Dispute with consumers: attention and awareness (Original)

Between the consumers and suppliers, the underdog is the latter whom the State and society is responsible to protect. For such purpose, the Ordinance No. 13/1999/PL-UBTVQH10 dated 27 April 1999 on the protection of consumers’ interests (“Ordinance”) has been promulgated. After 10 years, it shall be replaced by the new Law No. 59/2010/QH12 dated 17 November 2010 (“Law”). Such replacement is essence though late due to the significant movement of the Vietnamese economy, particularly consumption market, through years. Among the others, the regulations of dispute resolution between consumers and suppliers are substantially changed. Some distinguished issues are to be noted and discussed below.

The Law concretely provides dispute resolution approaches including: negotiation; meditation; arbitration; and court. Negotiation and mediation is less time consuming and complicated than the others while the negotiation is the least since there is no third party involved. Noticeably, only the awards and decisions of arbitration and court shall be enforced by state authority.  

Upon the request of consumers, a negotiation shall be triggered and must be conducted by the supplier within 7 business days from the date of request. Mediation shall be conducted if consumers and suppliers agree to select a third party mediator, individual or organization. When the Law is silent, it may imply under applicable laws that the parties may conduct mediation even if there is an arbitration clause. The mediator and the parties must ensure confidentiality of information relevant to the mediation, unless otherwise agreed by parties or provided by law.

Of note among the provisions of negotiation and mediation is Article 30.2. It reads that a dispute causing loss and damage to “many consumers” shall not be subject to negotiation or mediation. This provision may cause confusion because it is hard to determine how many people should be considered as many. Moreover, provided that a supplier is capable to hold negotiation or mediation with its consumers, one or many is not different. While these two approaches are much simpler and faster than arbitration and court, they should be encouraged as to save cost and time.

Where lawfully agreed, arbitration shall prevail court’s authority to resolve dispute between parties. Arbitration is a good choice than court due to its time efficiency and confidentiality. However the supplier should be aware when selecting arbitration. In case the arbitration clause is provided in general terms or standard agreements, a consumer may select court regardless of the effective arbitration clause.  In order for arbitration clause to be effective, the supplier must inform about the arbitration terms for the consent of consumers. This stringent requirement needs more guidance. It is unclear how the supplier shall inform the consumers and how the consumers express their consent. For example, it is likely impossible for supermarket or shopping mall to make notice and obtain consent from each individual consumer.

Court proceedings under the Law create another burdensome to suppliers. The Law sets forth a new doctrine called “civil consumer protection cases” where the plaintiff is a consumer or a social organization participating in consumer protection in accordance with the provisions of this Law. In such cases, the consumers shall be entitled to some noted favorable treatment. Principally, the consumers/plaintiff is responsible to prove the fault of the supplier in causing loss and damage. However, such proving responsibility is waived by the Article 41.1 of the Law. Instead, the suppliers shall have the onus of proving they were not at fault causing loss and damage. Moreover, a consumer as a plaintiff will not have to pay in advance the court fees and charges, unless and until it is declared the losing party. This likely supports the consumers to pursue a court proceeding in case that disputed amount is considerable.

We are aware of a new term “simplified civil procedures”. A civil consumer protection cases if satisfying conditions stipulated in Article 41.2 may be resolved in accordance with simplified civil procedures. It appears a promised mechanism to encourage consumers to initiate court proceedings, except the fact that the laws of Vietnam do not have such simplified procedures. Accordingly, Article 41.2 is implausibly implemented in practice till a corresponding reformation in Civil Proceedings Codes.

Together with other provisions of the Law, the dispute resolution provisions compel the supplier to be more responsibility in their consumption business to avoid unnecessary dispute. In such aspect, the underdog ultimately is the supplier. Hopefully in the coming time, guiding instrument for the Law may supply more concrete guidance or clarification so that the consumers’ rights and interest could be better guarded; otherwise at least above aware issues will be relieved.

One day, my junior colleague is assigned to write a memo on Law on Protection's Consumer. She consulted with me on the regulations of dispute resolutions between suppliers and consumers. This inspires me to carefully check about those regulations and this article is produced accordingly. This article may be not qualified to publish on any journal or newspaper since it is yet reviewed by my partners. You may find the published one at: Dispute with consumers: attention and awareness [Published].