An alternative way of resolving dispute with consumer participation: experience for Ukraine

Abstract

Background. The Government-endorsed Concept of State Policy for Consumer Protection by 2020 recognizes the need to reform a consumer protection system that has lost its control and is not acting in the interests of the multi-million consumer community.
Governments are being chaned, but no one is paying attention to this problem, which exacerbates the situation in the country and leads to more active actions and consumer demands: there are no constitutional guarantees for state protection of legitimate consumer rights; there is no effective state body for consumer protection, independent  from industrial interests; there is no national system for handling consumer complaints and compensation for violations of rights and illegal actions, resulting in consumers of Ukraine being unprotected and virtually disenfranchised against the dishonest actions of certain authorities and economic entities.
Analysis of recent researches and publications. The legal problems of the consumer protection system were investigated. However, their works did not propose specific mechanisms for introducing alternative ways of resolving consumer disputes.
The aim. Legal analysis of the grounds for introducing alternative ways of resolving consumer-related disputes, based on an analysis of best European practices.
Materials and methods. General and specific research methods were used to elaborate on the topic outlined.
Results. The state function of «consumer protection», enshrined in the Constitution of Ukraine and fundamental international and European consumer protection instruments ratified in Ukraine, has become declarative and, as a consequence, consumers are deprived of an accessible, effective and impartial mechanism for protecting their rights. The state should provide, in addition to the generally accepted (state) mechanisms of protection, also alternative ways for fair, urgent, unreated to significant costs -settling disputes and obtaining consumer legal protection.
Europe-wide practice demonstrates effective approaches to alternative ways of resolving consumer policy disputes. In view of the current situation regarding inefficient state mechanisms for consumer protection in Ukraine, the German experience of alternative ways of resolving consumer disputes is analyzed, as exemplified by Schlichtunqgsstelle fur den öffentlichen Personen verkehre.V. (Söp), which is an Independent Consumer arbitration Comission. Here we have analysed Söp’s work on the out-of-court settlement of individual disputes between travelers as consumers and companies in the transport and tourism sectors which can show us the great mechanisms of solving above-mentioned problems.
Conclusion. In Ukraine, one of the most effective and promising areas in the field of consumer protection should be the introduction (normalization) of a system of alternative ways of resolving consumer disputes. We are convinced that our state should offer the option of choosing the consumer’s remedy, and provide a mechanism for resolving disputes through alternative means that will allow parties to avoid state litigation (going to court is preferable to use as an exclusive way of settling a legal dispute).