Abstract
The purpose of the following paper is to address the relevance of consumer arbitration as an effective procedural justice mechanism within the EU internal market. Thus, the article focuses on the possibility of introducing a mandatory consumer arbitration system in Spain that allows consumers to exercise their rights recognized by the rules in a fast, efficient and free way.
For this purpose, the Portuguese consumer arbitration system and its evolution up to the establishment of a mandatory arbitration procedure for consumer disputes below a certain amount is also analysed.
Keywords
Introduction
Full and effective consumer protection requires procedural rules that allow the consumer to exercise, in an agile manner and without excessive costs, the substantive rights that are recognized by law.
In the Communication from the European Commission, COM (2020) 696 final, concerning the ‘New Consumer Agenda’, the Commission raises the need to reinforce and modernize existing alternative dispute resolution and online dispute resolution tools. Thanks to alternative dispute resolution and online dispute resolution, consumers have access to simple, fast and fair procedures to settle their domestic and cross-border disputes with traders without having to go to court. One of the Commission's main goals is that consumers should be able to find and quickly use these tools to resolve disputes.
We can therefore state that recognizing a catalogue of consumer rights (that is, adequate protection from the substantive standpoint) is not sufficient. It is essential to establish suitable channels so that consumers can enforce the rights they are recognized to have.
The statistics published by the General Council of the Spanish Judiciary (2020) show a notable increase in litigation, which has led to an increase in pendency rates and backlogs in the settlement of litigation, in spite of the increase in the resolution rate. Furthermore, the average duration of a proceeding in the courts of first instance in Catalonia is 7 months in 2020. 1
In the following sections we examine the potential of alternative dispute resolution systems and, in particular, consumer arbitration, as an effective mechanism for the protection of consumer rights. 2 It is not sufficient to recognize a catalogue of consumer rights. Rather, it is essential that suitable channels be established for consumers to be able to enforce the rights recognized to them. The possibility of establishing a mandatory consumer arbitration system in Spain is based on the need to provide consumers with a quick, simple and free mechanism that will allow them to exercise their rights, without the need to take the matter to court.
Protection of the weaker party to the contract: substantive and procedural justice
An adequate consumer protection in the digital environment has now become indispensable for the development of the internal market. 3 Article 114 TFEU serves as the legal basis for the harmonization measures intended to establish this market. In turn, Article 169 TFEU provides the basis for a whole series of measures in the field of consumer protection. With regard to the latter, and in accordance with its competence in this area, the EU has adopted Directives such as Council Directive (EU) 93/13/EEC of 5 April 1993, on unfair terms in consumer contracts, and Directive (EU) 2011/83 of the European Parliament and of the Council of 25 October 2011, on consumer rights.
The substantive rules recognized in the aforementioned laws must be accompanied by an efficient system to make them effective. If this is not the case, the many regulations to protect consumers are meaningless as they would remain a mere theoretical framework, without practical significance, thus failing the EU's objective of guaranteeing a high level of consumer protection within the European single market. 4
For all these reasons, together with the substantive body of consumer protection legislation, the EU has developed a set of legislative and non-legislative instruments intended precisely to improve the effectiveness of the system for protecting consumer rights in the Member States. Thus, alternative dispute resolution in consumer matters is an essential instrument. 5 It goes without saying that the laws may recognize a wide range of consumer rights, but the efficiency of protection depends on the existence of simple, fast and free means for consumers to enforce their rights when they have not been adequately respected. 6 The advantages of arbitration as an instrument to relieve the courts are also self-evident.
Alternative dispute resolution and effective consumer protection
The consumer arbitration system is based on one of the guiding principles of social and economic policy laid down in the Spanish Constitution, specifically in Article 51.1, which provides that the public authorities shall guarantee the defence of consumers and users, protecting, by means of effective procedures, safety, health and legitimate economic interests. This principle has been included in successive consumer protection rules (for example, see Articles 57 and 58 of the Spanish consumer protection law, Texto Refundido de la Ley General para la Defensa de los Consumidores y Usuarios, abbreviated as the TRLGDCU) and the procedure is regulated by Royal Decree 231/2008, of 15 February, regulating the consumer arbitration system.
Directive (EU) 2013/11/EU of the European Parliament and of the Council of 21 May 2013 on alternative dispute resolution for consumer disputes (hereinafter the ADR Directive) obliges Member States to ensure that consumers have the option to resolve their disputes via ADR bodies. On the basis of a minimum harmonization approach, the Directive pursues the creation of a European network of high-quality consumer dispute resolution bodies. Law 7/2017, of 2 November, transposes Directive 2013/11/EU into Spanish law and guarantees consumers the possibility to resolve their disputes via alternative dispute resolution bodies that provide independent, impartial, transparent, effective, fast and fair alternative or out-of-court consumer dispute resolution procedures. It should be underscored that traders have an obligation to inform consumers of the option to use the accredited body to which the belong (Article 40) and the serious infringement that such non-performance represents (Article 41). 7
In conjunction with the Directive, the EU adopted EU Regulation No 524/2013 on online dispute resolution for consumer disputes, which builds on the infrastructure of quality certified bodies created under the Directive and applies to consumer disputes in relation to purchases made online. 8 The Regulation set out to create an online dispute resolution platform which was launched in February 2016. 9 In spite of this, the doctrine has confirmed that despite the provisions of Article 14 of the aforementioned Regulation, which includes an obligation for traders concluding online sales or service contracts to clearly inform the consumer of the existence of the online dispute resolution platform, this information is not always easily accessible. 10 To remedy this shortcoming, it has been proposed to create a logo to be made visible by the trader on his website at all times as a way of effectively complying with this obligation. 11 This was instituted by Article 28 of Spanish Royal Decree 231/2008, of 15 February, which established the distinctive sign of membership of the consumer arbitration system, included in Annex I of said Regulation. As a result, companies in the consumer arbitration system, who accept that future disputes arising with their customers be resolved through consumer arbitration, make their membership visible by displaying an official logo that is easy for the user to recognize and identify. 12
In another regard, but as a judicial procedure with a clear connection to the above, it is worth mentioning Regulation (EC) 861/2007 of the European Parliament and of the Council, of 11 July 2007, establishing a European Small Claims Procedure. The objective of this process is, as stated in recital 7 of the Regulation, to facilitate access to justice. The cases to which the Regulation applies are those in civil and commercial matters where the value of the claim does not exceed €5,000 (Article 2.1), the purpose being to simplify and speed up small claims litigation in cross-border cases by reducing costs through an optional instrument. 13 The legislators’ aim with this Regulation was to facilitate consumer complaints within the internal market.
In line with the aforementioned Regulation, the Spanish Civil Procedure Act (hereinafter, LEC) was amended, on the one hand, to adapt the simplified procedure to the Regulation; on the other hand, to eliminate the possibility of filing an appeal against first instance judgments in those lawsuits where the amount in question does not exceed €3,000 (Article 455.1 LEC) and processed by the simplified procedure due to the amount (Article 250.2 LEC). The purpose of the exclusion of the appeal in these cases was to limit the sometimes abusive and often unnecessary use of the courts (see, in this sense, the Preamble of Spanish Law 37/2011, of October 10, on procedural streamlining measures).
The Spanish consumer arbitration system
Voluntary nature
The Spanish consumer arbitration system is based on voluntary participation of the parties, that is, the consent of both the consumer and the trader is required in order for the arbitration board to settle the controversy through this procedure. This is established in Article 58.1 of the Consumer and User Rights Guarantee Act (TRLGDCU): ‘The parties’ submission to the Consumer Arbitration System shall be voluntary (…)’. Royal Decree 231/2008, of 15th February, regulating the Consumer Arbitration System, naturally reflects this principle in Article 24.1 when it establishes that ‘The arbitration agreement (…) shall express the will of the parties to resolve through the Consumer Arbitration System any disputes that may arise or have arisen in a legal consumer relationship’.
In any case, only the consumer may submit the request for arbitration in which he/she sets out his/her claims, in other words, the initiative is left in the hands of the consumer, who expresses his or her intention for the controversy to be settled through the consumer arbitration proceeding, by submitting the complaint. The trader's intention can be expressed in two ways, either prior to any claim brought by any of its customers-consumers, in which case this is referred to as a public statement of adherence (oferta pública de adhesión ‘OPA’) (Articles 24.2 and 25 of RD 231/2008), or after a specific complaint has been filed and only for that particular case (express acceptance, Article 24.4 RD 231/2008).
The public statement of adherence
As we were saying, the OPA is a unilateral statement of intent made by the trader independently of whether or not there are any complaints against it. In this statement, the trader expresses its intention that any claims against it brought by its customers/consumers be resolved through consumer arbitration (Article 25.1 RD 231/2008). The margin for expressing the trader's will is broad, as it may, in principle, establish the limits it considers appropriate and opt for any of the possibilities that the regulation offers. As far as these possibilities are concerned, the second paragraph of Article 25.1 RD 231/2008 allows the trader to decide whether the arbitration is to rule under law or equity, and to establish the period of validity of the offer – which may not be less than one year as otherwise it will be deemed a limitation (Article 24.3 RD 231/2008) – whether it accepts, prior to the arbitration, that attempts be made to resolve the dispute through mediation, whether it restricts the scope of the OPA solely to consideration by the consumption arbitration boards of the territory where the marketing of its products or services mainly takes place through establishments open to the public (Article 24.3 RD 231/2008). If the trader gives no specific indication on these matters, the regulation presumes that its intention is for the arbitration to be in equity, that the offer is indefinite, and that prior mediation is accepted.
As far as the limitations are concerned, although the trader is offered the possibility of establishing them, in fact this possibility is not absolute, but subject to the authorization of the Consumer Arbitration Boards Commission (Articles 11.3 and 26 RD 231/2008). The limitations may refer to the matter submitted to arbitration, the amount, the competent arbitration board, the territory (if smaller than the place where the trader carries out its commercial activity) or with regard to timing (if the offer is valid for less than one year).
The negative effect of the voluntary nature
The voluntary nature, which should be regarded as a positive aspect, as a competitive advantage for traders and, in any case, as an expression of business responsibility towards customers and consumers, has become a disruptive element for the resolution of numerous consumer disputes, as in certain sectors with a significant economic impact (financial sector, insurance, air transport, etc.) acceptance of arbitration is non-existent, forcing consumers who submit complaints not responded to by the trader to take the matter to court, which in most cases does not happen and, when it does, the matter takes a long time to be resolved. Furthermore, the possibility of establishing limitations in public statements of adherence and their acceptance, an increasingly common practice, by the Consumer Arbitration Boards Commissions, is resulting in a situation, in practice, in which the scope of scrutiny of consumer disputes is becoming smaller and smaller, at least as far as the big utilities suppliers (electricity, gas, telephone) are concerned. Accordingly, the option established by this legislative change is being considered, which would make consumer arbitration mandatory in the proposed terms, even though this may be at the cost of the waiving the enforceability of the arbitration decision as res judicata in cases where it is opted to resolve the dispute in law.
Administrative dispute resolution procedures: the case of disputes involving telephone services
Finally, a brief comment concerning other ways of resolving consumer conflicts with a markedly administrative nature. We are referring, for example, to the channel established for the resolution of conflicts involving telephone companies, 14 through the procedure regulated in Order ITC/1030/2007, of 12th April, regulating the procedure for the resolution of claims in respect of disputes between end users and operators of electronic communications services and customer service by operators. Use of this procedure is compulsory for telephone companies (Article 2), but not all matters in dispute can be subject to it. Thus, for example, consumers may not request compensation for damages (Article 2.2 a), ask for a clause in the contract binding them to the company to be declared null and void (Article 2.2 b) or make a claim in respect of incorrect functioning of telephone terminals (Article 2.3 b). Furthermore, an appeal against the ruling may be lodged with the contentious-administrative courts (Article 9.3), but it is, to say the least, strange that contentious-administrative jurisdiction is to resolve on contractual aspects between the parties (for example, the correct application of the contracted rate, the correspondence between the contractual conditions applied with respect to those actually contracted, etc.), which inherently pertain to civil jurisdiction.
Comparative study with the Portuguese system
The Portuguese consumer arbitration system has undergone a significant evolution since its creation. Apart from having a structure different from that of the Spanish system, what is interesting to highlight now is the substantial transformation experienced in relation to access to the procedure. 15 Indeed, although initially the system operated like the Spanish system, in 2011, and through Law 6/2011, of 10 March, Article 14 of Law 24/96, of 31 July, Consumer protection act, was amended to the effect that consumer disputes in the field of essential services must be subject to mandatory arbitration if the individual consumer chooses this means of dispute resolution. 16 It therefore establishes a voluntary system for the consumer, but mandatory for businesses. By essential services we should understand those listed in Article 1.2 of the Portuguese Consumer Protection Act: water supply, electric power, gas, electronic communications services, postal services, wastewater collection and treatment services and solid urban waste management services. 17
Recently, Law 63/2019 of 16 August has again amended the rule that continues to consider consumer arbitration voluntary for consumers, but mandatory for businesses, when the amount of the dispute does not exceed that of the jurisdiction of the courts of first instance (€5,000) (Article 14.3 Law 24/96). The Consumer Protection Act now considers that these are disputes of low economic value.
Also noteworthy is the fact that there is a ceiling on the maximum amount of disputes that can be resolved through consumer arbitration, since above €30,000 the consumer arbitration centres do not have jurisdiction.
The law regulating the arbitration procedure is that of voluntary arbitration (Portuguese Voluntary Arbitration Law 63/2011, of December 14), so there is no ad hoc rule for consumer arbitration. The arbitrators’ award is based in law, unless the parties have agreed that it shall be in equity. The award is not subject to appeal, unless the parties have agreed otherwise in the arbitration agreement, provided that it can be appealed in accordance with procedural law (amount less than €5000) 18 and the award is not based in equity (Article 39.4). 19 In any case, there is always the possibility of filing an action for annulment of the award for formal defects (Article 46).
It is also important to note that Article 60 of the Portuguese Constitution incorporates the right to consumer protection as a fundamental right. 20
Mediation as a procedural requirement and the prospect of a compulsory consumer arbitration system
From the above perspective, it is the set of these procedural rules that allows the effective protection of the rights established in the substantive rules to protect consumers (thus, consider the new conformity regulation provided for by Directive 2019/770 of 20 May on certain aspects concerning contracts for the supply of digital content and digital services, which has meant a step forward in consumer protection in the context of the digital market). 21 Next, we will explore the possibility of establishing a compulsory consumer arbitration system for cases in which the claim is for a smaller amount, as the current voluntary nature of this dispute resolution system, together with the option for companies to significantly limit the scope of adhesion to the arbitration system, place limits on the aforementioned effective protection of consumer rights. 22
The relevance of the Spanish Constitutional Court’s ruling 1/2018 of January 11, in the perspective of the introduction of mandatory consumer arbitration in Spain
Firstly, it should be noted that the turning point in terms of the possibility of establishing a compulsory consumer arbitration system in Spain was the interpretation given by the Spanish Constitutional Court (hereinafter SCC) to Article 24 of the Spanish Constitution, which recognizes the fundamental right to effective judicial protection. The recent Spanish Constitutional Court ruling 1/2018, of 11 January 2018, resolves the question of the unconstitutionality of Article 76(e) of Law 50/1980, of 8 October 1980, on Insurance Contract. From the reading of this precept it is clear that the insured party has the right to submit his disputes with the insurer to arbitration. This is an entitlement of the insured party but not an obligation. The judicial process remains open to him. However, the insurer is not given this same right, which is granted to the insured party by virtue of his contractual situation as the weaker party in the relationship. The question to be resolved, therefore, is whether the promotion of an arbitration system which sets aside the will of one of the contractual parties, who is forced to waive the judicial process in favour of arbitration, is a violation of Article 24.1 of the Spanish Constitution.
The SCC expressly states that ‘the lack of the necessary concurrence of the will of both litigants to submit to this extrajudicial dispute resolution mechanism and its imposition on one of them, in principle, is not compliant with the basic contractual aspect of arbitration and with the fundamental right to effective judicial protection that guarantees the right of access to the courts (Article 24.1 Spanish Constitution) (3rd section of the Legal reasoning)’. 23 The Court also clarifies that the objection could be overcome if the judicial review of the arbitration award were not limited to the merely external and formal aspect. That is to say, the violation of Article 24 of the Spanish Constitution that the Spanish Constitutional Court considers to have occurred is due to the fact that subsequent access to ordinary jurisdiction is prevented, since the challenge to the arbitration award is only possible on formal grounds (Articles 40 et seq. of Law 60/2003, of 23 December 23 2003, on arbitration), with the consequent lack of judicial review over the substantive matter (4th Section of the Legal reasoning).
Despite the tenor of the ruling, it is notable for the justices’ dissenting opinions. Judge Valdés Dal-Ré notes that the doubts about the constitutionality of Article 76 Law 50/1980 do not appear to be justified in the ruling under discussion since this provision is limited to conferring on the insured party the right to submit to arbitration any disputes that he has with the insurer. According to this justice: for that arbitration regulation to be ruled in violation of a constitutional right or, as the case may be, a power of an identical nature, the judicial body (…) should have analysed (….) whether Law 60/2003, of 23 December, on arbitration, or another allegedly applicable procedural rule, regulates the means of challenging arbitration decisions. And, after indicating the legal precepts in force in our legal system that deal with this issue, should have analysed whether or not the specific legal system establishes any type of restriction on the prosecution of disputes arising from the arbitral decision of the judicial bodies.
24
For his part, Justice Xiol Ríos, argues that, once it had reached the conclusion that the imposition of arbitration on one of the parties limits the right to effective judicial protection, the SCC should have considered whether it is possible to make such an exception to the restriction of individual freedom in favour of safeguarding general interests; in other words, whether the restriction on the exercise of effective judicial protection imposed by Article 76(e) Law 50/1980 is justified. In the opinion of this justice, it would be in the interest of the constitutional mandate to ensure the protection of consumers and users (ex-Article 51 Spanish Constitution). We share the opinion of Justice Xiol Ríos as it is clear that the consumer is at a disadvantage due to the characteristics of the insurance contract, which makes the recourse to arbitration a suitable and fully justified means to rebalance the contractual positions. It also underscores the current political trend in matters of contracts, distancing itself from the legal and social conception of liberalism and favouring contractual humanism that tends to protect the weaker party in asymmetrical contract scenarios. The justice who penned the third dissenting opinion – Narváez Rodríguez, in which Judge Enríquez Sancho joined – agrees with Justice Xiol Ríos in nuancing contractual freedom in order to rebalance the parties’ unequal contractual situation, adding that in contracts of adhesion (insurance contracts fall into this category) the consumer's autonomy is reduced to a bare minimum as the consumer is not involved in determining the content of the contract to be signed.
In short, we agree with the argumentation contained in the last two dissenting opinions and take the view that the limitation of the effective judicial protection of the insurer is not arbitrary in the case described, but is fully justified in view of the parties’ unequal contractual positions. This limitation allows the effective protection of the insured party as a consumer, the weaker party to the contract and a legal subject constitutionally protected in Article 51 of the Spanish Constitution. Consumer arbitration, as a means of dispute resolution, is a fast, agile and effective instrument – virtues that judicial protection does not always provide – enables the protection provided by the substantive regulation to be achieved. It is the initial imbalance of the parties to the contract that justifies the possibility of imposing the arbitration system on the insurer who, furthermore, is not deprived of its right to defence since, in any event, a third party – the arbitrator – determines the arbitration award and gives the reasons for the decision taken.
Towards a compulsory arbitration system in Spain in consumer relations
Therefore, we defend the need to establish compulsory consumer arbitration, which is legally viable if it is established with all necessary safeguards, as we have just argued. 25 The justification for such compulsory arbitration lies in the need to protect the weaker party in the relationship: the consumer (Article 51 Spanish Constitution). 26 Likewise, the possibility of substituting the courts’ knowledge of a matter for arbitration is perfectly possible when it is done by legal provision, and based on obtaining clearly beneficial purposes such as relieving the courts, access to a more affordable process and, above all, as has been stated above, the rebalancing of contractual positions. 27
The proposed amendment would make it optional for the consumer, but mandatory for companies or professionals, to resort to consumer arbitration in those disputes whose amount does not exceed €3,000, 28 regardless of the economic sector in which the company or professional is framed. 29 The proposal is based on the current concept of consumer arbitration, which is based on the adoption of the arbitration decision on the basis of equity, 30 unless either party requests the decision in law (note that this differs from the Portuguese system where the adoption of the arbitration decisions is based in law, unless the parties have agreed that it shall be in equity). 31 If it is the company that proposes the decision in law, the consumer should accept it in order to be able to continue with the arbitration procedure. If not, it would not be able to proceed. Furthermore, in order to comply with the requirements of the SCC regarding the need for the courts to be able to review the merits of the award – despite not sharing this criterion, as neither do the dissenting opinions-, in the event that the award is to be made in law, both parties may appeal the award before the civil jurisdiction, with the Court of First Instance having territorial jurisdiction (the place where the award was issued) 32 being responsible for resolving the appeal. On the other hand, if the parties are satisfied with the decision in equity, they implicitly waive the possibility of appealing it. For binding arbitration, there should be no limitations on the amount or the subject matter, and it should be sufficient for the dispute to be based on a consumer relationship. However, this and other aspects will have to be regulated in the regulation implementing the consumer arbitration system, which will require action by the government to amend the existing regulation in Royal Decree 231/2008 or, perhaps better, to draw up a new Royal Decree that includes all the new features and updates the procedural rules.
For cases where the amount in dispute exceeds €3,000, the legal regime would remain the current one, based on complete voluntariness. In this case, no appeal would be possible, as is currently the case (Article 455.1 LEC). The prior adhesion of companies to consumer arbitration, through public offers of adhesion, would continue to be of great importance, with the aim of making consumer arbitration the preferred means of resolving consumer disputes.
In any case, the action for annulment provided for in the Arbitration Act (hereinafter, LA) (Article 40) is maintained for those cases in which compliance with all the procedural requirements that guarantee the existence of a fair process is questioned, that is, based on any of the grounds provided for in Article 41 of said Act, whose jurisdiction corresponds to the High Courts of Justice of the Autonomous Community where the award has been rendered (Article 8.5 LA).
Likewise, there is also the possibility of requesting a review in accordance with the provisions of the LEC for final judgments (Articles 509 et seq. LEC), as provided for in Article 43 LA.
The reform of mediation and its impact on Spanish private law
The introduction of the proposal we have formulated should be accompanied by a mechanism that would also make it possible to reinforce negotiation between the parties through mediation. Spanish Law 5/2012, of 6 July, on mediation in civil and commercial matters – as well as Spanish Royal Decree 980/2013, of 13 December, developing certain aspects of said law – transposed Directive (EU) 2008/52/EC, of 21 May 2008, on certain aspects of mediation in civil and commercial matters, into Spanish law. The aim of these legal texts was to promote mediation as an effective instrument to regulate disputes arising between private law subjects within the scope of their legal relationship. However, the entry into force of Law 5/2012 did not achieve this aim of reinforcing the advantages of mediation. 33 Perhaps that is why Article 1.3. of the draft bill on procedural efficiency measures for the Public Service of Justice, dated 15 December 2020, requires prior negotiating activity as a procedural condition for the admissibility of a claim (Article 1.3). 34 All this would imply a reform of the LEC and other procedural rules. 35 In this context, we consider it necessary to establish compulsory mediation as a procedural requirement in cases of disputes over €3,000. 36
Furthermore, in that draft bill, the wording of Articles 394 and 395 of the Civil Procedures Act would make modulations to the general rules on the imposition of legal costs, with the aim of creating an incentive for the use of suitable dispute resolution methods, notably mediation. The preliminary legislator's intention is to create an out-of-court mechanism that will allow for the resolution of disputes by the parties themselves in private law relationships on freely disposable matters. We should also remember that in the Alassini and Menini cases, the CJEU has upheld that fundamental rights do not constitute unfettered prerogatives and may be restricted, provided that the restrictions in fact correspond to objectives of general interest pursued by the measure in question and that they do not involve, with regard to the objectives pursued, a disproportionate and intolerable interference which infringes upon the very substance of the rights guaranteed. 37
Digital arbitration: the ‘marriage’ between ADR and technology: the use of artificial intelligence in consumer arbitration proceedings
To conclude, we consider it opportune to make a brief note regarding the possible use of artificial intelligence (hereinafter AI) in arbitration to resolve consumer claims as one of the questions currently being discussed is the possibility of involving electronic media in reaching the decision on the dispute.
Firstly, it can be stated that alternative means of dispute resolution have taken the lead, compared to the judicial route, in incorporating technology into their standard procedures (for example, the online dispute resolution platform created by Regulation 524/2013). Even so, the ADR Directive did not portend – let alone address – the potential that AI may have in the development of alternative dispute resolution systems, particularly in arbitration. 38
From an elementary perspective, AI is a huge database whose operation is complex and that uses algorithms to achieve the same capabilities as human beings. With regard to dispute resolution, the algorithm must process the information in order to reach a final decision. The Independent High-Level Expert Group on Artificial Intelligence, created by the European Commission in June 2018, in its publication ‘Ethical Guidelines for Trustworthy AI’, defines AI as: software (and possible also hardware) systems designed by humans that, given a complex goal, act in the physical or digital dimension by perceiving their environment through data acquisition, interpreting the collected, structured or unstructured data, reasoning on the knowledge, or processing the information, derived from this data and deciding the best action(s) to take to achieve the given goal. AI systems can either use symbolic rules or learn a numeric model, and they can also adapt their behaviour by analysing how the environment is affected by their previous actions.
39
In turn, in COM (2018) 237 final, ‘Artificial Intelligence for Europe’, the Commission indicates that: Artificial intelligence (AI) refers to systems that display intelligent behaviour by analysing their environment and taking actions – with some degree of autonomy – to achieve specific goals. AI-based systems can be purely software-based, acting in the virtual world (e.g. voice assistants, image analysis software, search engines, speech and face recognition systems), or AI can be embedded in hardware devices (e.g. advanced robots, autonomous cars, drones or Internet of Things applications).
In the legal context, and especially in the context of out-of-court dispute resolution, the ODR environment (characterized by the use of technology) is ideal for making use of the benefits of AI. Broadly speaking, there would be two ways of involving AI in an ODR setting.
Firstly, that in which the AI acts as a support element (providing assistance). This already happens in platforms such as Jur.Arbitration, which use AI as a medium for the processing and analysis of data and documents. This involvement of AI in the legal sphere is therefore limited to an assisting function or as an element of support. 40
Secondly, that in which the AI would take on decision-making functions, that is, in which technology would ultimately be granted the power to resolve the dispute (suggest the final decision). 41 This model will require suitable control over the adoption of automated decisions. 42 AI uses two techniques here: natural language processing and automatic learning. The ultimate goal is not to reproduce legal reasoning but to identify correlations between the different parameters of a decision and, through the use of automatic learning, to infer one or more models. It is these models that would be used to predict or foresee a future decision. 43
In relation to all this, the possibility of automating part of the resolution process in consumer claims is raised by Nieva, pointing out that one of the biggest advantages of the introduction of AI in the arbitration process would be its ability to resolve claims quickly. 44 Likewise, and as a first step, consideration should be given to classifying in a coherent way and using a technological tool all claims already resolved by the Arbitration Boards. 45
Given a classification of the resolutions on consumer claims resolved by the Arbitration Boards, AI could generate a predicted response to a hypothetical similar claim using so-called ‘machine learning’: 46 by studying the data and the knowledge generated from the different resolutions the algorithm would be able to predict a solution when the consumer files a claim. Similar claims mean predictable responses. 47
What is proposed, in a very embryonic state and deserving much more development, is not to replace the arbitrator with a smart agent but rather a management system that is more agile in the identification of the issue and can offer arbitrators not only a predicted arbitration result but also statistics or percentages of similar consumer claims that were successful. 48 A broad solution combining AI and ODR would significantly improve access to justice.
Conclusion
In conclusion, the above observations lead us to make the following critical observations:
The system that Portugal has established for consumer arbitration (optional for the consumer, mandatory for the company) when the dispute does not exceed a certain amount, should be adopted in Spain for those disputes based on a consumer relationship and of an amount not exceeding €3,000. The choice of amount is related to the scope of the appeal options established by Article 455.1 LEC. In other words, this is the amount below which there is no right to appeal, which is the same amount for which matters which must necessarily be processed through the arbitration system. The Spanish Constitutional Court's Ruling 1/2018, of January 11, which ruled on the unconstitutionality of Article 76 e) of the Insurance Contract Law, and, above all, the specific votes contained therein, reveal that consumer arbitration is feasible provided that the right to effective judicial protection contained in Article 24 of the Spanish Constitution is respected, that is, granting access to the courts when necessary. The justification for this obligation lies in the need to protect the weaker party in the relationship: the consumer (Article 51 Spanish Constitution). The limitation on the right to effective judicial protection is justified to safeguard general interests, which therefore justifies the restriction of the exercise of the right to effective judicial protection. That is why it is also proposed that to comply with the requirements of the judgement of the SCC regarding the need for the courts to be able to review the merits of the decision, if the decision must be adopted in law, both parties can appeal before the civil jurisdiction. However, this is at the cost of the enforceability of the arbitrators’ decision as ‘res judicata’. In this regard, the proposal is based on the current conception of consumer arbitration, which is based on the adoption of the award on the basis of equity, unless either of the parties requests the award in law. Therefore, when the parties agree with the award in equity, they implicitly renounce their right to appeal. On the other hand, if the dispute involves more than €3,000, the current legal scheme applies (in other words, it will be voluntary as per Article 25 and subsequent Spanish RD 231/2008), and therefore, there will be no right to appeal against the awards. From a procedural point of view, it is proposed to move toward a model of compulsory consumer arbitration in minor disputes. ADR is currently underused by consumers, largely because of its voluntary nature. The proposal will entail establishing a second instance through a right of appeal to the courts. The relevant legislative amendment for the introduction of an appeal against the award, on the merits of the case, before the competent Court of First Instance, would cover the requirement of preservation of the right to effective judicial protection stated by the Constitutional Court.
Footnotes
Declaration of Conflicting Interests
The author(s) declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.
Funding
This work is part of the execution of the project funded by the Ministry of Science and Innovation (PID 2019-107195RB-I00): Cumplimiento de los contratos y realidad digital: la adaptación del derecho contractual para la prevención de conflictos transfronterizos. The authors are also members of the research group: Grup de Recerca consolidat Dret civil català i dret privat europeu (2017 SGR 997).
