Introduction
Many consumer disputes can be settled outside the courts by the Disputes Committee (Geschillencommissie), a form of alternative dispute resolution organised by sector. That is usually faster and cheaper than proceedings before the court, but the decision has a special character and can be challenged only to a limited extent.
Binding advice and jurisdiction
The Disputes Committee decides by binding advice, a form of the settlement agreement (Article 7:900 DCC): the parties are bound by the decision as if they had agreed it themselves. The committee has jurisdiction where the trader is affiliated with the relevant sector organisation or has otherwise submitted to the committee. Without such affiliation, only the route to the court is open.
The relationship to the ordinary courts
If the consumer chooses the Disputes Committee, the route to the court over the same dispute is in principle closed. Conversely, the trader cannot simply set aside a binding advice. The choice between the two routes is therefore important and depends on the nature and size of the dispute.
Challenging a binding advice
A binding advice can be challenged only to a limited extent: only where being bound by it, in connection with its content or the manner in which it came about, is unacceptable by standards of reasonableness and fairness (Article 7:904 DCC). The court reviews this with restraint, mainly on the manner in which the advice came about and its reasoning; a different view on the merits of the outcome is not enough. That a defect in how it came about can lead to annulment is shown by a case in which a binding advice on a valuation was set aside for breach of the right to be heard (Supreme Court 2 June 2023, ECLI:NL:HR:2023:822).
What decides the outcome
The outcome is determined by the jurisdiction of the committee and, on a challenge to the advice, by the strict standard of Article 7:904 DCC. A party considering going to the Disputes Committee, or wishing to challenge a binding advice, weighs in advance the consequences of that choice for the route to the court.