Judges are advised to recommend consumers and banks to have their court disputes settled amicably. Around 60 judges coming from tribunals, district courts and Courts of Appeal in a number of counties of the country attended the Conference organised by the National Institute of Magistracy (NIM) and the Alternative Banking Dispute Resolution Centre (ABDRC): “Consumer Protection: How to Choose between Alternative Resolution of Disputes and Court Proceedings?”

Judges may recommend the parties to go for alternative resolution as early as the first hearing, since this would reduce the courts’ burden of long and costly proceedings, for all parties involved. Over the last three years, close to 600 disputes, already pending before 20 courts across the country, ended up being eventually settled out of court, most of which in Cluj, Bucharest and Mures.

Alexandru Paunescu, Legal Director of the National Bank of Romania (NBR) and Chairman of ABDRC Steering Board: “In many cases decided by the Court of Justice of the European Union, we see references to alternative procedures and this is an additional reason for the national courts to do. For instance, in a judgment handed down last year (n.n. C-35/22 – par. 7 and 8 – Unfair terms in consumer contracts, commenced in 2022 between a bank and two consumers of Malaga, Spain), the European Court produced a number of arguments in favour of out-of-court settlements. These could become good practice models to be replicated also by the national courts. Thus, the CJEU argues that national courts should direct their resources towards disputes beyond amicable settlement. “In this way, cases which can be settled out of court will not take up time and resources that must be devoted to other cases in which the intervention of the judiciary is essential.” reads the CJEU judgment. The European Court underlines that this is an approach that first and foremost benefits the consumer since “since litigation is a slow and expensive way of settling the disputes in which consumers become involved, and one that is not without its risks (missed hearings, limitation of proceedings, etc.)”.

We urge Romanian judges to make consumers and banks already involved in, or at the onset of, a litigation between them, aware of the possibility of referring that dispute for amicable resolution via ABDRC. The courts across the country have already adopted this practice. It started in 2021 at the initiative of a 2-3 banks, for now to come close to 600 trials ended out-of-court, by conciliation.”

Viorel Badea, Deputy Director of the National Institute of Magistracy: “At a time when courts are sometimes overwhelmed by a high caseload, concerted efforts are required to render the judicial more effective, such as changes in staffing, mechanisms to deal with repetitive cases, or a more efficient use of technology. On the other hand, we should also rely on alternative dispute resolution in order reduce this caseload. In this respect, when it comes to banking disputes, ABDRC puts in place a specialised dispute resolution framework, characterised by swiftness and efficiency, particularly in terms of costs. Where alternative dispute resolution is supported and advanced, the volume of litigation pending before courts can be reduced and public confidence in this more efficient way of resolving disputes can be increased. We, as an institution dealing with the professional training of judges and within the scope of our legal powers, have committed to make a contribution to a more efficient justice by designing and delivering training programmes intended at rendering the judicial practice more consistent, and at developing the knowledges/skills of judges.”

Valeriu Stoica, Professor, Attorney-at-Law and NIM trainer: “Is there anything that judges can do when it comes to choosing between court proceedings and alternative resolution? I believe it is, and it’s name is judicial education! Its purpose is to open the eyes of litigants to an avenue of out-of-court conciliation. It is only natural that there should be diversity of opinion and hence disputes, but diversity also implies some level of compromise. Social harmony must be restored through diverse mechanisms. The more defusing valves are there to relieve the tensions between people, the faster social harmony can be restored. When such only valve is justice, it risks exploding sooner or later. In such a setting, compromise itself becomes a contract between the parties. That’s why not every dispute needs to go straight to court, where there is no room for compromise anymore and the sentence is handed down a judge. We must always have pre-trial procedures allowing for a chance to compromise. ABDRC’s important role in taking some of the burden of the disputes between consumers and banks off the courts should not remain an one-off example. Such Centres should be in place for any industry, since the outcome of their work benefits both the consumers and the professionals or the judiciary at large.”

Nela Petrisor, ABDRC Conciliator, a former judge with the High Court of Cassation and Justice (HCCJ), and Attorney-at-Law: “In an alternative to court proceedings, negotiation and compromise are the medicines we take in an attempt to treat the default risk. The discretion of the procedure conducted via ABDRC makes the consumer feel more secure and comfortable before a conciliator than before a judge. And this although, from a strictly formal point of view, the final product, being the decision issued by a conciliator, enjoys the same power a judge’s ruling. For sure this stems from the fact that the conciliation procedure helps the contract survive, whereas a court judgment announces the irreparable divorce of the parties to a dispute.

The biggest gain is the resolution time, which is incomparably shorter in a conciliation procedure than in a trial. We have had cases resolved within a week’s or even a day’s time with ABDRC. In court, while we get justice, if it comes too late, it can easily turn into an injustice. There is no consistent caselaw in conciliation. And there couldn’t be any, either. The solutions we come up with are one-of-a-kind, not “serial products”. And even if a decision issued within ABDRC has the same power as a court judgment, one does not need dozens of pages to word it, and it contains no facts whatsoever because it keeps negotiations confidential. And it can be enforced as soon as worded, because it is never challenged. We have no appeals or second appeals. A conciliator’s solution, unlike a judge’s ruling, makes both parties happies and is accepted by both the consumer and the bank. In other words, with negotiation and compromise, the parties’ twisted cut is favoured over the magistrate’s fair judgment.

Amelia-Raluca Onișor, judge with Bucharest Court of Appeal and NIM trainer: “The conciliation-based alternative banking dispute resolution brings about undeniable benefits for both consumers and the courts of law. On the one hand, parties have a way to settle a dispute incurring fewer costs, and in way shorter time periods than before a court. The stress attached to the uncertain outcome of a court proceeding, the long time and the related costs can be significant. Through conciliation, parties reach a mutually beneficial agreement with less conflict-triggered stress. On the other hand, for the judiciary, conciliation helps render justice more efficient and of better quality by reducing the case backlog of the courts. This per se is proof that the solution provided by ABDRC to address banking conflict is both viable and beneficial.“

Radu Rizoiu, Honorary Conciliator with ABDRC and University Professor: “The Nordic countries or Germany, for instance, share the practice of judges suggesting the parties to come to terms before going to court, particularly when there are no matters of life and death at stake. In Norway, the judge even points to the parties which matters could be addressed without their intervention, and this is not qualified as pre-judgment. It is just a form of support that they provide the parties with in order to reach a consensus. In Germany, I came across cases where the judge, who had already got acquainted with the case before the first hearing, gave the parties time to come to terms. I do believe that the courts have the tools to do more than just enforce the law, particularly when the ratio disputes-to-population is very high. In Romania, for instance, we have more than 6 disputes per 100,000 consumers, which is 3 times the European average. The conciliation and court mechanics can work very well together, meaning that they are not mutually exclusive. After all, one cares less about witnessing a thorough application of the law, and more about seeing their problem solved. When the outcome is good for them, how that outcome has come about matters less. This is why judges can ask a very simple question in the very first hearing: Have you tried conciliation? If they haven’t, judges should recommend this alternative avenue and only if it does not have the desired outcome, they should come back before the judge.“

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  About ABDRC: ABDRC is an entity set up under a European Directive, and intermediates, free of charge and in not more than three months, negotiations between consumers and banks or NBFIs, for contracts/agreements in progress. Consumers from any county of the country may file applications with the Alternative Banking Dispute Resolution Centre (ABDRC) filling-in an online form directly on the website www.csalb.ro. Once the bank accepts to enter the conciliation/negotiation procedure, a conciliator is appointed. ABDRC works with 17 conciliators, of the best specialists in law and with relevant experience also in the financial and banking field. Everything is settled amicably, and the understanding between the parties has the power of court judgment. More information about the work of the Centre is available by phone at 021 9414 (charged a normal rate).