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Passenger treatment to be fairer under Government proposals

Will changes bring fairer system for airline passengers?

The Government is proposing changes to the current EU Denied Boarding Regulations (EC261). Aviation Consumer Policy Reform consultation.  These regulations, in place since February 2005, entitle passengers to significant rights if their flight is delayed, cancelled or they are denied boarding. Travellers are entitled to fixed amounts, depending on the length of the flight and delay or cancellation.

The Government proposes to change this to allow claims for compensation based on the length of the flight delay and linked to the cost of travel. Currently this varies from 2 hours late for trips up to 1500km up to 4 or more hours late trips over 3,500km. Rates range from 125 Euros up to 600 Euros.

I believe the current system buys into the ‘compensation culture’. Genuine redress and goodwill gestures should be proportional to the amount spent but the current regulations do not take this into account and therefore low cost airlines are hardest hit. A fairer system for both business and consumers has to be a good thing. Although it may save airlines money the devil will be in the detail of any changes. Increases would risk increases in fares. It looks set to be percentages in line with rail and ferries. But the savings the airline make need to be spent on improvements for consumers not line the pockets of the airline shareholders.

ADR in the airline sector

The Government is also considering making Alternative Dispute Resolution (ADR) mandatory for airlines. Currently there are two voluntary schemes in the airline sector. Consumers can take a complaint to an ADR provider and the company is bound by the decision, although the consumer isn’t.

Consumer bodies such as Which? have been calling for ADR in the airline sector to be mandatory for some years. In the CAA consultation on ADR in October 2020 Which? said

“… the CAA must ensure it makes the existing ADR schemes work better for passengers. The regulator should step up scrutiny of existing ADR bodies, and ensure greater transparency for the complaints handling process. It must also improve its requirements for data reporting and encourage airlines to act on their complaints data.”

Both Which? and I have previously recommended that the ADR provider be an ombudsman as this is appointed and monitored to a higher standard than other ADR provider schemes. (See Further information about ADR below.)

Airline Travel Assistance

There are also proposals to improve the travel experience for disabled travellers including by ensuring that travel assistance is always free and removing charges for wheelchairs and mobility equipment. I welcomed the proposed changes, saying that in general the proposals will bring greater equality to all travellers.

Further information about ADR

See More Ombudsman Omnishambles: The UK ADR landscape 20 months on… by Helen Dewdney and Marcus Williamson. February 2018 and Appendix J. This is an extract from the minutes of the Ombudsman Association Executive Committee meeting, 5 May 2017 that demonstrates how the standards required to be an ombudsman are higher than for other ADR providers.

For more information on  see ADR research, articles, investigations, consultation responses and reports. over the last 7 years.

CAA launches consultation and tells no-one… consultation into ADR. CAA hadn’t informed stakeholders.

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ADR Ombudsman Business Latest News Laws Topical

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