Consumer Relations: The Executive Branch Introduced a Bill on Conflict Resolution

On August 5 the Executive Branch introduced three bills before the Senate concerning Consumer Relations in order to create a Conflict Resolution System, the creation of a Price Observatory and the amendment of the current Supply Law (also see “The Executive Branch Pushes for Reforms to the Antitrust Law” and “The Executive Branch Pushes for Reforms to the Supply Law” in this edition of Marval News). The purpose of these initiatives is to give effective solutions to the Consumers’ problems, by creating fast track proceedings.
The procedure related to the Conflict Resolution System is described below.

1. Mandatory Conciliation Service for Consumer Relations (“COPREC”)
The first stage of this proposal creates the COPREC, which will attend individual claims initiated by consumers in relation with consumers’ claims (established in the Consumer Protection Law) in which the amount does not exceed the equivalent value of 55 index-linked minimum wages (ARS 198,000; approx. USD 25,000) and shall be a prior mandatory requirement before initiating any complaint before the Federal Justice in Consumer Relations –to be created- by said law. The COPREC will report directly to the Secretary of Commerce which will be the enforcement authority and shall take action at a national level.
The procedure will be free of charge for the consumer and a hearing will be held for the parties to reach an agreement. It is mandatory for the parties to attend the hearing under the penalty of considering the process concluded to the plaintiff or imposing a fine on the defendant, of which a partial amount will be awarded to the consumer. Negotiations will take place within 45 days. If the parties reach an agreement the Secretary of Commerce will proceed to approve it (it may make any comment it deems appropriate). The approved agreement is be enforceable within the legal system.
The law provides for the creation of a Finance Fund to satisfy notifications costs and conciliator fees, in the event the parties do not reach an agreement. The fund shall be constituted by the fines imposed for non-attendance or non-compliance with the terms of the approved agreement and approval tariff.

2. Audit of Consumer Relations
This procedure initiates once the requirement of stage 1. above is completed, without prior agreement or non-attendance of the defendant. Both parties may have legal representation, and the consumer may be assisted by the representatives mentioned in the Consumer Protection Law (consumer protection organizations, public prosecutor, etc.).
The Auditor of Consumer Relations –who must be a lawyer among other requirements- will hear cases of liability for damage (according Section 40 and 40bis of the Consumer Protection Law) under 15 index-linked minimum wages (ARS 54,000; approx. USD 6,500) and will report directly to the Ministry of Economy and Public Finances. They shall be duly established as an independent authority, and as an administrative instance.
After receiving the claim, both parties are summoned to a hearing where the evidence shall be produced. The Auditor must confirm –ex offitio– the material truth and then render a decision within five days after the hearing. The Auditor may decline to exercise competence on the grounds of the complexity of the case, enabling the Consumer to proceed before the Federal Justice for Consumers’ Relations (see 3. below). The decision of the case can be challenged before the Federal Court of Appeals for Consumer Relations –to be created- or before the corresponding Federal Court of Appeals. Legal representation is required for appealing.

3. Federal Justice for Consumers’ Relations
This justice shall have jurisdiction in Consumer Relations cases included in the Consumer Protection Law as well as any other legislation ruling on these relations that has not established a jurisdiction and that at the time of the initiation of the claim does not exceed the amount equivalent to 55 index-linked minimum wages.
Eight Trial Courts and one Court of Appeals will be created, all located in the City of Buenos Aires.
The process shall not exceed 60 days, it will be free of charge for the consumer and shall adjust to the following procedural rules: (i) evidence shall be offered in the claim and in the response (a proof of evidence after primary disclosure of interview transcripts is not allowed and only three witnesses per party are allowed); (ii) preliminary motions, peremptory challenge and counterclaim are not admitted, (iii) in principle, the legal term will be of three days, except for answering the complaint, filing the appeals and the answer the ground for appeal, which will be of five days; (iv) at a public hearing, the judge will try to achieve conciliation between the parties, otherwise, he/she will produce all the evidence and render a decision (if evidence cannot be produced, another hearing shall be held where the decision will be rendered); (v) only the decision and any refusal of a precautionary measures are subject to appeal; and (vi) any payment to the consumer will be made effective by legal deposit under penalty of absolute nullity.
It is important to underline that within this stage, punitive damages may be granted by these courts regardless of the cap established for filing.
Decisions of both the Auditor and the judge which imply fines or compensation under five minimum wages (ARS 18,000; approx. USD 2,300) will not be subject to appeal. If the amount of the fine is higher, the parties may appeal the ruling before the National and Federal Court of Appeals in Consumer Relations.
Once enacted, the proposal provides the new Courts to be created within a maximum period of 180 days.
Finally, the bill amends several related laws’ provisions.