NATIONAL REPORTS 15 NOVEMBER 2006

BELGIUM NATIONAL REPORT

1. General Overview

In Belgium there are several out-of-court schemes designed for consumer-to-business disputes in specific sectors, as well as numerous out-of-court schemes with a more general scope, which can also be deployed by consumers for solving disputes with business entities. In-court there exist no alternative individual procedures specifically designed for solving consumer-to-business disputes. The alternative in-court dispute resolution scheme that does exist is not specifically adapted for solving consumer-to-business disputes and is, therefore, not frequently used in that respect. However there is a popular collective action, the request for a cease and desist order, which has become an effective mechanism for solving consumer to business disputes (amongst other things). Collective redress aimed at the protection of a series of individual interests (action for damages) is not available in Belgium.

A. Out-of-Court Mechanisms The out-of-court mechanisms can be divided into three main categories: arbitration schemes, mediation schemes and ombudsmen.

1.

Arbitration schemes

In Belgium numerous arbitration schemes, organised by all kinds of associations and commissions, exist which are all based on and regulated by articles 1676 to 1723 of the Code of Civil Procedure. A large number of these associations or commissions have issued rules and regulations concerning the specific arbitration procedure they organise, completing and, to the extent allowed, modifying the rules provided by articles 1676 to 1723 of the Code of Civil Procedure. 1.a. Arbitration schemes specifically designed for consumer to business disputes

Three commissions organise arbitration schemes specifically designed for disputes between consumers and businesses of a specific sector. The most popular and most widely used of these arbitration schemes (some 300 cases per year) is organised by the Geschillencommissie Reizen / Commission Litiges Voyages (Commission for Travel Disputes) for solving disputes in the travel sector. The Geschillencommissie Meubelen / Commission Disputes Meubles (Commission for Disputes concerning Furniture), organising arbitration for disputes in the furniture sector, and the Geschillencommissie Verbruikers Textielreinigers / Commission darbitrage Consommateurs-Entreprises de lentretien du textile (Commission for Disputes concerning Textile Cleaning), organising arbitration for disputes in the sector of textile cleaning, are

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less well known or, at least, less used: some 35 cases a year for the Commission for Disputes concerning Furniture and some 70 cases a year for the Commission for Disputes concerning Textile Cleaning. These commissions have all been set up through cooperation between consumer organisations (most importantly TestAankoop / TestAchat) and professional organisations of the sector. Partly as a consequence of this, the arbitration procedures they organise present a lot of advantages. First of all they are specialised, so that arbitral awards are usually of good quality, and show a high degree of uniformity, thereby creating legal security. Secondly, they often have a more flexible procedure and a final award will in most cases be reached faster than through ordinary in-court procedures. Further, these procedures are in most cases cheaper than ordinary judicial procedures. The Commission for Travel Disputes is subsidised by the government; the arbitral schemes organised by the other organisations mentioned above are not subsidised but partly financed by the relevant sector. Finally, the awards of these bodies are final and binding and can be enforced (after exequatur) like any judicial decision. These schemes however also have some disadvantages. Most importantly, none of these schemes allow for appeal, although the annulment of the arbitral award can be claimed before the ordinary courts on very limited -mostly proceduralgrounds. As an example of the relatively similar procedures set up by these organisations, the procedure developed by the Commission for Travel Disputes will be further discussed in part 2 of this report.

1.b.

Arbitration schemes not specifically designed for consumer to business disputes

In addition to the above mentioned arbitration schemes designed for consumer-to-business disputes, there are numerous general or sector specific arbitration schemes, which were not specifically designed for consumer to business disputes, but can be, and in some cases are, in practice often used to solve such disputes. The most well known arbitration scheme in Belgium is CEPINA / CEPANI (Belgian Centre for Arbitration and Mediation), which was established in 1969 at the initiative of the Belgian Organisation for the ICC and the Federation of Belgian Enterprises. The costs of the CEPINA procedure and the fees of the arbitrators appointed by CEPINA are fully borne by the parties, so that in practice it is almost exclusively used for disputes involving large amounts of money, which is typically not the case with respect to consumer-to-business disputes. The same applies to other arbitration schemes, both with a general scope - such as the Instituut voor arbitrage / Institut dArbitrage (Institute for Arbitration) and the European Arbitration Organisation - and with a more specific scope - such as Legibel (disputes between insured persons with a legal expenses insurance), the Belgian Arbitration Commission for Sport, the Arbitration Chamber for Buildings and Real Estate, the
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Association Dispute Resolution Automation and the Chamber for Conciliation and Arbitration of the District of Nivelles. There is one exception to the general rule that these schemes are not typically used for consumer-to-business disputes. Disputes concerning real estate, including consumer-tobusiness disputes in this sector, are often the subject of arbitration in one of the above mentioned schemes as most entrepreneurs have an arbitration clause in their general conditions. These disputes in principle involve large amounts of money and need a quick solution. We will not further elaborate these schemes in part 2 of the report. A further type of arbitration schemes which is not aimed at consumer-to-business disputes specifically, does however deserve further elaboration. The arbitration schemes organized by the different Ordes van advocaten / Ordres des avocats (local bars) for disputes regarding lawyers fees are frequently used by consumers. One example of such arbitration procedure (organized by the order of Dutch speaking lawyers of the Brussels bar) will be elaborated in further detail in part 2 of this report.

2.

Mediation schemes

A number of mediation schemes exist in Belgium. These mediation schemes are freely organised, since, until recently, there was no general framework regulating the minimum standards and providing supplementary provisions. On 30 September 2005, the law of 3 February 2005 entered into force, introducing a new part (VII) in the Code of Civil Procedure (articles 1724 to 1737), devoted to mediation. It is unfortunate, however, that these provisions have not been introduced as general minimum standards and supplementary provisions for all mediation schemes (as is the case for arbitration, cfr. supra), since they tackle critical quality issues, which are not always dealt with in existing mediation schemes. These new provisions, for example, provide for (i) certain conditions which should be fulfilled before persons can be officially recognized as mediators (evidence of competence, guarantees of independence and impartiality, conditions concerning criminal or disciplinary past of the mediator, ); (ii) a permanent education program officially recognized mediators have to follow; and (iii) confidentiality requirements (any documents provided or declarations made during the mediation procedure are confidential and cannot be used as evidence in any later judicial procedure, unless both parties agree thereto; the mediator is also explicitly bound by a confidentiality obligation). It is also interesting that in the context of these new provisions on mediation, parties can either voluntary agree to introduce a mediation procedure, or be obliged by any judge or court (except the Belgian Supreme Court (Hof van Cassatie / Cour de Cassation)) to go through a mediation procedure. Another major advantage of this new mediation procedure is that if mediation is introduced in accordance with these provisions, prescription periods for the underlying claims are suspended. Moreover these new provisions introduce a simplified homologation procedure to ensure that an agreement reached as a result of the mediation process is an enforceable document. As this law very recently came into effect, it is too early to make a useful evaluation of it. As was mentioned above, this law continues to allow mediation to be organized outside the scope of these new provisions of the Code of Civil Procedure, so that the existing
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mediation schemes, except in the case that they are modified to comply with these provisions (e.g. in order to only utilise officially recognized mediators), will not enjoy these advantages. 2.a. Mediation schemes specifically designed for consumer-to-business disputes

There are four out-of-court mediation schemes specifically designed for consumer-to business-disputes in a specific sector: the Verzoeningscommissie Tweedehandsvoertuigen / Commission de conciliation pour vhicules doccasion (Reconciliation Commission for Second-hand Cars); the Verzoeningscommissie Bouw / Commission de Conciliation Construction (Reconciliation Commission Construction); and the Bemiddelingsdienst Banken Krediet Beleggingen / Service de mdiation Banques - Crdit - Placements (Mediation Service Bank Credits Investments). More recently (October 2004) the Commission for Travel Disputes has set up a mediation scheme, alongside its longstanding arbitration procedure. As all these schemes are the result of cooperation between consumer organisations and the particular sector, they have the advantage of specialised mediators, resulting in a high probability of reaching optimal results. Whereas the popularity of the Reconciliation Commission Construction founded in 2001increases yearly (with 54 cases in 2004) and tends increasingly to replace other out-ofcourt schemes in this sector, the Reconciliation Commission for Second Hand Cars which was founded in 1992 - can hardly be considered successful, with only 3 cases since its constitution. The Mediation Service Bank Credits Investments was founded in 2004 and is the successor of the Ombudsman Bank Credits Investments. The Mediation Service Bank Credits Investments is composed of the former Ombudsman on the one hand and representatives of consumer organizations on the other hand. The Ombudsman was very popular (for example, it dealt with 1.395 complaints in 2003). The number of complaints dealt with by his successor, the Mediation Service Bank Credits Investements subsequently significantly decreased to 852 complaints in 2004 and 560 complaints in 2005. The annual report for 2004-2005 gives as a possible explanation that the financial institutions solve more disputes themselves, so that the files that are introduced with the Mediation Service are more complicated, as the simpler cases are dealt directly within the financial institutions. We will discuss the Reconciliation Commission Construction and the Mediation Service Bank Credits Investments in part 2 of this report.

2.b.

Mediation schemes not specifically designed for consumer to business disputes

A certain number of organisations / commissions mentioned above also offer mediation services (such as CEPINA, the European Arbitration Organisation and the Association Dispute Resolution Automation). The Brussels Business Mediation Centre VZW only offers mediation, and can in theory also deal with consumer-to-business disputes. This scheme will not be elaborated in detail in part 2 of the report.

3.

Ombudsmen
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A last category of out-of-court means of consumer redress are the ombudsmen. In Belgium there are an increasing number of ombudsmen, both in the private and in the public sector. Most of these ombudsmen are popular and well-known by consumers. They are often called upon by consumers having a complaint concerning the service involved, as the formalities to do so are few and the barriers to contact them low. Their task is most importantly mediation. In the case that one of the parties is not interested in mediation, they can issue a specialist opinion, which, although not binding, may help the parties in deciding on the usefulness of taking the dispute to court. An important example in the private sector is the Ombudsman der Verzekeringen / Ombudsman des Assurances (Insurance Ombudsman). The Ombudsman of the Post; the Ombudsman of the NMBS / SNCF (the Ombudsman for the National Railway Company); the Ombudsdienst voor Telecommunicatie / Service de Mdiation pour les Telecommunications (Ombuds Service for Telecommunication) and the Ombuds Service for the MIVB (the Brussels public transport company) are the most important examples of ombudsmen in the public services sector. It should further be mentioned that the Belgian Banking, Finance and Insurance Commission (a prudential authority) can give a non-binding opinion in the context of disputes on certain aspects of insurance law. Finally, a variety of ombuds services exist in the public administration sector, at all levels of public authority (including national, regional (both Flemish and Walloon) and communal), which we will not discuss any further. In part 2 of this report we will discuss the Insurance Ombudsman in more depth.

B. In-court mechanisms In Belgium there are no individual in-court mechanisms specifically designed for consumer redress. There is only one alternative in-court mechanism with a general scope of application, which may also be deployed for consumer-to-business disputes. In every district in Belgium, there is a vrederechter / juge de paix (judge of the peace), competent to handle claims below EUR 1.860 (in addition to certain specific general competences, including disputes on consumer credit). Although it is not an actual small claims procedure, certain aspects of the procedure are simplified, or in practice less formalistic, when compared to ordinary court procedures. Consumer disputes constitute a relatively small part of the disputes brought before the judge of the peace. Most consumer disputes dealt with by the judges of the peace relate to consumer sale and consumer credit. This procedure will be further elaborated in part 2.

C. Collective Redress Belgium does not have a collective action for the protection of a series of individual interests, such as a class action.

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An effective collective action for the protection of collective interests (injunction) does, however, exist: the action for a cease and desist order (falling within the scope of directive 98/27). The procedure is designed to obtain immediate cessation of any acts contrary to fair trade practices, whereby a seller harms or could harm the professional interests of one or more other professionals or (more important in the context of this study) the interests of one or more consumers (articles 93 and 94 Belgian Unfair Trade Practices Act). The procedure can also be used to obtain cessation of infringements of specific provisions of the Act mentioned and the procedure has been introduced in many other Acts protecting the interests of consumers directly or indirectly. Not only the parties having a specific individual interest, but also the Minister of Economic Affairs, professional and inter-professional organisations with legal capacity and consumer organisations fulfilling certain criteria, can introduce a request for a cease and desist order. This mechanism is popular. It is also the most interesting alternative means of consumer redress in Belgium with a general scope. It will be further examined in part 2 of this report.

2. Specific information on each form of redress

2.1

OUT-OF-COURT CONSUMER REDRESS PROCEDURES / MECHANISMS

GESCHILLENCOMMISSIE REIZEN VZW / COMMISSION DE LITIGES VOYAGES ASBL (COMMISSION FOR TRAVEL DISPUTES CTD)

IDENTIFICATION

Out of court consumer redress procedure (mainly for arbitration possibility of mediation) A. Detailed Description and Assessment of Specific Aspects

SUMMARY DESCRIPTION A. LEGAL BASIS The legal basis for this procedure is the general provisions on arbitration in the Belgian Code of Civil Procedure (art. 1676 - 1723). The organization and functioning of the specific arbitration procedure organized by the CTD is regulated by the Dispute Regulations of the CTD, as issued by the CTD. NB: Article 38 of the law of 16 February 1994 concerning the regulation of tour operators and travel agency contracts provides that the King can found a dispute commission of which he determines the organization, the functioning and the composition. The King has however not made use of this possibility. B. COMPETENT AUTHORITY The competent authority is the Board of Arbitrators, a non-judicial body composed by the CTD.

ASSESSMENT The legal basis is clear and sufficient. To our knowledge there have been no cases concerning lack of legal basis of this procedure.

If the parties have agreed in the general travel conditions or, after the dispute has arisen, by an arbitral compromise to

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The CTD is mandated by the parties to choose the arbitrators. The Board of Arbitrators is composed of a president and either two or four other arbitrators. The president, chosen by the CTD with the mutual consent of the representatives of both the consumer organisations and the travel sector, must be independent and have a law degree. The members of the CTD representing the travel sector and the members of the CTD representing the consumer organisations each choose half of the remaining arbitrators, although the arbitrators they respectively choose however do not act as party-arbitrators. Independence and impartiality should be guaranteed by the way in which the Board of Arbitrators is composed. The Code of Civil Procedure moreover provides a procedure for replacement of arbitrators in cases of justified doubt on the impartiality or independence of the arbitrator involved.

subject their dispute to the CTD arbitration procedure, this procedure has a preclusive effect over other procedures (including ordinary in-court procedures) for the tour operator / travel agent, except for the possibility in urgent cases to ask the ordinary judge (in-court) for either measures preserving the status quo or a preliminary decision. The consumer has, notwithstanding his agreement with an arbitral clause in the contract, the choice to use the ordinary courts. The same applies with respect to crossborder disputes, as the authority of the CTD is always based on an agreement of the parties. Cross-border disputes are rather exceptional (e.g: 9 cases in 2004). These cases involve disputes between consumers of mainly French, but also Dutch and Luxembourg, consumers who have contracted with a Belgian tour operator or travel agent. The procedure is easily accessible. There are no rules of standing impeding consumers from other member states or countries from effectively using this form of redress.

C. WHO CAN INITIATE THE PROCEDURE RULES OF STANDING

Each of the parties to a travel contract, subject to the general travel conditions issued by the CTD, can initiate the procedure. The consumer however has the possibility to refuse the procedure before the CTD within 15 days of being summoned. There are no specific rules of standing, so that the same rules as for ordinary in-court procedures apply, it being understood that the legal administrator of the goods of minors, should ask permission of the judge of the peace before signing a contract with an arbitration clause.

D. TYPES OF DISPUTES

The CTD can be used for every dispute with its origin in the execution of a travel contract subject to the general travel conditions, concerning the contract and involving the traveler, except for disputes concerning corporal injuries and disputes with tour operators or travel agents which have gone bankrupt.

Disputes concerning corporal injuries are excluded because these disputes often have criminal law aspects (public order) and because medical examinations are often necessary, considerably complicating the procedure. Disputes with a professional party which has gone bankrupt are excluded on the basis of a general rule of Belgian civil procedure that all claims with respect to bankruptcy fall within the exclusive competence of the commercial court.

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E. MAIN PROCEDURAL RULES

The procedure is focused on arbitration, although settlement in the course of the procedure is possible and will be enacted by the board of arbitrators. The procedure is mainly in writing (with oral debates), without possibility for the use of new information communication technologies. The procedure is introduced by filling out and signing a questionnaire designed by the CTD, and sending this by registered mail to the secretary of the CTD. Within fifteen days after the filing of the questionnaire, the plaintiff has to pay a deposit of 10 % of the sums claimed with a minimum of EUR 100. There are no specific time limits set to bring a claim, so the general rules for prescription of a claim are applicable. Confidentiality issues are dealt with as follows: the debates are not public. The awards may be published partly or in full after deleting all means of identification. If, however, a tour operator or travel agency does not comply with the arbitral award, it may be published in the magazines of the consumer associations that are members of the CTD. Unless the parties have agreed otherwise, the CDT freely judges on the admissibility of evidence and its value. Procedural rules are enforced by not allowing introduction by other means than the questionnaire mentioned before and by refusing briefs which have not been submitted in time. Appeal is not possible as a means of enforcement of procedural rules. Annulment of the arbitral award before the ordinary courts is only possible on very strict grounds, including when the parties have not had the chance to argue their rights and present their arguments or if any imperative rule of the arbitration procedure has been violated, to the extent that such a violation has had an influence on the arbitral award. If the parties come to an agreement during the debates, that settlement will be incorporated in the arbitral award, and can be enforced in the same way as any other arbitral award. No reflection period or any other formal requirements regarding consumer consent are provided for. The award of the board of arbitrators is final: it is binding on the parties and for the ordinary courts (except for limited annulation possibilities, cfr. supra).

Compared to ordinary judicial procedures, the procedural rules of the CTD are more flexible. The composition of the board of arbitrators should sufficiently guarantee independency and impartiality. Arbitration supposes agreement of the parties. For travel disputes this agreement is in most cases reached by adherence to the general travel conditions issued by the CTD and very widely used by tour operators and travel agents in Belgium. There is, therefore, only a remote chance that disputes with travel agents or tour operators from other countries will be subjected to the CTD. The procedure would be easily adaptable to allow communication with new communication technologies. Tour operators and travel agents can be obliged to participate in this kind of proceedings in the case that a contractual clause to that effect applies. Consumers cannot, notwithstanding any such contractual clause, be obliged to participate in a procedure before the CTD. The procedure is rather confidential, although arbitrators are not explicitly bound by a confidentiality clause. The procedure is very transparent (every party receives copy of the other partys file at the moment it is filed in court; at least half an hour before the start of the oral debates, the full file as it will be submitted to the board of arbitrators can be examined by the parties). The decision making process is also transparent; awards have to be based on articulated reasons and, if not, they can be annulled before the ordinary courts. Rules on evidence are satisfactory for consumers to present their case, as facts can be proven by all means. Consumers get access to all documents / evidence submitted by the other parties. There is however no rule in Belgium that obliges parties to bring all available evidence, including evidence damaging for the party involved. Arbitrators can order a party to bring certain evidence. Claims for corporal damages cannot be brought before the CTD. The remedies are enforceable as ordinary

F. REMEDIES THAT CAN BE OBTAINED

The remedy that is in practice almost exclusively obtained is damages. As there are no specific rules, the ordinary rules for the calculation of damages and the types of damages which can be covered, apply (i.e.

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only direct damages, no consequential damage and to a limited extent moral damages). The Board of Arbitrators can also award a periodic penalty payment (astreinte / dwangsom) in order to ensure the execution of the judgment (e.g. an amount per day that the judgment is violated) (art. 1709 bis Code of Civil Procedure). G. COSTS INVOLVED FOR THE PARTIES The CTD is subsidised by the Ministry of Economic Affairs, so that the parties only have to pay a fixed percentage of the damages claimed. The plaintiff has to deposit an amount of 10 % of the damages claimed as a kind of guarantee (quantification of damages is therefore obliged from the introduction of the claim). In the end, the party against whom the board of arbitrators has decided has to bear the costs. If both parties are partly in the wrong, the costs may be split and this will also be the case if the plaintiff has estimated the damages too high. If a settlement has been reached, the deposit is acquired by the CTD; the parties have to provide in their settlement which party or parties will bear these costs. Tour operators or travel agents moreover have to pay a lump sum of EUR 100 c.q. 225 (member or nonmember of a travel association which is member of the CTD) per dispute introduced before the CTD. Parties may be represented / advised by a lawyer, in which case they have to bear the costs thereof. If the plaintiffs income is below certain thresholds he can however obtain advice and assistance of a pro bono lawyer. H. AVERAGE DURATION OF THE PROCEDURE The average duration from the introduction of a claim until final award is one year.

court awards, after having obtained an exequatur before the ordinary courts (art. 1710 Code of Civil Procedure). The remedies available should be sufficient to solve cross-border consumerto-business disputes. The guarantee of 10 % of the sum claimed may deter consumers to introduce claims, especially claims for larges amounts of money. The fact that if damages are wrongly quantified (that is, quantified too high), part of the costs will have to be paid by a plaintiff even if his or her claim was founded, may deter consumers. Costs of procedures before ordinary courts are fixed, so that the variable costs of the procedure before the CTD will be higher or lower depending on the value of the claim. On the other hand, before the ordinary courts (except for very small claims) representation by a lawyer is often mandatory or necessary for practical reasons. If the plaintiffs income is below certain thresholds he can however obtain advice and assistance of a pro bono lawyer. Procedures before the ordinary courts (court of first instance; commercial courts, not judge of peace) will generally be longer (although this also depends on the arrears of the particular court which has to decide on the case and the willingness of the lawyers to comply with time limits).

B. Overall Assessment A. GENERAL B. ADVANTAGES This form of redress is very often used (most disputes between travel agents / tour operators and consumers are resolved by this procedure). The CTD is very specialised and the Board of Arbitrators is composed by representatives of both the travel sector and the consumer organisations. Therefore the procedure is considered fair and it generally leads to optimal, fair and impartial results. This procedure achieves acceptable, enforceable and lasting outcomes. C. DISADVANTAGES The 10% deposit may (especially when the amount of the claim is important) be an obstacle for consumers with limited resources - no deviation is possible. No appeal is possible (although this can also be considered an advantage to the extent that a final award is as a consequence thereof reached faster). D. OBSERVATIONS CONCERNING CROSSBORDER ISSUES This form of redress is accessible for everyone including residents of other countries which have executed a contract with a Belgian tour operator / travel agent in accordance with the general travel conditions set forth by the CTD. The consumer can choose a procedure in French or in Dutch.

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E. ANY OTHER OBSERVATIONS F. POPULARITY This form of redress is very often used (most disputes between travel agents / tour operators and consumers are solved by this procedure). The address of the CTD is mentioned in the arbitration clause in the general travel conditions, so that consumers can easily obtain all necessary information. When introducing geschillencommissie reizen or commission de litiges voyage in google, you immediately find a very good and easily accessible website, where consumers can very easily access all information needed (in French and in Dutch). Members of a consumer organisation can moreover obtain help from that organisation. Although the procedure may not be very well-known by the average consumer who has never been involved in a travel dispute, consumers will very easily get to know the procedure when a travel dispute arises. Barriers to use of the procedure can be considered low (except for what has been said under C above).

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VERZOENINGSCOMMISSIE BOUW / COMMISSION DE CONCILIATION CONSTRUCTION (RECONCILIATION COMMISSION CONSTRUCTION, RCC) IDENTIFICATION This is an out-of-court mediation scheme A. Detailed Description and Assessment of Specific Aspects

SUMMARY DESCRIPTION A. LEGAL BASIS There is no legal basis stricto senso for this procedure, except for the agreement of the parties with the regulations set forth by the RCC.

ASSESSMENT A real legal basis is not necessary, as the reconciliation either leads to an agreement between the parties which has the same legal force as any other agreement, or does not lead to an agreement. A change of the RCC regulations in order to comply with the new provisions on mediation recently introduced in the Code of Civil Procedure would, however, have many advantages (cfr. general overview).

B. COMPETENT AUTHORITY

The RCC is a non-judicial authority. It has a Dutch speaking and a French speaking chamber, each of which is composed on the basis of equal representation of members of the organisation members (i.e. representatives of consumers, of architects and of entrepreneurs). Each chamber is composed of two effective officials per organisation. A chamber however, has quorum when at least one official per organisation is present. When a dispute is submitted to the RCC, the RCC appoints an expert specialised in the item under discussion, who will act as mediator. Decisions are taken by a majority of two-thirds plus one of the votes. Independence and impartiality should be guaranteed by the way the RCC is composed and the way in which the decision as to the appointment of the expert-mediator is taken.

The RCC is only competent if the parties have agreed thereto in writing by way of a standard competence agreement. The regulations of the RCC state that once the dispute has been introduced by one of the parties before the RCC, all rights of all parties involved to bring the case before the ordinary courts are suspended until the procedure before the RCC has been terminated. The written agreement of the parties includes an agreement on this issue, so that, by mere agreement of the parties, this procedure has a preclusive effect over other procedures. The same applies with respect to crossborder disputes.

C. WHO CAN INITIATE THE PROCEDURE RULES OF STANDING

Each of the participants in the building process (the private person, the architect and the entrepreneurs who have executed the work) can initiate the procedure (to the extent they have previously agreed on the competence of the RCC in writing). There are no rules of standing specific for this procedure.

The procedure is easily accessible for all consumers, including the more vulnerable consumers. There are no rules on standing which may impede consumers from other Member States or countries from effectively using this form of redress, other than the possible language problem, as this procedure can only be held in Dutch or French. Only disputes concerning technical matters can be dealt with since the mediator is a technical (and not a legal)

D. TYPES OF DISPUTES

Disputes concerning construction works for private or mixed use by a private person (only concerning technical issues).

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expert. E. MAIN PROCEDURAL RULES This is a simple meditation procedure, it being understood that even if a conciliated agreement between the parties is not possible, the mediatorexperts opinion on the question whether there has been a technical fault is still binding on the parties (and can therefore be used in any ordinary in-court procedure introduced afterwards). The procedure is informal. It is oral to a certain degree, and was intended to limit formalities to those that are absolutely necessary. The start of the procedure can be requested orally or in writing, after which a form should be completed and filed with the RCC together with all relevant materials, which is than sent by registered mail to all parties involved. No time limits are fixed to bring a claim. Nothing is specifically provided for with respect to confidentiality. As the procedure only deals with disputes on technical matters, evidence is unrestricted. Application of procedural rules cannot be enforced. A party can only refuse to agree with a proposal for reconciliation. The binding opinion of the expert can only be contested before the ordinary courts on very limited grounds (e.g. rights of defence neglected, manifestly incorrect). There is no reflection period or other requirements regarding consumer consent. F. REMEDIES THAT CAN BE OBTAINED formal If parties come to reconciliation, this is put into an agreement which is binding on the parties and can be enforced against them in the same way as any other agreement. The experts opinion is binding on the parties and can be used against them also before the ordinary courts. The rules of this procedure are much more flexible, less formalistic and faster than ordinary in-court procedures. The expert-mediator is not a judicial body, but should be impartial and independent (chosen by representatives of each party in the building process). The fact that before the procedure can be started an agreement thereto should be signed, may be an impediment for the solution of disputes with business entities from other states. The procedure would be easily adaptable to allow communication with new communication technologies. If the parties have signed an agreement in this respect they can be obliged to participate in this procedure. Even if they cannot be obliged to agree with a reconciliation proposal, the experts opinion will in principle be binding on them. The procedure and the decision making process are very transparent. Rules on evidence are satisfactory, although parties cannot be forced to bring evidence.

All kinds of remedies are possible (in fact they will be tailor-made) to the extent that all parties agree. Remedies will usually consist of the repair of a default in the construction or the payment of damages. If no reconciliation is possible, the expert will write a binding opinion, including what he or she deems necessary to remedy the situation, although he or she cannot give a binding opinion on legal aspects, such as the division of responsibilities.

G. COSTS INVOLVED FOR THE PARTIES

The initial cost of the procedure is EUR 375, which will in principle be prepaid by the plaintiff, but afterwards equally born by the parties (unless it is manifestly without reason for a party to be involved in the procedure). This amount is increased to EUR 625 in the case that a so-called sapiteur (that is, a technical expert on a very specific area) is appointed to assist the expert-mediator. If after a first visit to the place and the preliminary opinion of the expert, no reconciliation could be reached, the expert makes an assessment of further costs he or she will have to make for his or her binding expert-advice (based on an hourly rate of EUR 75)., The procedure will be continued only if the parties

This procedure will in most cases be significantly cheaper than ordinary incourt procedures, which will in these kinds of procedures also involve the appointment of an expert, thus meaning that the costs should not deter consumers from initiating the proceedings.

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agree with the assessment. Parties can appoint a lawyer to represent them but this is in practice not often done. A pro bono lawyer can be requested if the party involved fulfils the necessary condition thereto. H. AVERAGE DURATION OF THE PROCEDURE The maximum duration of the procedure is 6 months. In practice the average duration is four weeks. Moreover, for urgent cases there is an urgency procedure. B. Overall Assessment A. GENERAL This form of redress is becoming increasingly popular. It is accessible for everyone, including the more vulnerable consumers. The procedure can be considered fair and, if a reconciliation is reached, leads to lasting results. B. ADVANTAGES The main advantages are that the procedure is very fast and efficient compared to in-court procedures (this is especially important in construction cases, as the construction will often not be continued pending the dispute), not very expensive, and should present ow barriers for consumers to using it. As the mediator is an ad hoc appointed technical expert, he or she has the necessary knowledge required for the specific case with which he or she has to deal. Furthermore, it is very important that, even if no reconciliation is reached, the experts opinion is still binding on the parties and can, as the case may be, be used in subsequent in-court proceedings, which may at that time save time and money. C. DISADVANTAGES D. OBSERVATIONS CONCERNING CROSSBORDER ISSUES E. ANY OTHER OBSERVATIONS F. POPULARITY Information about this procedure is easily accessible (e.g. very good website) and a lot of publicity has been made on big construction events. The procedure will not generally be known by consumers who have never been involved in a construction dispute. If a RCC reconciliation clause is not inserted in the contract and the entrepreneur or architect involved does not mention its existence, it is likely that the consumer will not know of the scheme. As this scheme is also to the advantage of entrepreneurs and architects (in terms of being faster and cheaper, and the quality of the experts opinion), more and more architects and entrepreneurs include a clause as to the competence of the RCC in their standard contracts. The barrier to consumers using this procedure can be considered low. This procedure has only been available since 2002. It has been promoted by the organisation members since, resulting in a rapidly increasing number of cases per year (+50% in 2004). Parties cannot be forced to agree on a reconciliation proposal. The procedure can only be held in French or in Dutch, which may be a problem for cross-border issues. This procedure is very fast compared to ordinary in-court proceedings.

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BEMIDDELINGSDIENST BANKEN-KREDIET-BELEGGINGEN / SERVICE DE MEDIATION BANQUES-CREDIT-PLACEMENTS (MEDIATION SERVICE BANK-CREDITS-INVESTMENTS MBCI) IDENTIFICATION This is an out-of-court mediation scheme (member of FIN-NET) A. Detailed Description and Assessment of Specific Aspects

SUMMARY DESCRIPTION A. LEGAL BASIS There is no legal basis stricto senso for this procedure, except for the agreement of the parties with the regulations set forth by the MBCI.

ASSESSMENT A real legal basis is not necessary, as the reconciliation either leads to an agreement between the parties which has the same legal force as any other agreement, or does not lead to an agreement. A change of the MBCI regulations in order to comply with the new provisions on mediation recently introduced in the Code of Civil Procedure would, however, have many advantages (cfr. general overview).

B. COMPETENT AUTHORITY

The MBCI is a non-judicial authority, with two levels. The first level is the Mediation Service, composed of an ombudsman and a permanent representative of consumer interests. The ombudsman provides an opinion or refers the case to the second level, the Mediation Board. If he or she gives an opinion with which the representative of consumer interests does not agree, the case is also referred to the Mediation Board. The Mediation Board is composed of three experts appointed by the consumer organisations and three experts appointed by the financial sector (Febelfin). The supporting committee (a committee composed of representatives of the financial sector, representatives of consumer organisations and representatives of the government) appoints the president. Independence and impartiality should be guaranteed by the way the MBCI is composed.

Only consumers can apply for the services of the Mediation Service. The financial institutions that are members of a professional organisation-member of the Mediation Service will then be obliged to participate. The procedure does not have a preclusive effect over other procedures in the sense that there is no rule preventing the consumer from starting another kind of procedure while the mediation is still running. Cross-border disputes with financial institutions of other countries can in principle not be solved by the MBCI, since it only deals with disputes with financial institutions that are members of a professional organisation member of MBCI. In the context of FIN-NET, consumers can, in the case of crossborder disputes with insurance companies of one of the countries who are party to this network, contact the MBCI, who will then contact its correspondent in the relevant country. If the organisation contacted is competent in its jurisdiction, it will issue an opinion, which the Belgian MBCI will than translate into the language of the plaintiff. The procedure is probably not easily accessible, especially for the more vulnerable consumers as (i) it is probably not very widely known; and (ii) the

C. WHO CAN INITIATE THE PROCEDURE RULES OF STANDING

Only consumers can initiate the procedure. There are no rules of standing specific for this procedure. The general rules of standing apply.

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procedure is fully in writing, which makes it more difficult for vulnerable consumers to make their case clear. D. TYPES OF DISPUTES Disputes between consumers and financial institutions concerning their private banking affairs and financial transactions. The MBCI does not deal with complaints concerning the commercial policy of the financial institution. E. MAIN PROCEDURAL RULES This is a mere meditation procedure. The opinion of the MBCI is, moreover, not binding. The procedure is purely in writing. The start of the procedure can be requested only after the consumer has asked its financial institution in writing for a solution, and this has not resulted in a satisfactory solution. The procedure is initiated by a request in writing to the MBCI. The parties can present their arguments in writing but cannot (in principle) present their arguments orally to the MBCI. The ombudsman either provides an opinion or refers the case to the Mediation Board (in practice this will be so for difficult cases, cases involving large amounts of money, or cases involving a decision on principle which may gain precedent value). In the case that he or she gives an opinion, the Representative of the consumers interests will review it. If he or she agrees, then the opinion becomes final; if he or she does not agree, the case will be referred to the Mediation Board. If the case is referred to the Mediation Board, the parties get the opportunity to present further arguments to the Board. The Mediation Board has the same competence as the Mediation Service (it is not an appeal procedure). Arguments of the parties will be forwarded to the other party, so as to give an opportunity to answer. In the case that a party deems its arguments confidential and provides reasoned arguments for this, a deviation of this principle is possible. Advice is in most cases reached by consensus, but if this is not possible, it will be decided by majority vote. The presidents vote is decisive if the case may be. After the opinion has been sent to the parties, they have to reply within 15 days stating whether they accept the opinion. The financial institutions acknowledge that the acceptance of the opinion should be the general rule on their part. The rules of the MBCI state that the members of the Mediation Service and of the Mediation Board have to take the appropriate measure to guarantee The rules of this procedure are much more flexible and less formalistic than ordinary in-court procedures. On the other hand there is in principle no opportunity for consumers to present their case orally. The MBCI is not a judicial body, but should be impartial and independent as a consequence of the way in which it is composed. The procedure would be easily adaptable to allow communication with new communication technologies. Financial institutions that are members of the organisation members of the MBCI can be obliged to participate in this procedure. The procedure and the decision making process are transparent, although the fact that confidential information does not have to be communicated to the other party may lead to inequality, especially since it will usually be the financial institution who claims that information is confidential. Rules on evidence are satisfactory, although parties cannot be forced to bring evidence.

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confidentiality. No time limits are fixed to bring a claim. Nothing is specifically provided for with respect to evidence. Application of procedural rules cannot be enforced. A party can only refuse to agree with the opinion provided. F. REMEDIES THAT CAN BE OBTAINED All kind of remedies are possible (and will be tailormade) to the extent all parties agree. If parties come to reconciliation, this is put into an agreement which is binding on them and can be enforced against them in the same way as any other agreement. This procedure is free, so that the costs should not deter consumers from initiating the proceedings.

G. COSTS INVOLVED FOR THE PARTIES

For the consumer, the procedure is free. Consumers can choose to be assisted by a lawyer, the costs of which they will have to bear. If a consumer fulfils the relevant conditions, however, he or she can ask for the assistance of a pro bono lawyer. The average duration of the procedure is three months. B. Overall Assessment

H. AVERAGE DURATION OF THE PROCEDURE

This procedure is very fast compared to ordinary in-court proceedings.

A. GENERAL

This form of redress is very popular. It may however be less accessible for more vulnerable consumers, as the procedure is probably not well known to them and is, moreover, wholly in writing. The procedure can be considered fair and, if a reconciliation is reached, leads to lasting results.

B. ADVANTAGES

The main advantages are that the procedure is fast and efficient compared to in-court procedures, free of costs for the consumer, and should present a low barrier to consumers using it. Moreover the MBCI is very specialised and should therefore provide fair opinions. Equality of weapons and right of defence is not always guaranteed (if a party presents documents that it considers confidential and provides arguments accordingly, these will not be communicated to the other party). The MBCIs opinion is not binding on the parties.

C. DISADVANTAGES

D. OBSERVATIONS CONCERNING CROSSBORDER ISSUES E. ANY OTHER OBSERVATIONS F. POPULARITY

The procedure can only be held in French or in Dutch, which may be a problem for cross-border issues.

Information about this procedure is easily accessible (e.g. good website). The procedure will not generally be known to consumers who have never been involved in a dispute with their financial institution. The barrier for consumers to make use of this procedure can be considered low.

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OMBUDSMAN DER VERZEKERINGEN / OMBUDSMAN DES ASSURANCES (INSURANCE OMBUDSMAN) IDENTIFICATION This is an out-of-court mediation scheme (ombudsman in the private sector) (Member of FIN-NET) A. Detailed Description and Assessment of Specific Aspects

SUMMARY DESCRIPTION A. LEGAL BASIS There is no legal basis stricto senso, only the regulations set forth by the Ombudsman.

EVALUATION A real legal basis is not necessary, as the reconciliation either leads to an agreement between the parties which has the same legal force as any other agreement or does not lead to an agreement. Only consumers can apply for the services of the Ombudsman. Insurance companies then have to participate. The procedure does not have a preclusive effect over other procedures in the sense that there is no rule preventing the consumer from starting another kind of procedure while the mediation is still running. In the context of FIN-NET, consumers can also contact this Ombudsman in relation to cross-border disputes with insurance companies of one of the countries who are party to this network, and the Ombudsman will then contact his or her correspondent in the relevant country. If that organisation has the appropriate jurisdiction, he or she will issue an opinion, which the Belgian Ombudsman will then translate into the language of the plaintiff.

B. COMPETENT AUTHORITY

The Ombudsman is a non-judicial authority. The procedural rules of the ombudsman contain only one provision concerning his appointment, that is that he is appointed in accordance with the principles of the 98/257/EC Commission Recommendation of 30 March 1998 on the principles applicable to the bodies responsible for out-of-court settlement of consumer disputes.

C. WHO CAN INITIATE THE PROCEDURE RULES OF STANDING

Only consumers can initiate the procedure. There are no specific rules of standing for this procedure. The general rules of standing apply.

In the context of FIN-NET, consumers can contact the Ombudsman in relation to cross-border disputes with insurance companies of one of the countries party to this network, and the Ombudsman will then contact his or her correspondent in the relevant country. If the organisation contacted has the appropriate jurisdiction, it will issue an opinion, which the Belgian Ombudsman will than translate into the language of the plaintiff.

D. TYPES OF DISPUTES

Complaints of consumers in relation to the services of insurers, insurance intermediaries and Datassur (an economic interest grouping inter alia directing databanks of data received from insurance companies). This is a mere meditation procedure. The opinion of the The procedural rules are very limited, which may lead to flexibility but also to

E. MAIN PROCEDURAL

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RULES

Ombudsman is not binding. The procedure is quite informal. The introduction of the procedure (filing of the complaint) should however be in writing. The rules regulating the procedure before the Ombudsman only state further that the Ombudsman should give a reasoned opinion as soon as possible, and at the latest within six months, after consultation of the file with the cooperation of the parties. No time limits are fixed for bringing a claim. Nothing is specifically provided for with respect to evidence. Application of procedural rules cannot be enforced. A party can only refuse to agree with the opinion. It is explicitly stated in the rules that the Ombudsman should fulfil his or her tasks independently and that he or she is bound by professional secrecy. To the maximum extent possible, work must be carried out on the basis of laws, regulations, insurance policy conditions and rules of conduct of the insurance companies and insurance intermediaries. He should moreover always take into account the principle of fairness and strive to reach reasonable settlements.

legal uncertainty. There are no guarantees that the parties can respond on all arguments of the other party (problem of equality of weapons, rights of defence). The Ombudsman is not a judicial body, but has to be impartial and independent according to the rules of the statute. It seems that communication with new communication technologies is already allowed to a high degree.

F. REMEDIES THAT CAN BE OBTAINED

The ombudsman can propose all kinds of (tailor-made) remedies.

If parties come to reconciliation, this is put into an agreement which is binding on the parties and can be enforced against them in the same way as any other agreement. This procedure if free, so that costs should not deter consumers to initiate the proceedings.

G. COSTS INVOLVED FOR THE PARTIES

For the consumer the procedure is free. Consumers can choose to be assisted by a lawyer, for which they will have to bear the costs. If conditions are fulfilled, however, the assistance of a pro bono lawyer can be sought. The average duration of the procedure is three months.

H. AVERAGE DURATION OF THE PROCEDURE

The duration of the procedure is very short compared to ordinary in-court proceedings.

B. Overall Assessment A. GENERAL This form of redress is very popular (the ombudsman handles +/- 1200 complaints a year). It may however be less accessible for more vulnerable consumers, as the procedure is probably not well known by them and is, moreover, wholly in writing. The procedure can be considered fair and, if a reconciliation is reached, leads to lasting results. B. ADVANTAGES The main advantages are that the procedure is fast and efficient compared to in-court procedures, free of costs for consumers, and has low barriers to consumers using it. Moreover the Ombudsman is very specialised and should therefore reach fair conclusions. Procedural rules as available on the website are very limited, which may lead to legal uncertainty as to how the procedure is conducted. The Ombudsmans opinion is not binding on the parties. D. OBSERVATIONS CONCERNING CROSSThe procedure can only be held in French or in Dutch, which may be a problem for cross-border

C. DISADVANTAGES

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BORDER ISSUES E. ANY OTHER OBSERVATIONS F. POPULARITY

issues.

Information about this procedure is easily accessible (e.g. website). The procedure will not generally be known by consumers who have never been involved in a dispute in this area. The barrier to consumers making use of this procedure can be considered low.

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2.2

ALTERNATIVE JUDICIAL PROCEDURES FOR CONSUMER REDRESS

VREDERECHTER / JUGE DE PAIX (JUDGE OF THE PEACE) IDENTIFICATION Small claims court A. Detailed Description and Assessment of Specific Aspects

SUMMARY DESCRIPTION A. LEGAL BASIS Code of Judicial Procedure

ASSESSMENT The legal basis is clear and sufficient and does not conflict with other provisions of law. To our knowledge there are no existing or pending cases about a possible lack of legal basis.

B. COMPETENT AUTHORITY

The Judge of the Peace is nominated by the King. Persons with 12 years experience in a legal profession and who have succeeded in a state examination, can be nominated. Lawyers with 20 years experience (of which at least 15 are at the bar) are exempted from the examination.

The Judge of the Peace has exclusive judicial competence over a number of matters, including consumer credit, irrespective the amount of the claim involved. He further has competence over claims of less than EUR 1.860.. In the case that parties have agreed on an arbitration clause and the defendant argues the incompetence of the Judge of the Peace on this basis, ,the Judge of the Peace will refer the case to the relevant arbitrator(s) before hearing any other argument. With respect to cross-border issues the Judge of the Peace will be competent on the basis of the relevant IPR-rules.

C. WHO CAN INITIATE THE PROCEDURE RULES OF STANDING

The interested parties can initiate the procedure. The ordinary rules of standing (art. 17-18 Code of Civil Procedure) are applicable: the plaintiff should have the necessary quality and an actual and direct interest to introduce the claim.

The procedure is easily accessible for all consumers including more vulnerable consumers. There are no rules of standing impeding consumers of other Member States or countries from effectively using this form of redress.

D. TYPES OF DISPUTES

All claims below EUR 1.860, with certain exceptions, and a list of specific claims irrespective of the amount of the claim, including disputes with respect to consumer credit. The procedure is more informal than ordinary in-court procedures. Disputes can be solved during the first session in oral debates. For more complex procedures the Judge of the Peace can order time limits for the parties to issue written pleadings, after which oral debates will be held. Reform in relation to the use of new technologies in the The rules are mainly equivalent to ordinary judicial procedures, except that it is somewhat less formalistic and that in principle no appeal is possible for very small claims (below EUR 1.240) The procedural rules in principle ensure the right of access to an independent and

E. MAIN PROCEDURAL RULES

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civil procedure has been announced, but for the moment new communication technologies cannot be used. The most common way to introduce the proceedings is by writ of summons (dagvaarding / citation). In certain circumstances a less formal introduction by petition (verzoekschrift / requte") is possible. For small claims in general a petition is only possible in the case of an action for payment of an indisputable debt (i.e. a debt proven by a document of the debtor). Consumers can also use a petition to ask for payment facilities of their consumer credit. Lawyers sometimes agree on voluntary appearance (vrijwillige verschijning / comparution volontaire") as a way to introduce proceedings. Time limits to bringing a claim are regulated by civil law rules on prescription. Parties have the opportunity to submit briefs and pieces of evidence before the oral pleadings. They may, but do not have to be, represented by a lawyer. All evidence is allowable to prove facts. Legal acts (such as the existence of an agreement) in principle have to be proven in writing in civil cases. Procedural rules are enforced by the fact that briefs which have been submitted too late are not taken into consideration; writs of summons or briefs not complying with certain formal requirements are null and void. No appeal is possible for claims below EUR 1.240 against judgments of the Judge of the Peace. Annulment by the Belgian Supreme Court is however always possible, amongst other things in the case of breach of procedural rules. F. REMEDIES THAT CAN BE OBTAINED The Judge of the Peace can allow all legally available remedies, including material and moral damages. The Belgian legal system however does not recognise the concept of consequential damages. The losing party has to pay the procedural costs. Besides some general costs, the losing party has to pay a fixed sum to another party who is represented by a lawyer ("rechtplegingsvergoeding / indemnit de procedure"). The sum varies according to the claim's value and is tied to an index. Currently it can go from EUR 60,73 up to EUR 364,40. For small claims it will however never exceed EUR 182,20. It is meant as compensation for certain acts performed by the lawyer, but is paid to the party, not the lawyer. Parties may, but do not have to be, represented by a lawyer. A party fulfilling certain income conditions can obtain free legal assistance. H. AVERAGE DURATION OF THE PROCEDURE

impartial judicial body. Moreover, a procedure exists for replacement of the judge in cases of justified doubt in relation to the impartiality or independence of the judge involved. The procedure would be easily adaptable to allow communication with new communication technologies. One of the first test cases on this point will in fact be heard in some of these courts. Parties get a copy of all documents / evidence submitted by the other parties. There is however no rule in Belgium that obliges parties to disclose all available evidence (including evidence damaging for the party involved). The judge can order a party to disclose certain evidence. Only evidence which has been obtained in an illegal manner cannot be used.

The remedies usually lead to enforceable and lasting outcomes. The same remedies as in ordinary incourt procedures are available. Costs involved for the parties can be considered low, especially since parties are not obliged to be represented by a lawyer. The latter rule may however turn out to be to the detriment of the more vulnerable consumers, who will probably not often be represented and therefore may be in an unequal position in proceedings against parties with a lawyer.

G. COSTS INVOLVED FOR THE PARTIES

The duration of this procedure is generally shorter than ordinary in-court proceedings.

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B. Overall Assessment A. GENERAL This procedure works quite well, as there is in many regards a very low barrier to introducing a claim before the judge of the peace (lower cost, closer to the people, more informal than ordinary in-court proceedings). For small consumer claims, it will in most cases however still not be worth initiating proceedings. B. ADVANTAGES - Low costs - Close to the people as it exists in each kanton / canton, i.e. several judges of the peace in different locations in the bigger cities. - More informal (e.g. no obligation for a lawyer) C. DISADVANTAGES The fact that legal representation is not obligatory may turn out to be to the detriment of the more vulnerable consumers, who will probably not often be represented and therefore will be in an unequal position in proceedings against parties with a lawyer.

D. OBSERVATIONS CONCERNING CROSSBORDER ISSUES E. ANY OTHER OBSERVATIONS F. POPULARITY The existence of the proceedings before the judge of the peace is very widespread and generally known. Consumers may however not be aware of the specific fact that they can bring most small consumer claims as well all consumer credit claims before the judge of the peace. The procedure is very often used, but mostly by professionals, against other professionals and consumers, and by individuals against other individuals. There is no data available on the question of the extent to which this procedure is actually used for the resolution of consumer-to-business disputes, moreover only a fraction of the judgments are published and there is no central repository of all judgments. It is therefore almost impossible to make an assessment as to the extent to which this procedure is actually used for the resolution of consumer-to-business disputes. Our intuition is however that this procedure is not often used for consumer-to-business disputes.

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COLLECTIVE CONSUMER REDRESS PROCEDURES / MECHANISMS

VORDERING TOT STAKING / ACTION EN CESSATION (REQUEST FOR CEASE AND DESIST ORDER) IDENTIFICATION This is a form of in-court collective consumer redress (action for injunction) A. Detailed Description and Assessment of Specific Aspects

SUMMARY DESCRIPTION A. LEGAL BASIS Article 95 of the Law on Trade Practices and the Information and Protection of the Consumer of 14 July 1991.

ASSESSMENT The legal basis is clear and sufficient and does not conflict with other provisions of law. To our knowledge there are no existing or pending cases concerning lack of legal basis.

B. COMPETENT AUTHORITY

The competent authority is the President of the Commercial Court, appointed by the King. Persons with 12 years experience in a legal profession and who have succeeded in a state examination, can be nominated. Lawyers with 20 years experience (of which at least 15 at the bar) are exempted from the examination.

To the extent that a consumer would introduce a request for a cease and desist order, and at the same time introduce an action for damages before the commercial court, it is possible that the president of the commercial court who judges on the request for a cease and desist order will thereinafter also be president of the college of judges of the commercial court. This procedure has a very specific aim and does not therefore preclude other actions concerning the same facts, such as a claim for damages, being introduced simultaneously. Competence in cross-border disputes is determined in accordance with the E.E.X.Regulation and the E.V.E.X.

C. WHO CAN INITIATE THE PROCEDURE RULES OF STANDING

The procedure can be introduced by interested parties having a personal and direct interest (that is, consumers and traders), the Minister of Economic Affairs, professional and inter-professional organisations and consumer organisations. There are no specific rules of standing.

All relevant parties are allowed to initiate the procedure. The procedure can be considered easily accessible for all consumers, including vulnerable consumers. The rules on standing are the same as for ordinary in-court proceedings, except for the fact that professional organisations, inter-professional organisations and consumer organisations may act in the general interest, which is not generally possible in ordinary in-court proceedings. Only requests for cease and desist orders can be introduced. Actions for damages should be introduced before the ordinary courts. For this reason individual consumers will often not obtain much personal advantage from the procedure,

D. TYPES OF DISPUTES

Actions for a cease and desist order can be brought and are in practice brought against violations of the Trade Practices Act (rules on advertising, commercial practices, fair competition, consumer information) as well as against violations of any other legal provision in the course of a business (these violations being

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qualified as acts of unfair competition within the meaning of the Trade Practices Act). Unlawful imitations of goods falling within the scope of the laws on intellectual property cannot be the subject of an action for cease and desist order.

and prefer to start an ordinary in court procedure for damages. The reason for the exclusion of unlawful imitations of goods falling within the scope of the laws on intellectual property, is the fact that (i) the president of the court of first instance has exclusive jurisdiction in relation to disputes both concerning patents and concerning the law on copyrights of 30 June 1994; and that (ii) in relation to models and drawings, a specific procedure exists under the law on Benelux Drawings and Models; the Benelux Court of Justice has explicitly ruled that therefore the common law procedures available under laws on trade practices cannot be used for these purposes. The procedural rules are the same as for ordinary summary proceedings, mainly meaning that they allow for a much faster procedure than ordinary in-court proceedings. The procedure would be quite easily adapted to allow for communication by new communication technologies. Parties receive copies of all documents / evidence submitted by the other parties. There is however no rule in Belgium that obliges parties to disclose all available evidence, including evidence damaging for the party involved. The judge can order a party to disclose certain evidence. The only inadmissible evidence is that which has been obtained in an illegal manner.

E. MAIN PROCEDURAL RULES

The claim is introduced and dealt with in accordance with the rules applicable to summary proceedings. The claim is introduced by writ of summons or by petition in accordance with the delays applicable to summary proceedings (introduction at least two days after the writ of summons / petition, or within a shorter delay in extremely urgent circumstances). There are no specific time limits for bringing a claim, but a claim will become without object once the action / omission which is the object of the request for the cease and desist order, has stopped. As in summary proceedings the judge may grant, and in practice most of the time does grant, parties the opportunity to submit briefs, before the oral pleadings. A reform of the use of new technologies in the civil procedure has been announced, but for the moment new communication technologies cannot be used. All kinds of evidence are allowed. In general the proceedings are public. The judge may moreover order that the judgment should be published, to the extent he or she considers this to be an efficient means for causing the action / omission to cease. Contrary to summary proceedings, the decision taken is not provisional, but deals with the merits of the case. Appeal is possible before the President of the Court of Appeal for both revision of the content of the decision or breach of procedural rules. The decision of the President of the Court of Appeal can further be appealed to the Belgian Supreme Court (Hof van Cassatie / Cour de Cassation) for, inter alia, breach of procedural rules. The decision is binding on the ordinary courts. This means that if a party, after having introduced a request for a cease and desist order, also introduces ordinary proceedings to claim damages suffered as a consequence of the same alleged violation of the law,

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the ordinary court cannot reconsider the existence of a violation of the law which has already been established in the context of the request for the cease and desist order. It can only rule on the existence of damages to the extent the president of the commercial court has not done so yet in the context of the request for the cease and desist order, and the amount of the damages. Contrary to the general rule le criminal tient le civil en tat, le commercial tient le criminal en tat is the rule applicable to the request for a cease and desist order, meaning that any criminal proceedings which would have been introduced concerning the same facts should be suspended until the outcome of the request for the cease and desist order is clear. F. REMEDIES THAT CAN BE OBTAINED The president of the court of commerce can: Order that the action / omission should cease (this order may take the form of an injunction to do something in order for the action / omission to cease; this order may also include a prohibition on the trader entering into contracts with third parties); Grant a delay to the trader who is violating the law to end the violation; Order the publication of the judgment; Order a periodic penalty payment (astreinte / dwangsom) in order to ensure the execution of the judgment (e.g. an amount per day that the judgment is violated). The remedies will not in all cases be sufficient to remedy the underlying dispute, as the president of the commercial court cannot order payment of damages. The procedure is however not intended to resolve disputes in full. The focus on the cease and desist order as main remedy allows the combination of a fast procedure and a decision on the substance of the dispute, a combination which would probably be impossible if damages would have to be quantified. The judgments lead to enforceable and lasting outcomes.

He or she cannot order payment of damages. G. COSTS INVOLVED FOR THE PARTIES The losing party has to pay the procedural costs. Besides some general costs, the losing party has to pay a fixed sum to the other party if represented by a lawyer ("rechtplegingsvergoeding / indemnit de procedure"). The sum varies according to the claim's value and is tied to an index. Currently it can vary from EUR 60,73 to EUR 364,40. Parties have to be represented by a lawyer. A party fulfilling certain income conditions can obtain free legal assistance. H. AVERAGE DURATION OF THE PROCEDURE 7 to 8 months. B. Overall Assessment A. GENERAL The process is considered fair and leads to optimal, fair and impartial results, achieving acceptable, enforceable and lasting outcomes. Individual consumers will probably use ordinary in-court proceedings, or, for small claims, the procedure before the judge of the peace more often, because the range of remedies they can obtain before these courts is much broader and probably more apt to their needs. B. ADVANTAGES The main advantages of the procedure are: 1. The fact that, by derogation to the normal rules on standing in Belgian courts, this procedure grants certain parties, like consumer organizations, professional organizations and the Minister of Economic Affairs the possibility of bringing an action in the interest of As such the costs of the procedure are not extremely high; only the lawyers fees may involve high costs. Since damages cannot be obtained through this procedure, individual consumers may nevertheless feel that the costs involved are not worth the possible result that can be obtained.

The procedure is fast compared to ordinary in-court procedures.

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2. 3. 4.

5.
C. DISADVANTAGES

their members or the general interest (in the case of the Minister) without having to show that one or more private individuals have suffered or are likely to suffer a prejudice. It is a fast procedure leading to efficient measures against violations of consumer law. Judgments can subject to certain conditions have a preventive effect on future violations. The judgment is provisionally enforceable. There are good mechanisms to ensure that the judgment is complied with or can be enforced (I.e. by the imposition of a periodic penalty payment). The president of the commercial court can in this kind of proceedings not pronounce remedies such as the annulment of an agreement or a clause or the order to pay damages, so that for individual consumers this action may not be very helpful. The consumer introducing the claim should have a personal and direct interest, which is not always evident (e.g.: a consumer who has been misled by publicity will not have an interest to request a cease and desist order against such publicity, because at that moment he or she will no longer be personally misled and therefore will no longer have a personal and direct interest to request a cease and desist order). Although this procedure is an important weapon for consumer organisations, they do not use this procedure very often, probably because of lack of resources.

The main disadvantages of the procedure are: 1.

2.

3.
D. OBSERVATIONS CONCERNING CROSSBORDER ISSUES E. ANY OTHER OBSERVATIONS F. POPULARITY

Directive 98/27/EC, as implemented in Belgian law by the Law of 26 May 2002 (Belgian Official Gazette of 10 July 2002), allowing consumer organisations of other member states to introduce claims before the president of the Commercial Court, has a great importance.

Information about this procedure is very well known by consumer organisations, but much less so by individual consumers. Although barriers for individual consumers to introduce a procedure can be considered low, because of the reasons mentioned under C above, the procedure is not very popular amongst individual consumers.

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NATIONAL REPORTS 15 NOVEMBER 2006

3. Bibliography of relevant literature

A.

BIBLIOGRAPHY ON ALTERNATIVE MEANS OF CONSUMER REDRESS IN GENERAL H. DE CONINCK, Buitengerechtelijke beslechting van geschillen in consumentenzaken, in I. DEMUYCNK e.a., De Consument in het Recht, Verwend, Verwaand of Miskend, Maklu, Antwerpen, 2003, 250-261.

B.

BIBLIOGRAPHY ON SPECIFIC ALTERNATIVE MEANS OF CONSUMER REDRESS a. Out-of-Court Mechanisms a.1. Commission for Travel Disputes A. MORIAU, Alternatieve Klachtenbehandeling in de reissector, in B. Tilleman, e.a., Een reis door het recht, reisrecht anders bekeken, De Boeck & Larcier NV, Brussel, 2005, afl 1., 119-140; P. DE VROEDE, Voor de oplossing van een reisgeschil: de Geschillencommissie Reizen of het gemeenrecht?, D.C.C.R. 2003, afl. 61, 3236; T. VAN DYCK, J. GEUENS and C. SUSTRONCK, De Nederlandstalige uitspraken van de Geschillencommissie Reizen 1996-2001 (Overzicht van Rechtspraak), DCCR, 2002, 1-140. a.2. New provisions on Mediation in Code of Civil Procedure B. ALLEMEERSCH, B. GAYSE and P. SCHOLLEN, De wet van 21 februari 2005 in verband met de bemiddeling, in X., De nieuwe wet op de Bemiddeling, Die Keure, Brugge, 2005; B. GAYSE, Een veralgemeende wettelijke grondslag, NJW, 2005, 434-449. b. Alternative In-Court Mechanisms M. DAMBRE, De Procedure voor de Vrederechter in het kader van het Consumentenkrediet, in X, Het Handels- en Economisch Recht Geactualiseerd, Die Keure, Brugge, 1998; J. LAENENS, De consument als procespartij, enkele kanttekeningen, Liber Amicorum Paul De Vroede, Kluwer, Diegem, 1994, 985-991; M. STORME en B. DEMEULENAERE, Het testproject in het vredegerecht te Deinze Een rechtstoegangsexperiment, R.W. 1988-1989, 65-78; E. BALATE, Une procdure simplifie pour les problmes de consommation: une exprience-pilote Marchienne-au-Pont, T.B.H. 1985, 446-457.

c.

Means of Collective Redress 1. Protection of collective consumer interests 1.1 Request for Cease and Desist Order

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NATIONAL REPORTS 15 NOVEMBER 2006

J. STUYCK, Beginselen van Belgisch privaatrecht, Dl. XVII, Handels- en economisch recht. 2: Mededingingsrecht. A: Handelspraktijken, Gent, StoryScientia, 2004. P. DE VROEDE, Handelspraktijken: de doeltreffendheid van het stakingsbevel, T.P.R. 2004, afl. 1, 213-241.

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NATIONAL REPORTS 15 NOVEMBER 2006

4. Statistics

A.

STATISTICS ON ALTERNATIVE MEANS OF CONSUMER REDRESS IN GENERAL Not available

B.

STATISTICS ON SPECIFIC ALTERNATIVE MEANS OF CONSUMER REDRESS a. Out-of-Court Mechanisms a.1. CTD:

Annual report 2005: http://mineco.fgov.be/protection_consumer/disputes/voyages/annual_report_200 5_nl.pdf

a.2. Commission for disputes concerning furniture

Annual Report 2004 (see pdf-file attached)

a.3. Reconciliation Commission Construction

Annual Report 2005: http://www.seetool.be/media/pdf/6759_pdffield01.pdf

a.4. Reconciliation Commission Banks Credit Investments

Annual Report 2004 - 2005: http://www.ombfin.be/Downloads/dw-omb-jv05-nl.pdf

a.5. Ombudsman of the Insurance Sector

Annual Report 2005: http://www.ombudsman.as/pdf/nl/Rapport_Ombudsman_2005.pdf

b.

Alternative In-Court Mechanisms Not available

c.

Means of Collective Redress 1. Protection of a series of individual interests Not applicable 2. Protection of collective consumer interests Not available

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