Bills won't shock you, but still no class action lawsuits: 3 advantages and disadvantages of new law

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The new Law on Consumer Protection is ready, its proposal has been adopted, as Telegraf Biznis was the first to report at the beginning of the year.

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It is a law that has been awaited for a while, and its main purpose is faster resolution of consumer disputes, more efficient protection of consumer rights, but also benefits for merchants.

We have been told that for the first time, out-of-court protection will be provided as an obligation. That is, with the mediation of the out-of-court dispute resolution body registered by the relevant ministry, it will be mandatory for merchants.

The adoption of the law will be followed by activities to raise public awareness about the benefits of out-of-court dispute resolution and training of out-of-court dispute resolution bodies in accordance with EU standards.

Apart from new rules that are positive, the law still has some shortcomings. But let's start with those good thing - it's the "Don't Call" registry and out-of-court dispute resolution and misdemeanor orders.

Dissatisfied customers will have the opportunity to quickly and efficiently solve the problem in a cost-free out-of-court procedure. The "Don't Call" registry will prevent aggressive merchants from promoting and selling goods and services to citizens who do not want them over the phone. And for consumers, there will be no more surprises due to the amount on the bill, for example, for the repair of a home appliance. The trader will have the obligation to calculate the bill with the specification and obtain written consent of the customer for the provision of the service, if its value is higher than 5,000 dinars.

"The new act envisages that the work of the body for out-of-court settlement of disputes, which should allow consumers to have just resolution quickly, will be financed from the budget. The procedure is free for both parties. Merchants are under obligation to participate, and if they do not, they will have to pay a fine according to the misdemeanor order. This will relieve the courts that are overwhelmed with consumer complaints, and will avoid the statute of limitations," Marko Dragic, legal advisor with the Novi Sad Consumers' Association (NOPS), has told Telegraf Biznis.

Class action lawsuits left out again

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However, the class action lawsuit provision has been left out of the legislation this time as well.

It was removed from the Law on Civil Procedure by the decision of the Constitutional Court in 2014, and after that there have been announcements that it would make a comeback. As Dragic points out, it is cheaper and more efficient to fight one merchant with a single lawsuit.

"If we are keeping pace with the EU, the basic thing was to introduce class action lawsuits and harmonize that, because that would represent a higher degree of consumer protection," stated Dragic.

He added that the proposal did not include items concerning conformity of products, i.e. that those that were valid in 2014 when the previous law was adopted have been transferred.

These are related, for example, to keeping original packaging, often very bulky, whose sole purpose is to retain the right to a possible complaint. However, Dragic explains that having a product's packaging is not a condition for a complaint, and that you need an invoice or a bank statement as proof of having bought the product in question.

"The disadvantage is that responsibilities have been transferred from the tourism sector to consumer protection. I am not saying that it is bad in advance, because it's positive that conditions for agencies and termination of contracts have been tightened, but they still have a place in the Law on Tourism. Thus, we will not see any significant changes regarding the Law on Consumer Protection. One difference is the misdemeanor order and out-of-court settlement of disputes," he concluded.

(Telegraf Biznis)