disputes, which has the potential to improve the accessibility and speed of consumer protection. At the same time, its effectiveness will depend on ensuring the independence of dispute resolution bodies, the good-faith participation of business entities, and the improvement of mechanisms for enforcing adopted decisions.