22 Oct 2021

Does the New Act Provide Greater Consumer Protection Opportunities?

On September 9, 2021, the National Assembly of the Republic of Serbia adopted a new Consumer Protection Act (“Act”), which entered into force on September 19, 2021.  The Act shall become applicable three months following its entry into force i.e. on December 20, 2021 (save for the articles regulating out-of-court settlements of consumer disputes, which shall become applicable six months following the entry into force i.e. on March 20, 2022).

The Act’s main objectives are the improvement of consumer protection, more efficient implementation of statutory solutions and the comprehensive harmonization of consumer rights in Serbia with EU consumer protection law, in order to appropriately respond to the latest challenges in the global market.

The new legal solutions transpose certain provisions of adopted EU directives, primarily the Directive on Alternative Resolution of Consumer Disputes into Serbian consumer law

Out-of-court settlement

Although the previous act also provided the possibility of out-of-court consumer dispute settlements, the practice had hardly taken root.  The main reason should be found in the fact that there was no duty of merchants in this regard.  Therefore, the new Act establishes the obligation for merchants to participate in the procedure of out-of-court consumer dispute settlements. Additionally, at the point of sale merchants are obliged to display a notice visibly and clearly at the sale point which states they are obliged by law to participate in such settlements. If they do not comply, they shall face misdemeanor liability and a fine of 50,000 dinars.

Disputes will be conducted by specialized bodies whose work is free of charge for the parties, so they will only have to pay for attorney costs, travel costs, etc. which each party shall bear for itself.

It is important to point out that the previous act’s 500,000 dinar census on dispute value has been scrapped, meaning that even higher-value cases can now be settled out of court.

The procedure before the specialized body can be initiated by the consumer as long as they had previously complained to the merchant.  The consumer submits the proposal to the Ministry, which forwards the proposal to the competent out-of-court settlement body.  The procedure is deemed to be initiated when the body receives a proposal from the consumer.  The body shall deliver the proposal to the merchant with a notice to state within 15 days whether it recognizes or disputes the consumer’s proposal.

Initiating and conducting the procedure of an out-of-court settlement of a consumer dispute does not exclude or affect the judicial exercise of the right or the right of the consumer to claim damages in court proceedings.  The consumer does not pay court fees for the lawsuit and the verdict if the value of the subject matter does not exceed 500,000 dinars.  A consumer dispute may also be resolved before arbitration when the consumer and the merchant conclude an arbitration agreement after the dispute has arisen.

Prohibitions of intrusive practices

This Act underlines the prohibition of intrusive business practices, and especially the prohibition of calling consumers whose telephone numbers are entered in the register of consumers who do not want to receive calls and messages by telephone. It is prescribed that Ratel will be in charge of updating this list at the request of consumers (made on the prescribed form) and free of charge

These novelties indicate a faster and more efficient resolution of consumer disputes, but above all numerous additional opportunities to resolve consumer disputes peacefully.