The statutory law for the alternative dispute resolution in customer affairs “Gesetz über die alternative Streitbeilegung in Verbrauchersachen” (VSBG) was published in the Bundesgesetzblatt on 23 February 2016 and entered into force on 1 April 2016. Since, 1 February 2017 some additional mandatory references are required in §§ 36, 37 VSBG which are often forgotten in practise. This minor error has a great impact.

It is useful to take a closer look at the implementation of required information in practice so far.

1. What might happen in case of a lack of the required references?

The VSBG does not provide any legal consequences which means at least, there is no basis for any fine to be imposed by the authorities. However, warning letters based on the competition law (Gesetz gegen unlauteren Wettbewerb – UWG) might cause serious harm to companies. During the last months, several court decisions set the value in dispute on 10k € and even more. Therefore, the following statements shall give an overview about the VSBG.

2. What are the statutory required references?

The law differs between pre-dispute references (Art. 36 VSBG) which means required references prior to any conflict situation between customer and company and required references in conflict situations.

a) Pre-dispute references

Companies are generally obliged to inform customers in a simple and comprehensible manner whether they are participating in an alternative dispute settlement procedure.

This requirement applies to all companies who conclude contracts with customers and maintain a website and/or have general terms and conditions (GTC) in place. The information need to be easily accessible and inform the customer clearly and comprehensibly whether the company is participating in an alternative dispute resolution procedure and which concrete dispute resolution organisation is responsible in case of dispute.

Exempt from this obligation are only small-scale companies who had employed up to ten (10) employees on 31 December of the preceding year, unless they are otherwise obliged to participate in the dispute resolution procedure. Such an obligation might arise out of a participation in an economic association which requires a compulsory dispute settlement for their members.

b) Obligation in case of dispute

In addition to this general obligation, the law provides specific requirements in case a dispute has already arisen out of a customer contract and cannot be settled.

These requirements must be taken into account by companies regardless of their number of employees. The company need to inform the customer of his or her willingness/duty to participate in the alternative dispute resolution procedure and provide specific information on the responsible dispute resolution organisation.

According to the law companies are obliged to provide customer information after a dispute exists, even, if the company rejects to participate in such a procedure. According to the wording of Article 37 VSBG, in this case the company is obliged to designate the customer compensation organisation which would be hypothetically responsible to lead the dispute resolution procedure, even if the information is completely useless to the customer.

3. Practice Note

To implement the aforesaid requirements, the following formulations could be used:

a) Precautionary information obligation

“We are not participating in a dispute resolution procedure.”

b) Information obligation in case of dispute

In case of a failed settlement, the following information should be sent by e-mail – an oral note is not sufficient:

“In case of any disputes, the Dispute Settlement Office, Center for European Customer Protection, Bahnhofsplatz 3, 77694 Kehl, phone: 07851/991480, E-Mail:, We do not, however, participate in the dispute settlement process.”

A list of officially recognized dispute settlement organisations can be found here.

4. Where are the information need to be published?

a) Precautionary information obligation

In addition to the link to the so-called ODR platform, which is usually found at the imprint of each website, the reference to the dispute resolution organisation is to be included in the terms and conditions published on the website.

If no general terms and conditions are published, for example because a conclusion of a contract cannot/should not be made directly via website, another suitable place is to be found. The imprint could be a good place, next to the ODR platform’s link.

b) Information obligation in case of dispute

If a complaint management is established, the reference should be standardized included in the e-mail’s signature.

5. Conclusion

It depends on the individual case whether a neutral arbitration body can prevent a court dispute and serve the customer satisfaction. In our opinion, a professional complaint office is likely to achieve similar goals more efficiently and perhaps even contribute to long-term customer loyalty. Notwithstanding participation, company should implement the above-mentioned information in order to avoid any warnings based on the competition law.