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ADR: A Government consultation

On 20 June 2021 the Government finally published its consumer paper for consultation titled Reforming Competition and Consumer Policy. The closing date is for responses to the consultation is 11.45am on 1 October 2021.

The document is 147 pages long! So, I am going to do a summary/opinion piece on areas of the consultation.

I will start with Alternative Dispute Resolution (ADR). It can be complicated but over the last 6 years I have been recognised in the consumer world for my expertise and knowledge in the area and often get called upon in the media to talk about ADR due to this.

See ADR – all about it for World Ombudsman Day lists all my work in this area.

See Reviews: A Government Consultation and Subscriptions: A Government Consultation for response on subscription traps.

ADR falls within the section of Consumer Law Enforcement.

Marcus Williamson and I co-wrote two research reports on Alternative Dispute Resolution (ADR).

Report cover CDRL, CTSI, CAA, OA, Dean Dunham,The first was Ombudsman Omnishambles:  Serious unresolved issues affecting the operation of the ombudsman ADR system in the UK. (OO) in June 2016

The second was More Ombudsman Omnishambles: The UK ADR landscape 20 months on… in February 2018 (MOO). These were both highly critical of the Chartered Trading Standards Institution (CTSI) and of Civil Aviation Authority (CAA) in particular for their approval and monitoring of ADR schemes. Many of the issues raised in both these reports remain unresolved.

The Government is looking at examining ways to “mainstream” ADR, so it not seen as an alternative to court but becomes an integral part of the justice system. It currentlu aims to increase the scope of ADR and the rate of consumer disputes being satisfactorily resolved.

The consultation is looking at responses to three areas.

Summary of one section of the Reforming Competition and Consumer Policy consultation:

“Government believes a well-functioning ADR system can make markets work more effectively and drive economic growth, as it increases consumers’ confidence in spending and generates higher trader compliance with the law. However, responses to the Consumer Green Paper suggest that a number of improvements need to be made to improve the quality and scope of ADR so that it delivers for more consumers and businesses in all markets. In this chapter, government is seeking views on three specific improvements that were highlighted by respondents:

Improving consumer awareness and signposting – the current landscape for accessing redress is confusing and the process varies across markets. This is dissuading consumers from seeking private redress and enforcing their consumer rights.

Responses to the Consumer Green Paper said that consumers still find it difficult to understand their redress options, make the right choice for them and navigate the routes to resolving their problem, particularly if they are vulnerable.”

“Speeding up access to ADR  – In regulated markets, the majority of disputes are resolved within four weeks, but most regulators have typically set an upper limit of eight weeks for businesses to resolve complaints before consumers are entitled to take a dispute to ADR.

Government is looking for views on whether regulators should aim to set a significantly lower threshold for consumers to exercise their right to access ADR and if so whether exceptions could or should be made to allow more time to resolve complex cases.

“Improving the take-up of ADR by businesses in non-regulated markets – Business participation in ADR is particularly low in non-regulated sectors with a high number of SMEs and microbusinesses. This is concerning if those sectors are also ones where consumers are experiencing high levels of harm.”

The following is summarised from the policy. Pages 116 – 127 in the section titled “Supporting consumers enforcing their rights independently”

Improving Alternative Dispute Resolution

“Government proposes to require that all providers of consumer ADR are assessed and approved for their ability to provide an ADR service. Currently there are numerous non-accredited and unsupervised providers that offer dispute resolution on an informal basis alongside accredited providers.

Mandatory approval by the Competent Authority would mean that all providers operate to a common set of quality standards and oversight.”

It intends to strengthen the minimum service expectations of all ADR providers, focusing on four key principles to improve the quality of ADR – “neutrality, efficiency, accessibility, and transparency”.

“Government proposes to amend the ADR regulations, building on its existing framework to incorporate additional requirements for ADR providers, both as part of their initial accreditation and as part of their service provision to consumers and businesses. “These would include strengthening the accreditation process through the introduction of a ‘fit and proper persons’ test for key personnel to ensure that businesses owners, officers and senior management are suitable people to undertake those roles.”

It is generally mandatory for traders to participate in ADR schemes in the regulated sectors. For sectors where participation is voluntary, there is little engagement for a number of reasons. In the unregulated sectors, house and garden maintenance services, vehicle maintenance and repair services, and used cars are the sectors where consumers spend the most money so can receive the most harm.

“Government is considering a charge of £10-20 to consumers, with this being recoverable from the business if their case is upheld. There is a precedent for this in the aviation sector. “To address these concerns and deter frivolous or low value complaints, government is seeking views on whether ADR providers should be able to implement a lower limit on the value of claims. This would be balanced to ensure only higher value claims are in scope but not to significantly restrict consumers’ access to ADR.”

“Government is looking at incentivising businesses and consumers to use ADR on a voluntary basis. Responses to the Consumer Green Paper and further stakeholder engagement, showed that mandating ADR in would be significantly more effective than voluntary measures in ensuring access to affordable redress. Government is looking at making participation mandatory in the motor vehicles sector (to include the supply of new and used vehicles and servicing and repair) and in the home improvements market (such as roofing, glazing, plumbing work, or the fitting of flooring, kitchens, or bathrooms).”

“Government is considering requiring businesses in these sectors to pay for ADR on a pay per use basis but recognises that some businesses might find it more cost effective to pay an ADR provider on a subscription basis.”

“The UK has an established regime for addressing collective consumer harm and enabling consumers to gain collective redress when consumer law has been broken. This covers both public collective redress procedures, whereby regulators and the CMA can seek redress on behalf of consumers. Enforcers, such as the CMA, seek compliance with consumer law rather than taking representative legal action on behalf of consumers. The Consumer Rights Act 2015 strengthened routes for public enforcers to seek collective redress and government forsees the changes to make it easier and quicker for bodies to obtain redress on behalf of consumers.”

“Government is considering a range of options that will incentivise compliance and encourage businesses to use ADR. It is also looking at options that will disadvantage businesses that refuse to engage in an ADR process if the consumer eventually needs to take them to court.”

Helen Dewdney The Complaining Cow responses to the consultation Download

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Leon Livermore former CTSI CEO talks to The Complaining Cow

I talk with former CEO of Chartered Trading Standards Institute (CTSI), Leon Livermore, in a series of exclusive interviews. In the first one we discussed his achievements and challenges at CTSI. In the second we spoke about Alternative Dispute Resolution (ADR) and the criticisms of CTSI regarding monitoring and approval of providers. Today we discuss his criticisms of Government and what should be done.

Leon in his kitchen

Leon Livermore’s Criticisms of Government

In the Ombudsman Omnishambles reports, BEIS was heavily criticised for its “soft touch” and not doing enough to improve the ADR landscape. So, I asked Leon what his criticism of BEIS would be. He spoke more of Government as a whole rather than BEIS per se. He was then on a bit of a roll! He names the criticisms as:

  • A lack of clear coherent consumer strategy across Government
  • There’s a lack of proper joined up regulatory strategy across Government. He gave the example of horsemeat and although a consumer protection issue they were told that technically it is a food issue and they couldn’t talk to the Consumer Minister about it. He called for the Consumer Minister to work across government. “So yes, you might have to deal with many departments but let’s have the Consumer Minister actually being a Consumer Minister being that clear and responsible person where every single issue related to the consumer goes through that.”
  • “They need to stop throwing things at Local Government” The CTSI obtained all the pieces of legislation from the Chambers of Commerce. There were 256 pieces of legislation, the majority of which had come in since austerity. “Stop it. Stop that”. He calls for the Government to be honest and say that they are giving a statutory framework and not statutory duties. He calls on the Government to be honest about not being able to enforce it all.
  • Lastly, he wants the Government to stop shying away from difficult conversations. With a problem in how the country tackles enforcement, Leon looks at enforcement through product, place and people. Place, local government look at licensing if it happens in an area but most consumer protection is not like that anymore.
  • He uses Whirlpool again as an example of a elongated and complicated supply chain issue that is not restricted to product. The horsemeat issue wasn’t even in this country but the UK was a victim of food fraud. He points out that the wrong place to intervene in the market surveillance and customer safety is in shops but the resources go to the local level and criminals can easily cross boundaries.

What does Leon think should be done?

Leon acknowledges that we won’t get structural reform but has told the UK Government that it often advises a lot of countries on regulatory reform and regulatory structures but has have never advised any country to have a system like ours! You can’t have accountability for something like Whirlpool remaining with a poor council. “Stick the funding and accountability centrally and the delivery locally”, he says. This of course makes sense when you look at how consumers shopping habits and the development of businesses have changed. Believing this model to start to make sense, he wants the funding to be apportioned appropriately.

He wants this to come through in the Consumer Command Paper but does not want it to be lost in the cry for localism. Decisions should be made at a local level because, as he rightly points out, you wouldn’t want a Parish Council making decisions about a motorway but they do decide on footpaths. This is an area he believes that strong leadership is needed (like many others I would say!).

Few cases are taken to court because of the funding structure, we talked about the most recent one being the Birmingham Trading Standards and the Tesco strawberries! Local authorities just can’t take the legal action and it should be done centrally.

In short, there is a mechanism for working with local Trading Standards, so let’s use it.

He talked at length about how this could work and interestingly said that it was not about funding, they are used to funding go up and down but the “abject failure to set out a coherent strategy that says this is what we want to see from consumer protection and this is what we want to see from our regulators locally and nationally delivering on that.”

Former CTSI CEO discusses what his criticisms of Government are in relation to consumer protection

 

The priorities for consumers

Leon questions the priority given to consumers. It was four years ago that Leon gave evidence in Parliament about consumer protection post EU exit and three years that we had the Green Paper but we still hadn’t hadn’t had the Command Paper at the time of the interview. The announcement was released today, the  Covid aside, and making allowances for it, we are all consumers, we all spend money. Informed and confident consumers are really good for the economy.

This is underpinned by high quality information, businesses who know and understand their obligations, transparency in the system and really good quality regulation and principle based.

Having met regulators from other countries Leon believes that ours are amongst the best, the skills and competence we have are excellent. But it is just incumbent on the political senior leadership of this country to give it direction. This is what we want the system to look like, this is what we want it to deliver and this is the resource we will put into it. You as the deliverers are responsible for delivering it but it needs to be clear.

Leon can forsee another Whirlpool, Grenfell or horsemeat scandal if the strategy is not got right, so Trading Standards can’t intervene.

Former CTSI CEO Leon Livermore talks about the lack of priority for the consumer

 

Any advice for the new CTSI CEO?

Leon says simply that he should be in his own person and enjoy the role which has such a good social purpose with an excellent team.

He advises John Herriman, his successor, to use all the expertise and support around him. He even conceded that people like me who “moan at us but moan for the right reasons” are helpful to the CTSI cause. Although, I prefer the words “complain” and “challenge”!

Former CTSI CEO Leon Livermore provides some advice for his successor

 

And just what did Leon think of The Complaining Cow?

Having been a thorn in Leon’s side for a number of years, the question had to be asked… what did he really think?

Well, he never opened my emails on the way home and always waited until the morning! That amused me. But he said that, as a CEO, he didn’t want people to tell him he was right when he was wrong and wants people who don’t let go! He says that we need people like me “Who cut the crap!”

Leon strongly believes that with me as a passionate campaigner and him as a pragmatist that there will be an opportunity to change things and that we would not be far apart in what we want to see happen.

Saying the same thing but in different ways! Who knew?!

Although we still differ on some things in ADR!

Whilst at CTSI, former CEO Leon Livermore tells Helen Dewdney what he really thought of her...

 

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Helen Dewdney, The Complaining Cow Services. Workshope, power hours, consultancy, speaking and mystery shopping. See how Helen can improve your service and increase your sales and drop her an email!