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Civil Aviation Authority consults on dispute resolution

Consultation means listening and reacting – but have they done that?

When consumers have a problem getting a refund from an airline they can go to an Alternative Dispute Resolution (ADR) provider, who will decide whether the consumer or the airline is right in a dispute. The decision is binding on the airline. The current system is not working well and is under fire from a number of consumer champions/organisations to improve.

Consultation takes off

On 17 July 2020 The Civil Aviation Authority (CAA) launched a consultation on ADR which closed on 25 September 2020. The ADR process is meant to ensure that passengers have a place to go to arbitrate in cases where the airline and consumer are in dispute. In October consumer champion Helen Dewdney revealed that the CAA had not informed any stakeholders such as the Ombudsman Association for which all Ombudsmen are members nor other consumer rights bodies. When this was brought to the CAA’s attention it extended the deadline although it still did not inform stakeholders despite saying that stakeholders had not received the original consultation due to an IT error. [1]

The findings report was published [2] on 18 February 2021 and the responses were published in full on 4 March 2021.Aeroplane in sky with clouds

Does CAA favour the airlines?

The CAA was criticised for not consulting with consumers but it attempted to justify this decision saying that “The CAA does not consider that pausing the process to issue a public consultation is proportionate in the circumstances or will achieve the speedier outcomes for consumers that the ADR scheme is intended to achieve.” And yet it consulted solely with the airlines, which is clearly biased

It would appear that the CAA has in fact completely ignored all consumer voices. There were 13 responses and 8 were published in full: A response from one of the two ADR providers, one airline, 4 consumer champion individuals/organisations, the Ombudsman Association and the Rail Ombudsman, which operates the only current Ombudsman scheme in travel (Rail). All the consumer champions, including Which? and the Northern Ireland Consumer Council, called for there to be a single ombudsman.

The CAA has consistently refused consider a single Ombudsman, despite concerns being raised by Which? [3]  the Ombudsman Association and in the Ombudsman Omnishambles and More Ombudsman Omnishambles reports. [4]

For example, in its response to the consultation, The Consumer Council Consumer Panel said:

“Although placed on the Citizen Space of the CAA website, it has clearly not been drafted or presented with citizens or consumers in mind. There is little excuse for this. The substantive proposals have been under consideration by the CAA for nearly a year. This is nevertheless a public consultation and the CAA should be and be seen to be consulting everyone: ADR schemes, airlines and airports, consumers, consumer organisations, and other stakeholders such as claims management companies and specialist lawyers and legal firms.

Charging a fee – adding insult to injury?

ADR entities are allowed to charge consumers a fee (£25), returnable if the consumer wins the case. This has been criticised, as it acts as a barrier and could put consumers off using the service. In its response the CAA said:

“The CAA acknowledges that there is an ‘in principle’ argument that ADR should be free to the consumer at all times. In traditional regulated sectors, such as financial services, energy, etc, where participation in ADR is mandatory for businesses, it is more straightforward to implement ADR in a way which is free to consumers at the point of use.”

However, this is NOT the case. Other voluntary schemes, such as The Motor Ombudsman and Dispute Resolution Ombudsman, are voluntary schemes and do not charge.

This position from the CAA is one that you would expect from a trade association, not a regulator! They know it’s best practice but are clearly not going to do it!

Calls for a single Ombudsman in aviation

There have been calls from various stakeholders over many years for a single mandatory Ombudsman in Aviation. The CAA has stated that it feels that the ADR regulations prevent them from making ADR mandatory, or approving a single provider, and that neither can be achieved without legislation. Whilst legislation to appoint a single Ombudsman would be welcomed, it hasn’t stopped Ofgem adopting a policy position to only approve one provider, or prevented single mandatory ombudsman schemes being established in both the rail sector and the new homes sector in the absence of legislation.

A spokesperson for the Ombudsman Association said:

“Whilst we welcome the CAA’s stated desire to strengthen the current system of redress in the aviation sector, the small alterations they have proposed do not go far enough to meet the needs of aviation customers, as the OA and other organisations highlighted in response to their consultation. It is clearer than ever that a single mandatory ombudsman is required to provide effective redress in the aviation sector and to help drive the improvements that the CAA are trying to achieve. We will continue to engage with Government and other stakeholders on the need for a single mandatory ombudsman in the aviation sector.”

Kevin Grix is the Chief Ombudsman of The Dispute Resolution Ombudsman, which runs the Rail Ombudsman, operating now for nearly three years. He offered to share the experience of working with the Department for Transport, stakeholders, the regulatory body and members to set up a new scheme with the CAA. The Chief Ombudsman is the longest serving in the country and led on the creation of this new scheme. His preference is for a collaborative approach, eliciting buy in from companies and from consumers/consumer champions.

Grix says “It is no coincidence that regulated sectors in this country favour the Ombudsman model, not only because of the extra layers of protection that they provide – but also because of their now proven track record of helping industry to improve and raise standards. There seems little merit to me in resisting this model.

The Ombudsman Omnishambles report  and More Ombudsman Omnishambles both called for a single mandatory ombudsman per sector. The latter report in particular evidenced the higher standards required of an Ombudsman than any other ADR provider and called for the approval bodies to action this.

Which? was critical of the consultation too. It called for a more ambitious approach that included establishing single statutory mandatory ombudsman.

Citizen’s Advice has already called for mandatory membership of an ADR scheme for airlines in its April 2017 report Confusion, gaps, and overlaps. [5]

Independent review flawed

The consultation report states that in 2020 the CAA commissioned Verita to carry out an independent audit of the two CAA-approved ADR bodies for assurance as to the quality and consistency of decision making and to determine the extent to which these decisions are transparent.

However, Verita was a peculiar choice, given that is has no experience in undertaking research in the consumer arena. [6] The company undertook no research whatsoever with consumers, airlines or consumer organisations. It literally only looked at information given by the ADR providers! This approach is obviously flawed.

Helen Dewdney, The Complaining Cow, believes that the consultation was a complete whitewash:

“It is quite clear that the CAA restricted who was able to respond and then completely ignored anyone who spoke on behalf of consumers. The CAA should be impartial and not favouring airlines. There appears to no reason why there should not be a single Ombudsman for airlines. A single mandatory Ombudsman would reduce confusion and provide higher standards for all stakeholders, including businesses and consumers.”

References

[1] CAA launches consultation and tells no-one…

[2] CAP2104: Amendments to the CAA’s policy for ADR applicants and approved ADR entities (CAP1324) CAA Decision

[3] Which? related articles

https://www.which.co.uk/news/2020/10/more-airline-passenger-misery-as-court-cases-could-take-years/

https://www.which.co.uk/news/2019/10/easyjet-passengers-lose-out-in-compensation-merry-go-round/

https://www.which.co.uk/news/2019/10/hundreds-of-ryanair-complaints-rejected/

https://www.which.co.uk/news/2018/05/passengers-still-having-to-fight-for-flight-delay-compensation/

Which? press release where it called for a travel ombudsman:

https://press.which.co.uk/whichpressreleases/which-calls-for-overhaul-of-broken-airline-complaints-system-to-restore-damaged-trust-in-the-travel-industry/

[4] Ombudsman Omnishambles:  Serious unresolved issues affecting the operation of the ombudsman ADR system in the UK  and More Ombudsman Omnishambles: The UK ADR landscape 20 months on…

[5] CAB 2017 report Confusion, gaps, and overlaps.

[6] Independent expert audit of CAP 2104 Amendments to the CAA’s policy for ADR applicants and approved ADR entities – CAA Decision February 2021

The CAA consultation response CAP2104: Amendments to the CAA’s policy for ADR applicants and approved ADR entities (CAP1324) CAA Decision

The 8 responses published in full CAP2116: Responses to CAA Consultation on Policy for ADR applicants and approved ADR entities, CAP1324

 

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ADR Ombudsman Latest News

CAA launches consultation and tells no-one…

Press release

Airline regulator goes hush-hush – Does it want opinions or not?

The Civil Aviation Authority (CAA), the UK’s airline regulator, recently launched a consultation. But decided not to tell anyone about it…

On 17 July 2020 The Civil Aviation Authority (CAA) launched a consultation on Alternative Dispute Resolution (ADR) which closed on 25 September 2020. The ADR process is meant to ensure that passengers have a place to go to arbitrate in cases where the airline and consumer are in dispute.

Yet, despite launching the consultation, it seems that the CAA decided not to publicise it nor to seek input from the most important stakeholders, airline passengers!

The CAA says that they would only consult with CEDR and AviationADR, the two existing providers of ADR for UK airlines.

“We would not typically consult airlines or airports as they are not the regulated entities in this situation”, says the CAA website “However, given the interest expressed by a number of airlines in the proposed changes, in this case we have decided to extend the consultation to include airlines and airports.”

It is clear from this statement that they don’t see it, nor did they market it as a public consultation. There is no reference to the consultation in their social media feed at all and no press release was sent out.

Aeroplane in sky with clouds

Airlines have their say… or not?

British Airways, a member of the CEDR scheme, did not want to make a statement regarding the consultation or Which?’s call for a single Ombudsman instead of AviationADR and CEDR.

A spokesperson for Ryanair, which was previously a member of AviationADR and is no longer a member of any scheme, said

“These claims are completely baseless and this is nothing more than yet another cheap publicity stunt by Which? There are no Aviation ADR claims outstanding and Ryanair meets all of its obligations relating to EU261.  In the small number of cases where claims are rejected we refer passengers to the CAA’s Passenger Advice Complaints Team (PACT) or the European Commission’s Online Dispute Resolution (ECODR) service”

Passenger refund shame

There has been widespread condemnation of airlines not providing refunds for flight cancellations during the pandemic and equal criticism of the CAA for not doing enough to hold airlines to account. A new chairman, Stephen Hillier, started on 1 August 2020 and appears so far to have done nothing to improve the situation.

Whom did the CAA consult?

The question as to whether consumer champions, individuals and organisations were consulted remains unanswered but it is known that bizarrely the Ombudsman Association (OA)  was not notified. Despite being the professional organisation for ombudsman schemes and complaint handlers, their staff and others interested in the work of independent complaint resolution were not notified. One would expect that such an organisation would have been consulted about best practices in complaint handling by ADR providers.

The OA was identified as having higher approval criteria standards than the Chartered Trading Standards Institute (CTSI) and the Civil Aviation

Authority (CAA) both of which approve ADR providers. This was outlined in the Ombudsman Omnishambles report in 2016 and in More Ombudsman Omnishambles, published 20 months later, which revealed serious unresolved issues affecting the operation of the ADR sector in the UK. The CAA was amongst those highlighted as failing the customer in this report.

Helen Dewdney, The Complaining Cow, consumer champion and co-author with Marcus Williamson of the investigation reports, is not surprised by the latest revelation. “The CAA’s approach to consultation is flawed and blinkered. It’s almost as if they don’t want to hear the changes and recommendations from the people who are best qualified to suggest improvements, the passengers themselves!”

Currently there are two ADR providers in the UK, CEDR[1] and AviationADR[2]. Membership of an ADR body is still not a legal requirement for UK-based airlines.

The OA joins Which? and other consumer champions in the call for a single robust dispute resolution service in the airline sector. Which? believes that the ADR provider should be an ombudsman.

Donal Galligan, CEO of the OA, said:

“There are numerous examples from various sectors that what works best for both consumers and driving improvements in an industry is a single mandatory ombudsman. The evidence that Which? have collated clearly shows that the CAA’s experiment with non-mandatory, multiple providers, some of which charge a fee to access that service, has not delivered for either consumers or the aviation industry. It is time that the UK Government mirrored their own approach in rail, energy, and new homes, and drive the establishment of a single mandatory aviation ombudsman.”

When things do go wrong with travel it can be highly disruptive for passengers, regardless of the mode of transport.

The Rail Ombudsman, which was also another stakeholder not informed about the consultation, is the only approved Ombudsman operating in the travel sector. It was established in 2018 and has operated to the satisfaction of passengers, industry and other stakeholders since. Their remit is underpinned by the regulator which means that passengers can rely on its decisions if things go wrong.

Kevin Grix, Chief Ombudsman at The Rail Ombudsman, said “As an Ombudsman we have a wealth of knowledge and understanding and we would be pleased to share our views and recommendations with colleagues at the CAA to help cure any defects with the system”.

The CAA were asked to comment but failed to respond by the deadline given.

The Department for Transport were asked to comment but refused, passing the request onto the CAA.

Which? has said that

“The government must ensure that passengers’ needs are front and centre in its aviation recovery plan, starting with the introduction of a mandatory, single ombudsman scheme for airlines, as a first step to restoring trust in the sector.”

Dewdney agrees, saying that “The new CAA Chairman should be taking a much stronger lead and ensure that the mess that is the current ADR provision is fit for purpose. Problems and failings with ADR providers and the monitoring and regulation have been highlighted for more than three years, so overhaul is long overdue.”

CAA acknowledge error in consultation

Update 08 October 2020. Later today when the article was published the CAA sent this statement ” We were recently made aware that, due to an IT error, a small number of interested parties had not received an email alert about this consultation going live and therefore had not responded when the consultation closed. Given the importance of this matter, the Civil Aviation Authority will be reopening the consultation for a six week period from Friday 9 October 2020 in order to allow for further responses to be considered as we continue to improve the ADR service for consumers.” This statement was in response to my sending a link to this article and not to the request made a week previous.” I do not call every Ombudsman in the country, consumer champions and the general public a “small number”!

Update 09 October 2020. The consultation is on the website with the deadline extended but they still haven’t informed stakeholders. No press release, no emails, nothing on social media. Weird right?

Notes 

[1] CEDR is the Centre for Effective Dispute Resolution which provides conflict management, ADR, mediation and training. It is a not for profit charity.

[2] AviationADR is part of Consumer Dispute Resolution Limited, owned by Dean Dunham, who was identified as a provider of concern in the Ombudsman Omnishambles and the More Ombudsman Omnishambles investigation reports.

Thursday 8 October 2020 is International Ombudsman Day, which aims to improve the awareness and educate the public about the history and practices of ombudsmen.