New online ADR mechanism for resolving disputes with consumers in Russia

In March 2021, the Government of the Russian Federation submitted to the State Duma amendments to the law on consumer protection, which will allow online sellers and buyers to make claims and settle disputes regarding such claims out of court through a special online service.

The draft of Federal Law No. 1138398-7 (the “Draft”) provides for the emergence of a mechanism for resolving disputes between consumers and sellers through the Unified State Services Portal. The consumers will be able to send their complaints in electronic form and follow the progress of their application, while the seller or contractor will be obliged to consider and respond.

Upcoming ADR mechanism

The growing number of consumer complaints related to online shopping and online services drives the need to create a system of pre-trial dispute resolution mechanisms. The new dispute resolution system will help reduce the costs of consumers and the state when it comes to conducting litigation, business costs for the administration of processing, and storage of consumer claims in paper form.

Moreover, back in 2013, the European Union adopted Regulation (EU) No. 524/2013 of the European Parliament and of the Council of 21 May 2013 on online dispute resolution for consumer disputes, while it also amended Regulation (EC) No. 2006/2004 and Directive 2009/22/EC. Since 2016, the UN Commission on International Trade Law promoted this form of conflict resolution.

The proposed approach to online consumer dispute resolution in the Draft law is a timely solution that guarantees consumers, at the legislative level, a wide range of permissible ways to protect their rights and efficiency in solving emerging problems.

At the same time, certain points in terms of the ADR mechanism need improvement.


The Draft provides for the creation of a special online service for resolving consumer disputes, to apply to present, consider and satisfy consumer claims. It is important to note that the service will not have a separate digital platform, but as an integral part of the Unified State Services Portal. According to the logic of the legislator, this will ensure the maximum coverage of the population using electronic services. Said activity is partly due to the systematic expansion of the portal’s functionality, but to a greater extent the difficulty of obtaining certain services offline during the COVID-19 period.

Compared to other methods of settling disputes, the ADR procedures primarily rely on the principle of confidentiality.

The principle of confidentiality of an ADR procedure, such as e.g. mediation, is the opposite of the principle of publicity of court proceedings. If it is important to keep the details of the dispute from prying eyes, the procedure may constitute a viable alternative to litigation.

Is it possible to comply with this principle while using the electronic service of the Unified State Services Portal? The answer would have been positive if the legislator had fixed guarantees of compliance with this principle in the Draft law. At present, these guarantees do not exist in said law. It is important to provide the parties to the process with the opportunity to keep the necessary aspects of the proceedings secret, otherwise this mechanism will not meet the basic principles of ADR proceedings.

Involvement of persons contributing to the resolution of the dispute

The Draft law provides for possible involving experts, mediators and other persons at the initiative of the disputing parties in order to assist parties in resolving a dispute using an online service. However, the Draft does not clarify the mechanism for attracting such persons which it logically should.

According to the Draft, payment for the services of these persons in the settlement of disputes will be carried out in accordance with the requirements of the Russian Law on protection of consumer rights. However, the current version of the Russian Law of protection of consumer rights does not contain a rule regarding the reimbursement of the mediator and other persons contributing to the resolution of the dispute.

This legislative text establishes rules only for one situation: distribution of expenses for the examination in case of shortcomings of goods. The general rule stipulates that if, as a result of the examination of the goods, it is established that their shortcomings arose due to circumstances for which the seller is not responsible, the consumer is obliged to reimburse the seller for the costs of conducting the examination. This provision does not regulate the procedure for covering the costs of the expert’s or mediator’s services in any way, and so this issue remains uncovered by the legislator.

As expected, this ADR mechanism should allow businesses and buyers to reduce the cost of litigation as well as the cost of storing and processing documents in paper form, and also relieve the courts of work. At the same time, the Draft does not propose rules on the distribution of costs for the online ADR procedure.

Future outlook

The Draft aims to create favourable conditions for ensuring effective protection of consumers’ rights using mechanisms for alternative dispute resolution and information technology. This should strengthen consumers’ confidence in online commerce, as well as simplify and make protection of their rights easier and more accessible, while also reducing the burden on the judicial system.

Until now, there has been no legal regulation of relations in Russia on the implementation of online dispute resolution procedures.

Moreover, this type of ADR is compliant with similar mechanisms which other countries now increasingly use as well. For example, in the Canadian province of British Columbia, online arbitration has been operating since 2017. The Civil Resolution Tribunal considers cases on material claims up to $5,000, strata property (condominium) disputes of any amount, societies and cooperative associations disputes of any amount, as well as vehicle accident disputes.

Of course, there are flaws in the Draft, but the idea itself is promising. With this dispute settlement mechanism, the seller will not be able to ignore the buyer’s claim, and the most important advantage is that the online service will be free for all participants. The parties will be able to engage experts, mediators and independent specialists and it will be possible to make claims both to local and foreign online stores. All this will undoubtedly help the development and approval of ADR in Russia, especially in a difficult period for conducting offline proceedings.

Posted in: consumer disputes

About the Author:

Konstantin Voropaev obtained an LLM degree with distinction at Robert Gordon University (Scotland) in 2017 having previously graduated with honours from Omsk State University in 2012. His professional interests include various legal areas, compliance and ethics procedures. He deals with international commercial arbitration in different jurisdictions (Russia, Central Asia, and Europe), legal matters in pharmaceutical production and medical affairs in clinical trials, civil and contract legal issues, compliance.

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