Presentation ADR

8/6/2019 Presentation ADR

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Alternative resolution by mediation of consumerdisputes related to financial services in Romania

- within the framework of the practices of the EU Member States -

Professor Carmen Blan Ph.D.

Academy of Economic StudiesFaculty of Marketing

Bucharest, Romania

Katowice, 7 March 2011


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CONTENTS

Section Page

I. The importance of the topic 3

II. Definition of ADR 5

III. Types of ADR procedures 10

IV. Mediation in the EU: the regulatory framework 15

V. Mediation in the sector of financial services in the EU Member States 31

VI. Mediation in Romania: the regulatory framework 42

VII. Mediation in the sector of financial services in Romania 52

VIII. Conclusions 71IX. Recommendations 75


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Section I

The importance of the topic


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The importance of the topic

Romania: increasing number ofcustomer complaints relative to the contractualrelationships with financial institutions, especially banks

NACP received:

4,000 complaints relative to the banking services in 2008

3,000 complaints in 2009

out of which 650 have been submitted to courts

Most complaints referred to:

unjustified increases in the bank commissions and in the interest rates for creditcontracts that have been already signed by banks and customers

other modifications of the clauses after the conclusion of the contract and withoutcustomer acknowledgement and agreement

EU Member States: the current trend to develop and implement ways ofalternative dispute resolution that represent more convenient alternatives for customers in terms of time and financial

resources, in comparison with the classical judicial system


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Section II

Definitions of ADR


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Various definitions

Numerous international debates

Definitions vary on a continuum between very narrow to very broad

perspectives

On one side:

there is a strict technical meaning that refers only to the non-judicialdevices that may be used forout-of-court dispute resolution

On the other side:

there is a broad definition according to which alternative dispute resolutionrefers to non-judicial as well as tojudicial devices that are an alternative tothe ordinary or traditional procedures


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Study commissioned

by the European Commission: 2007 (1/2)

Stuyck, J. et al., 2007.An analysis and evaluation of alternative means ofconsumer redress other than redress through ordinary judicial proceedings.Final report. Leuven: Study Centre for Consumer Law Centre for European

Economic Law at the Law Faculty of the Katholieke Universiteit Leuven (Belgium),17 January 2007.

Study made in 28 countries:

25 Member States of the EU Australia, Canada and the USA

ADR may be defined as a continuum between:

no actionand

reliance on ordinary court procedures


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Study commissioned

by the European Commission: 2007 (2/2)

Five categories of mechanisms to obtain redress (other thanindividual redress through ordinary court procedures):

a) direct negotiation (between consumer and the merchant)b) mediation and arbitration

c) small claim procedures

d) collective actions for damages

e) injunctive relief

The report has revealed that each analyzed country has a unique mixof ADR processes and techniques


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Most recent study on ADR in the EU: 2009

Alleweldt, F. et al., 2009. Study on the use of alternative disputeresolution in the European Union. Final report. Berlin: Civic Consultingof the Consumer Policy Evaluation Consortium (CPEC), 16 October 2009.

The study referred to:

characteristics and use of the ADR schemes

procedures and functioning of the ADR schemes conformity with EC recommendations and the best practices.

Majorstrengths of the report:

detailed perspective of the ADR schemes applied by each Member State

data about all the ADR bodies, by economic sector


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Section III

Types of ADR procedures


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Types of ADR procedures (1/4)

Criterion:

type of involvement of the third party

Three distinct categories of ADR procedures:

a) conciliation or mediation

b) recommendation and binding decision

c) arbitration


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Types of ADR procedures:

a) conciliation or mediation (2/4)

The 3rd party:

may help the parties in dispute

without formally expressing an opinion on the possible solutions to thedispute

The parties: are invited to start or continue a dialogue and to avoid confrontation

based on consensus, the parties themselves identify the personalizedsolution adapted to the nature of the dispute


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b) recommendation and binding decision (3/4)

The 3rd party:

identifies a solution and presents it to the parties in dispute

Within this ADR category, there are two possible types of solutions:recommendation and binding decision

b1) Recommendation

The parties in dispute are free to accept or not a recommendation made by thethird party.

A consumer who is not satisfied with the recommendation may go to court

Ex: consumer complaint boards in the Scandinavian countries

b2) Binding decision

The decision of the third party is binding on the tradesperson

Such decisions are made by third parties such as ombudsmen (in banking andinsurance sectors)

Similarly, the consumer who is dissatisfied with the decision may go to court


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c) arbitration (4/4)

The 3rd ADR category resembles the court procedures

The decisions made by an arbitrator:

are binding on both parties

they have the status ofenforceable decisions and consequently thesettled dispute cannot be taken to court


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Section IV

Mediation in the EU: the regulatory framework


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Commission Recommendation

of 4 April 2001 (1/8)

Commission Recommendation of 4 April 2001 on the principles forout-of-court bodies involved in the consensual resolution of

consumer disputes. C(2001) 1016, Official Journal, L 109, 19/04/2001,Brussels, 4 April 2001, pp. 56-61.

Principles:

a) Impartiality

b) Transparency

c) Effectiveness

d) Fairness


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Commission Recommendation of 4 April 2001:

a) impartiality (2/8)

Impartiality should be guaranteed by ensuring that those responsiblefor the procedure:

a) are appointed for a fixed term and shall not be liable to be relieved fromtheir duties without just cause

b) have no perceived oractual conflict of interest with either party

c) provide information about theirimpartiality and competence to bothparties prior to the commencement of the procedure


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b) transparency (3/8)

1. The transparency of the procedure should be guaranteed

2. Information about the contact details, functioning and availability of the procedure shouldbe readily available to the parties in simple terms so that they can access and retain itbefore submitting a dispute

3. In particular, information should be made available on:a) how the procedure will operate, the types of disputes that can be dealt by it and any

restrictions on its operationb) the rules governing any preliminary requirements that the parties may have to meet, and otherprocedural rules, notably those concerning the operation of the procedure and the languages inwhich the procedure will be conducted

c) the cost, if any, to be borne by the parties

d) the timetable applicable to the procedure, particularly with regard to the type of dispute inquestion;

e) any substantive rules that may be applicable (legal provisions, industry best practice,considerations of equity, codes of conduct)

f) the role of the procedure in bringing about the resolution of a dispute

g) the status of any agreed solution for resolving the dispute


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b) transparency (4/8)

4. Any agreed solution for resolving the dispute by the parties should:

be recorded on a durable medium

clearly state the terms and the grounds on which it is based

That record should be made available to both parties

5. Information on the performance of the procedure should be madepublicly available, including:

a) the number and types of complaints it has received and their outcome

b) the time taken to resolve complaints

c) any systematic problems arising from complaints

d) the compliance record, if known, of agreed solutions


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c) effectiveness (5/8)

1. The effectiveness of the procedure should be guaranteed

2. It should be easily accessible and available to both parties

for instance by electronic means, irrespective of where the parties aresituated

3. The procedure should be eitherfree of charge to consumers, or anynecessary costs should be both proportionate to the amount indispute and moderate.

4. The parties should have access to the procedure without beingobliged to use a legal representative

nonetheless the parties should not be prevented from being represented orassisted by a third party at any or all stages of the procedure.


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c) effectiveness (6/8)

5. Once a dispute has been submitted it should be dealt with in theshortest possible time commensurate with the nature of the dispute.

The body responsible for the procedure should periodically review itsprogress to ensure the parties' dispute is being dealt with expeditiously andappropriately

6. The conduct of the parties should be reviewed by the body responsiblefor the procedure to ensure they are committed to seeking a proper,fair and timely resolution of the dispute

If one party's conduct is unsatisfactory, both parties should be informed in

order to enable them to consider whether to continue the dispute resolutionprocedure


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d) fairness (7/8)

1. The fairness of the procedure should be guaranteed

a) the parties should be informed of theirright to refuse to participate or to withdrawfrom the procedure at any time and access the legal system or other out-of-court

redress mechanisms at any stage if they are dissatisfied with the performance oroperation of the procedure

b) both parties should be able to freely and easily submit any arguments, informationor evidence relevant to their case on a confidential basis to the procedure unlessagreement has been given by the parties to pass such information to the other party.

If at any stage, the 3rd party suggests possible solutions for resolving thedispute, then each party should have the opportunity to present their viewpointand comment on any argument, information or evidence presented by the otherparty

c) both parties should be encouraged to fully cooperate with the procedure, in particular

by providing any information necessary for a fair resolution of the disputed) prior to the parties agreeing to a suggested solution for resolving the dispute, they

should be allowed a reasonable period of time to consider this solution


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d) fairness (8/8)

2. The consumer should be informed in clear und understandablelanguage, before agreeing to a suggested solution, of the followingpoints:

a) he has the choice as to whether or not to agree to the suggestedsolution

b) the suggested solution may be less favorable than an outcomedetermined by a court applying legal rules

c) before agreeing to or rejecting the suggested solution he has the right toseek independent advice

d) use of the procedure does not preclude the option ofreferring his disputeto another out-of-court dispute resolution mechanism, in particularwithin the scope of Recommendation 98/257/EC, or of seeking legal redressthrough his own judicial system

e) the status of an agreed solution


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European Code of Conduct for Mediators: 2004

(1/3)

In 2004, the Commission expressed its support for a European Code ofConduct for Mediators and put forward a proposal for a directive on

mediation The code of conduct:

was developed by a group of stakeholders with the assistance of theEuropean Commission

was officially presented on 2 July 2004, on the occasion of a conferenceorganized in Brussels

in the preliminary stage, the Code must have only the character of aninformal document, not being formally adopted by an EU institution

Individual mediators and organizations may voluntarily subscribe to thecode


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Establishes a set of principles to be applied in civil and commercial mattersby the individuals and organizations that subscribe to it

Mediation:

= any structured process, however named or referred to, whereby two or more parties toa dispute attempt by themselves, on a voluntary basis, to reach an agreement on thesettlement of their dispute with the assistance of a third person (mediator)

The text of the code refers to:

a) competence, fees of mediators and promotion of their services

b) independence and impartialityc) the mediation agreement, process and settlement

d) confidentiality


(2/3)


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(3/3)

The independence of the mediatoris an aspect of utmost importance

The mediator has the obligation to disclose any circumstances that maygenerate a conflict of interests

any personal or business relationship with one or more of the parties

any financial or other interest, direct or indirect, in the outcome of the mediation

the mediator, or a member of his firm, having acted in any capacity other than mediatorfor one or more of the parties.

Upon request from the parties and within the limits of his/her competence, themediatormust inform the parties relative to:

the manner in which they may formalize the agreement the possibilities for making the agreement enforceable


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Directive 2008/52/EC (1/4)

Directive 2008/52/EC of the European Parliament and of the Council of 21May 2008 on certain aspects of mediation in civil and commercialmatters, Official Journal, L 136 , 24/05/2008, pp. 3-8.

Main goal of the Directive;

to facilitate the access to ADR

to promote the amicable settlement of disputes by: encouraging the use of mediation

ensuring a balanced relationship between mediation and judicialproceedings

The provisions of the Directive refer to the cross-border disputes However, Member States may apply these provisions to the internal mediation

processes


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The definition of the concept of mediation

is similarto that presented in the Code of Conduct for Mediators

The mediation process may take place due to one of the following reasons: the initiative of the parties

a suggestion or order of a court

the provisions of the law of an EU Member State

The Directive provisions referred to aspects such as:a) ensuring the quality of mediation

b) recourse to mediation

c) enforceability of agreements resulting from mediation

d) confidentiality of mediation

e) effect of mediation on limitation and prescription periods


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Directive 2008/52/EC:Key provisions (3/4)

Parties may render enforceable the agreement concluded followingmediation, giving it a status similarto that of a court judgment

The enforceability is obtained by: judicial approval

notarial certification

The access of parties to justice is preserved should mediation notsucceed

The provisions relative to the periods of limitation and prescriptionensure that parties are not prevented to go to court


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An aspect that requires further debate:

the independence of mediators

While the Code of Conduct for Mediators has dedicated a substantialparagraph to it, the Directive did not address this issue


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Section V

Mediation in the sector of financial servicesin the EU Member States


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Mediation schemesin the EU Member States (1/2)

There is a diversity of mediation schemes for the commercialdisputes, in general, and for the financial service sector, in particular.

FIN-NET (Financial Services Complaints Network)

Established by the EU

Goal:

to facilitate the access of consumers to ADR systems in the field offinancial services

Complements the EEJ-Net

FIN-NET is a communitywide network that links the national ADR schemes

relative to financial services This initiative may have a favorable impact on cross-border disputes


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Mediation schemesin the EU Member States (2/2)

No single definition of mediation accepted in all the countries

The types of outcomes provided by the ADR schemes that include intheir denomination the word mediation vary

From: consensual agreement

To: non-binding recommendations / decisions

Consensual agreement, as a distinct outcome among others, may bespecific not only to the schemes that include the word mediation in their

denomination, but also to other schemes


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ADR schemes for mediationin financial services (1/2)

In the sector of financial services, ADR schemes that include in theirdenomination the word mediation have been established in thefollowing EU Member States:

Belgium

France

Italy

Luxembourg

Portugal

Romania

Slovakia


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ADR schemes for mediationin financial services (2/2)

Few of these mediation schemes in financial services have been notified to theEuropean Commission (EC)

This situation is similar to the overall trend (irrespective of economic sector), in the EUMember States

750 ADR schemes relevant to business-to-consumer disputes wereidentified, out of which only about 60% are notified to the EC

In the sector offinancial services:

18 mediation schemes were identified

out of which only 7 (respectively 26%) are notified to the EC

Reasons

many are in their initial stage of development

there is no perceived benefit of the notification


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Mediation schemesfocused on financial services and notified to the EC (1/2)

n/ax---noOOPbInvestor and Mediation Office of the Securities

Market Board (CMVM)

91-180

xx--51-100I & PbVO

(Pb & I)Centro de Informao, Mediao e Arbitragem deSeguros Automvel (CIMASA)

PORTUGAL

n/ax--xnon/an/an/aACA/ULC Mdiateur en Assurances

LUXEMBOURG

31-90x--->500IVPvConciliatore Bancario Finanziario

ITALY

31-90---xnon/an/aPbMdiateur du Ministre del'conomie, des Finances et de l'Industrie

31-90---xnoIVPvMdiateur de la Fdration Franaise des Socits

d'Assurances

FRACE

91-180

---xnoIVPvService de Mdiation Banques-Crdit-Placements

BELGIUM

CADBoB&C

DBoB

NbR

Ave-ragedura-tion in2008(days)

Outcomeof the procedureAverage

cost forconsumers

(Euros)

Fun-ding

Adhe-rence

by theindustry

Natureof the

schemeName of the mediation scheme


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Mediation schemesfocused on financial services and notified to the EC (2/2)

Source: Alleweldt, F. et al., 2009. Study on the use of alternative disputeresolution in the European Union. Final report. Berlin: Civic Consulting of theConsumer Policy Evaluation Consortium (CPEC), 16 October 2009

Note:

NbR = non-binding recommendation

DBoB = decision binding on business only

DBoB&C = decision binding on business & consumer

CA = consensual agreement mediated by scheme Pv = private

Pb = public

V = voluntary

I = industry O = other

n/a = data not available


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Mediation schemes not notified to the EC(in the sector of financial services)

Exist in:

France

Mdiateur de BNP Paribas

Mdiateur de lAssociation Franaise des Socits Financires

Mdiateur de la Fdration Bancaire Franaise

Mdiateur du Groupe Crdit Agricole

Mdiateur de la Caisse des Dpts

Mdiateur de la Socit Gnrale

Mdiateur de la banque Le Crdit Lyonnais

Mdiateur du Groupe Caisse dpargne

Romania

Union of Banking Mediators Slovakia

Mediation Centre of the Slovenian Insurance Association

Mediation Centre of the Bank Association of Slovenia


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Outcomes of the mediation schemes

The mediation schemes existing in the EU Member States may be classifiedaccording to the outcome of the procedure

Mediation: Stricto sensu

refers to solutions based on the consensual agreement between the parties to thedispute.

However, practice shows that mediation schemes may also have as outcomes:

non-binding decisions (recommendations)

decisions binding on both parties

Many schemes provide a combination of possible outcomes


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Diversity of schemes and outcomes

Schemes focused on both mediation and arbitration

Example:

the Financial Services Complaints Institute (Kifid) from Netherlands

the outcome consists in consensual agreement between the parties to the disputeand decisions binding on both parties

Schemes that do not include in their denomination the word mediation andgenerate a mediated consensual agreement

Example: the ombudsman in the financial service sector

Outcomes: binding or non-binding solution and also consensual agreementmediated by the scheme

ABSL Service Insurance Ombudsman (in Belgium)

Financial Sector Supervisory Committee (in Luxembourg)

Insurance Ombudsman and Banking Ombudsman (in Poland)

Financial Service Ombudsman (in the United Kingdom)


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Development stage of the ADR schemesthat lead to a mediated outcome

At present, the ADR schemes that lead to consensual agreement bymediation are in an early development stage

Most of the times, there is no strict frontierbetween mediation and othertypes of ADR schemes

Mediation may be provided by both:

schemes specialized in mediation

schemes focused on other ADR procedures applied in financial

services


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Section VI

Mediation in Romania: the regulatory framework


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Regulations

Law relative to mediation

2006: in Romania, the first law on mediation was adopted

Law no. 192 relative to mediation and the organization of the mediatorprofession

2009: this law was modified and completed by Law no. 370

Standard relative to the training of mediators

2007: the Standard relative to the training of mediators was approved by theCouncil of Mediation

2008: the Council of Mediation has modified the standard (Council ofMediation, 2008).

Code of Ethics and Professional Deontology of Mediators

2008: the Council of Mediation has adopted the code


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Law no. 192/2006modified and completed by the Law no. 370/2009 (1/5)

Refers to:

the profession of mediator

the organization of the activity of mediators the rights and responsibilities of mediators

the mediation procedure

the mediation of family conflicts and of criminal causes

Article 1

Mediation is defined as a way to solve the conflicts on a conciliatory base,

with the support of a specialized third party as mediator, within a frameworkofneutrality, impartiality and confidentiality and with the free consent of theparties


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The Romanian definition of mediation is in line with the content of theDirective 2008/52/EC

However, the definition provided by the Romanian law states thecondition of neutrality of the third party that provides assistance to theparties in dispute

This condition is not formally mentioned in the Directive 2008/52/EC

Nevertheless, the European Code of Conduct for Mediators that has onlyan informal value states as requirement the independence of mediators


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Mediator: definition

A person trusted by the parties and that is able to facilitate the negotiations betweenthem and support them to solve the conflict through the identification of a mutually

convenient, efficient and sustainable solution

The mediator cannot impose a solution relative to the dispute between parties

The mediation process is based on the cooperation of the parties to the dispute

Profession of mediator

may be practiced only by the person that has obtained the quality of authorizedmediator

is compatible with the practice of other activities or professions.

authorized mediators are registered in the Table of Mediators that is drawn up by theCouncil of Mediation and published in the Official Journal of Romania, Part I

L 192/2006


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Relevance of the law to the commercial disputes

the provisions are also applicable to the conflicts in the field ofconsumer protection:

purchase of defective goods or services

non-observance of contractual clauses or warranties provided existence of abusive clauses within the contracts concluded between consumers and

economic operators

infringement of other rights stipulated by the national or EU legislation in the field ofconsumer protection

No special provisions relative to mediation in commercial law, even if it comprisesspecial provisions relative to mediation in civil law, in criminal law and family law

In Romania, similarly to the EU legislation, mediation of commercial matters is addressed by a lawthat also refers to the civil matters

Reasons:

common characteristics

present stage in the development of legislation on commercial litigations

L 192/2006


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Council of Mediation

organizes the mediation activity in Romania

autonomous legal person of public interest with its headquarters in Bucharest

Main responsibilities of the council:

promotion of the mediation activity and representation of the interests of the authorizedmediators

development of training standards relative to mediation based on the international bestpractices

authorization of the initial and continuous professional training, as well as of thespecialization training

authorization of mediators

supervision of the compliance with the training standards in the field of mediation

development of the Code of Ethics and Professional Deontology

making proposals to improve regulation of mediation

C d f Ethi & P f i l D t l (1/2)


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Code of Ethics & Professional Deontology (1/2)

Approved by the Council of Mediation

reflects the provisions of the Law no. 192/2006

The provisions of the code

meant to guarantee based on their free acceptance by mediators thefulfillment of the mediators mission

The non-compliance with the deontological norms specified by the code

incurs the application ofdisciplinary sanctions by the Council of Mediation

C d f Ethi & P f i l D t l (2/2)


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Code of Ethics & Professional Deontology (2/2)

General principles to be applied by mediators

freedom of parties to apply to mediation and to make a decision

non-discrimination independence, neutrality and impartiality of the mediator

trust and moral integrity

professional secret, confidentiality

conflict of interests

fee setting

responsibility of mediators

incompatibilities quality of the mediation process

Authorized mediation:


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Authorized mediation:evolution stage in Romania

Early stage

The regulatory framework relative to mediation and mediator profession wasadopted very recently

The profession of mediatorwas legally created in 2006 Both civil matters and commercial matters are the object of the same provisions

relative to mediation and the organization of the profession of mediator

Less likely the development oflaws specialized in authorized mediation in thesector offinancial services, within the near future

Reasons:

the early stage in the development of authorized mediation

the existence of a set of legal provisions that refer generally to all the situations ofmediation in a non-specialized way make

The practice of mediation in financial services must evolve so that the need forspecial legal provisions to become significant in order to be addressed


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Section VII

Mediation in the sector of financial services in Romania

Union of Banking Mediators from Romania


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Union of Banking Mediators from Romania(1/6)

Established on 11 November 2009

as body specialized in the sector of financial services

by some of the authorized mediators from the Table of Mediators

Goal

to promote mediation and to mediate conflicts and litigations from the banking,leasing and insurance sector

Basic principles of mediation applied by the UBMR

legality, neutrality, impartiality, confidentiality and mutual respect



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Romanian legal person ofprivate law

Professional non-profit body

The activities of the UBMR comply with Law no. 192/2006 modified and completed by the Law no. 370/2009

norms and instructions of the Council of Mediation

code of conducts of the: American Bar Association (ABA)

Association for Conflict Resolution (ACR)

American Arbitration Association (AAA)

European Code of Conduct for Mediators Code of Ethics and Professional Deontology of Mediators from Romania



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The activity of UBMR includes among others:

making proposals for the improvement of the regulatory framework relative to conflict mediation inthe banking, leasing and insurance system

organization of a permanent dialog and good cooperation with institutions such as:

Council of Mediation

professional associations of authorized mediators

Romanian National Bank

Romanian Banking Association

Romanian Banking Institute commercial banks

Ministry of Justice

National Authority for Consumer Protection

Government of Romania and Parliament of Romania

Union of the Liberal Professions National Association of the Romanian Bars

Association of Business People

Association of Banks Customers

Ministry of Public Finance etc.



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The authorized mediators that are members of the UBMR may providemediation services in order to assist in solving conflicts such as:

a) conflicts claimed by customers

b) conflicts claimed by banks

c) conflicts between bank employees at all levels

d) other conflicts that do not refer to the relationships bank employee

customer and are under the incidence of the Law no. 192/2006



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U o o a g ed ato s o o a a(5/6)

Examples of conflicts claimed by customers (being either legal or naturalpersons):

incorrectly calculated interest rates

unjustified increase in the interest rates that were supposed to be fixed during the

contract period unjustified commissions

errors in processing transactions with cards

errors in processing online banking transactions

incomplete or unclear information

unauthorized operations in the accounts

banking frauds

unjustified registration as bad debtor with the Central of Banking Risks and with theCredit Bureau

abusive clauses inserted in the credit contracts no communication from the bank relative to the increase in the interest rate

changes in the clauses of the convention without the consultation and agreement ofcontractual parties and without registration in an additional act signed by bothparties

damages for customers due to the late processing of money orders etc.



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g(6/6)

Examples of conflicts claimed by banks

non-payment with ill will by banks customers of their money debts to the bank

late payment after debt deadline by customers unjustified refusal of the customer to pay the interest and legally calculated

penalties

threatening, insulting, slandering or striking of bank employees by the debtor

customers denigration of bank in mass-media by customers

registration of unjustified complaints relative to banks with the National Authorityfor Consumer Protection and National Bank of Romania

Romanian Banking Association (1/2)


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Recognized the need for ADR schemes in the field offinancial services

Background study relative to the establishment of a bank ombudsman inRomania

suggested that an independent and effective Bank Ombudsman scheme be establishedmodeled after the European schemes analyzed by the study

December 2006: presented to the SPI Committee

July 2007: the documents approved by the SPI Committee

In 2008: the National Bank of Romania approved the proposal of the RBA relative to the creation

ofmediator bancar (banking mediator)

banking mediatorwill give verdicts, establishing whether the customer or the bank isright, in the case of a conflict

The RBA registered the brand Mediatorul Bancar with the State Office forInventions and Trademarks (SOIT)



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g ( )

The text of the feasibility study

was elaborated in English

referred in its entirety to the establishment of a banking ombudsman

All the information provided to the mass-media channels as well as thetrademark registered with OSIT use the term mediator bancar asequivalent translation to financial ombudsman

In fact, the project of RBA refers to a banking ombudsman, not to abanking mediator

The two concepts belong both to the ADR area

Ombudsman vs. mediator (1/6)


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Both act as third parties

Experts make a clear distinction between ombudsman and mediator

The major reasons:a) role

b) type of outcome

c) neutrality, impartiality and confidentiality

d) choice of a mediator

e) research

Ombudsman vs. mediator:


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a) role (2/6)

Ombudsman

Role: to identify a solution under the form of a decision that is binding to thetradesperson

the consumer that is dissatisfied with the decision may go to court

Mediator

Role: to assist parties to identify themselves a mutually beneficial solution by dialogand cooperation

The mediatordoes not formally express and impose own opinion on the possiblesolution to the dispute

According to article 4(2) of the Law no. 192/2006 relative to mediation and to theprofession of mediator and modified and completed by the Law no. 370/2009:

the mediatordoes not have decision powerrelative to the content of theagreement that will be reached by parties, but may guide them to verify thelegality of agreement (according to article 59)

Ombudsman vs. mediator:b) t f t (3/6)


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b) type of outcome (3/6)

Mediator

assists parties in solving the conflict by means of obtaining a solution that is:

mutually beneficial to these parties efficient

sustainable

Article 1(2) of the law Law no. 192/2006 modified and completed by the

Law no. 370/2009

Ombudsman

is not responsible to ensure such characteristics of the outcome

Ombudsman vs. mediator:) t lit i ti lit d fid ti lit (4/6)


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c) neutrality, impartiality and confidentiality (4/6)

Mediator

neutrality, impartiality and confidentiality are conditions to be fulfilled by mediators

According to article 1 of the Romanian Law no. 192/2006 modified and completed by the Law no.370/2009

must lead the mediation process in an impartial way and ensure a permanent balance betweenparties

Article 30(2) of the Romanian Law no. 192/2006 modified and completed by the Law no. 370/2009

the obligation to keep the confidentiality of the information during the mediation activity as well as ofthe documents elaborated or submitted by parties during the mediation process, even after the

cessation of his/her function Article 32 of the Romanian Law no. 192/2006 modified and completed by the Law no. 370/2009

Ombudsman (as registered by RBA)

a financial ombudsman is a person that has a relationship with a bank, for example as employee,

collaborator or member of an association of banks may not be the mediator of a banking dispute

from the perspective of a mediator, the conflict of interests should be avoided, in order to ensure aprofessional and ethical assistance to the parties

Ombudsman vs. mediator:d) choice of a mediator (5/6)


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d) choice of a mediator (5/6)

The parties may freely choose themselves the mediator

the mediator is not appointed by an institution or an association

The mediation is based on the trust placed by the parties in the mediator

Ombudsman vs. mediator:e) research (6/6)


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e) research (6/6)

Mediator

does not make research relative to the dispute, like an ombudsman

Ombudsman

makes research

RBA & UBMR (1/2)


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If no changes will be made in the terminology used (more specificallyin the translation of the term ombudsman from English to Romanian) bythe RBA specialists, there is a lot of room for errors among customers and

all those who are not very knowledgeable of ADR

The president of RBA estimated that until the end of 2008, the banking

mediator may become functional However, the intentions of RBA and the efforts deployed to set up a mediation

entity did not materialize until December 2009 when the UBMR was created

RBA & UBMR (2/2)


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18 January 2010: the board of directors (BoD) of the RBA has published a two-paragraph press release on its site

relative to the own project relative to mediation and to the UBMR

the BoD acknowledges the customers (natural or legal persons) of the credit institutions,as well as the media channels, that:

the recently created UBMR is not the result of the project supported by RBAand by the banking community

RBA continues its efforts to set up an entity with mediation responsibilities in thebanking field that will be accepted and recognized by the banking community

the level of professionalism and knowledge of the banking activities of the entityplanned by RBA will represent a warranty for a competent and pertinent analysisof the causes to be mediated and will ensure correct decisions that will meet the

expectations of those who apply to the services of this entity.

Mediation clause


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At present, almost all commercial contracts do not include a mediation clause

The Center of Mediation of the Commercial Disputes with the Chamber ofCommerce and Industry of Romania and of Bucharest

has suggested two possible formulations of such a clause:

a) the former refers to a contract

Every misunderstanding, dispute or divergence relative to the conclusion,

interpretation, implementation or cessation of the present contract will be

submitted to the mediator (name of the mediating person/body) ...b) the latter refers to an extra-contractual relationship

Every misunderstanding or dispute relative to the existence, fulfillment or

cessation of the extra-contractual obligation of commercial nature for at least one

of the parties, will be submitted to the mediator (name of the mediating

person/body) ...

The right question


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Which should be chosen out of the two ADR schemes?

or

How both types of ADR (by mediator and ombudsman) may beeffectively implemented to benefit both consumers and the institutions

providing financial services?


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Section VIII

Conclusions

Conclusions (1/3)ADR schemes


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ADR schemes

The need for ADR as an alternative to judicial settlement of consumer disputes

especially in the case of cross-border transactions

fact reflected by the development of various types of ADR bodies and procedures in the

EU Member States

Presently, the ADR schemes are in an early development stage in the EU ingeneral and in financial services in particular

Reasons:

ascending trend in the ADR field, consisting in an increasing numberof public andprivate schemes in the Member States

uneven development of ADR among Member States

lack of a standardized approach relative to the types of schemes and outcomes

relatively general EU regulations that established mostly the principles of ADR

Conclusions (2/3)Mediation in financial services


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Evolved as an ADR scheme several EU countries

Mediation schemes that are notified to the EC

exist in Belgium, France, Italy, Luxembourg and Portugal

Non-notified schemes

exist in France, Romania and Slovakia

Outcomes

schemes that are not focused on mediation but provide the outcome of a consensualmediated agreement, like in Belgium, Luxembourg, Netherlands, Poland and the UnitedKingdom

from a broad perspective, mediation and consensual agreement by mediation arepossible in ten Member States of the EU, in the field of financial services

compared to the broader concept of ADR (that incorporates more procedures thanmediation and that is in the early development stage in the EU), mediation in thefinancial service sector has reached only an emerging stage in the EU

Conclusions (3/3)Romania


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In Romania, mediation in financial services is just in a pre-emerging stage Reasons:

until 2009: absence of any ADR schemes specialized in financial services

since November 2009: there is only one mediation scheme dedicated to the financialservice sector

However, in the absence of mediation schemes, numerous complaints relative tofinancial services were submitted by consumers to the National Authority for ConsumerProtection (NACP)

No law especially dedicated to the mediation in the sector of financial service only a law that refers generally to the mediation of every type of dispute/conflict/litigation

the law comprises special provisions relative to mediation in civil, criminal and family law,but does not include a special section relative to mediation in commercial law.

Slight conflict between the two main initiators of mediation schemes UBMR & RBA


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Section IX

Recommendations

Recommendations (1/3)


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Firstly, specialists and decision-makers must avoid placing limitationsin the path of the diversified development of ADR schemes in financialservices

The significant number of complaints on financial services received byNACP is a reason to promote various ADR schemes, among which rangemediation

The EU experience shows that in the early development stages, astandardized approach may hinder innovativeness and the ability toidentify solutions that are better suited to the customer needs for quick,effective, affordable and impartial settlement of disputes

In this stage, Romania should encourage the development ofdifferent ADRtechniques and bodies, in general and in financial services specifically.



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Secondly, the promoters of the various ADR schemes in financialservices should make a difference between ombudsman & mediator

should also acknowledge customers and mass media about the content ofthis difference

Thirdly, the experimentation of different ADR schemes may be

beneficial in orderto test and further improve them to better fulfill theirrole

the question is not which ADR scheme is the best, but how to developeach scheme in order to provide consumers with a reliable alternativedispute resolution



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Fourthly, another recommendation is to organize further in-depthresearch able to reveal the effectiveness of the various ADR schemesincluding mediation in the financial service sector

a perspective of both Romania and other EU Member States

potential research objectives:

effectiveness of mediation and other ADR schemes applied in thefinancial service sector in the EU Member States and in Romania

satisfaction of consumers relative to the outcomes of each scheme

duration and costs for consumers

outcomes and activities specific to each type of scheme

Documents

Presentation ADR