Legislative definition of consumer disputies
Under the Consumer Protection Act (Section 20e(c)), the ERO is the ADR entity (entity in charge of alternative dispute resolution) in the electricity, gas, and heat supply industries within the scope specified by the Energy Act.
Who can submit the application for a consumer dispute to be initiated?
Under the Consumer Protection Act (Section 2(1)(a)), natural persons who are not acting as part of their business activities or as part of the independent performance of their vocation are understood to be consumers.
The Consumer Protection Act (Section 20d) gives consumers the right to out-of-court [alternative] resolution of their disputes arising from purchase contracts or service provision contracts. The Consumer Protection Act thereby defines the ‘consumer dispute’.
What are the cases for which alternative dispute resolution is intended?
In the energy sector, consumer disputes are those arising from service provision contracts of which electricity, gas or heat supply and/or distribution is the subject matter. They typically include contracts for bundled services of electricity or gas supply, or contracts for thermal energy supply.
The ERO’s competence to adjudicate on consumer disputes upon consumers’ application is governed by the Energy Act (Section 17(7)(e)(1) and (2)), under which the ERO decides upon applications submitted by consumers taking electricity, gas or thermal energy for consumption in their households:
- Disputes between the customer and the licensee over the performance of obligations under contracts for electricity, gas or thermal energy supply and/or distribution,
- The ERO adjudicates on consumer disputes whereby the consumer seeks the performance of the licensee’s (electricity or gas supplier’s) contractual obligation that was not performed in a timely and proper manner. In its decision, the ERO obliges the licensee to perform its obligation, such as start the electricity or gas supply if it did not start the supply on the agreed date, or bill the electricity or gas supply by a certain date, or refund the overpayment from electricity or gas supply billing by a certain date.
- Disputes over the determination of whether the legal relationship between the customer and the licensee, the subject matter of which is electricity, gas or heat supply and/or distribution, has come into existence, continues to exist, or has ceased to exist, and when this happened
- In its decision, the ERO declares [i.e. determines] whether, e.g., the legal relationship (contract) between the consumer and the licensee has ceased to exist and when this happened in the cases where the consumer took legal steps directed at the discharge of the contract through termination, rescission, or notification of no interest in extending a fixed-term contract, and the licensee explicitly does not respect the consequences of such legal act. Contract termination and rescission are unilateral legal acts that produce legal consequences at the moment when they are served on the licensee.
- The ERO is not competent to deliver declarations in the case of applications for, e.g., the determination of the validity or effect of a contract, the determination that it was not correct to dismiss a ‘non-compliance complaint’ [= reklamace in Czech], the determination that the amount of advances is not correct, the determination of a specific price for electricity/gas supply, the determination of the non-existence of an obligation to pay a contract penalty, and other applications that cannot be subsumed under the ERO’s competence to determine the coming into existence, existence, or discharge of a legal relationship.
The subject-matter jurisdiction of the ERO as an administrative authority cannot be extended through interpretation to include decisions in cases other than those laid down in Section 17(7)(e)(1) and (2) of the Energy Act.
Under Section 17(7)(e) of the Energy Act, the ERO does not have subject-matter jurisdiction to adjudicate on disputes from contracts the subject matter of which is not the provision of the electricity, gas or thermal energy supply service. These may primarily include contracts for the purchase of an item or for the provision of other services outside energy (such as the provision of various advisory services in the energy sector, of telecom services, etc.).
Furthermore, the ERO does not have subject-matter jurisdiction to decide on claims for damages, for the surrender of unjustified enrichment, or for compensation for failure to keep the supply and service quality standards laid down in public notices 540/2005 and 545/2006. Following the procedure under Section 43 of the Rules of Administrative Procedure, the ERO drops applications containing such claims. These and other claims outside the ERO’s subject-matter jurisdiction have to be raised in an action brought before the competent court
Additional information about alternative resolution of consumer disputies with suppliers
The ERO is recorded in the European Commission’s list of ADR bodies in the energy sector; in the Czech Republic, it is such body under the Consumer Protection Act.
It is not just any problem with licensees concerning electricity, gas or thermal energy supply that can be regarded as a consumer dispute within the ERO’s competences. The ERO has subject-matter jurisdiction only for considering and adjudicating on consumer disputes over the performance of a contractual obligation or the declaration of the existence of a legal relationship under Section 17(7)(e)(1) and (2) of the Energy Act.
Proceedings on consumer disputes are conducted under the Rules of Administrative Procedure; in the proceedings, documents are written in Czech and, if applicable, in Slovak.
The customer’s application triggers adversarial proceedings; the application must contain the required details under the Rules of Administrative Procedure (Sections 37 and 45).
Submitting an application for commencing a consumer dispute is not subject to any administrative fee.
- The administrative authority (i.e. the ERO) awards the costs of the effective exercise or defence of a right to the party that has been fully successful in the case, against the party that has failed in the case; where a party has achieved only partial success in the case, the administrative authority can split the cost award, or decide that none of the parties is entitled to receive compensation for costs; even if a party has achieved only partial success in the case the administrative authority can still award full costs to the party if the lack of success concerned a relatively negligible part of the case or if the decision on the amount of costs depended on an expert opinion or the administrative authority’s discretion.
- In the event of failure in the case, the consumer may be required to compensate the licensee for the costs if the consumer was represented by a solicitor.
The proceedings result in a decision on the merits. The decision becomes binding on the parties to the dispute at the moment when it becomes final. A final decision on the merits is enforceable where the parties to the proceedings fail to execute it of their own accord.
- The time for delivering a decision in a dispute commenced upon the consumer’s application is 90 days, and in particularly complex cases it is 120 days; alternative resolution of consumer disputes takes four months on average.
A remedy (remonstrance, i.e. appeal) can be lodged against the decision, and the ERO Board decides on the appeal; pending the decision on the appeal, the decision on the merits is neither final nor enforceable.
The applicant can discontinue his/her involvement in the consumer dispute by withdrawing his/her application when, in the meantime, the subject matter of the dispute is resolved in talks with the licensee or when the customer is no longer interested in having the dispute considered and adjudicated; the proceedings are then discontinued.
If the subject matter of the application is a matter the resolution of which does not fall within the ERO’s subject-matter jurisdiction, such application is either dropped or referred to the competent administrative authority.
The required details of the application to commence proceedings
The required details of the application to commence proceedings are laid down in the Rules of Administrative Procedure (Sections 37 and 45)
- Designation of the parties to the proceedings
- The applicant: First name and surname, date of birth, and address of permanent residence;
- The respondent (holder of a licence for electricity and/or gas trading or thermal energy distribution under the Energy Act, which is a supplier of electricity, gas or thermal energy): Name, Company No./Reg. No., and address of the registered office.
- A comprehensible and factual description of the problem concerning electricity, gas or thermal energy supply
- Proposed decision: what specifically the applicant seeks
In the case of demanding the performance of a contractual obligation by the licensee, the applicant should specify – accurately, intelligibly, and explicitly – the contractual obligation the performance of which the applicant requests the ERO to impose on the licensee. - Signature by his/her own hand
- Annexes
Annexes to the application should include all the documents concerning the problem, primarily the contracts and amendments/addenda thereto, the general terms and conditions of the supply, billing, the customer’s unilateral acts taking the form of contract termination or rescission, notification of no interest in extending a fixed-term contract, documents showing communication with the licensee, and any other documents relevant for the case.
- The application should be designated as an ‘application for adjudication on a consumer dispute’ and sent to the ERO as follows:
- By post, to Masarykovo nám. 5, 586 01 Jihlava, or
- by e-mail with an advanced electronic signature, or
- to the ERO’s data mailbox eeuaau7
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