Alternative Dispute Resolution: What it all means

Alternative Dispute Resolution

From the 9th July 2015 The EU ADR Directive was supposed to come into force. It was delayed until the 1st October. This compels the government to ensure that ADR schemes are in place.

ADR is a process that enables disputes between a consumer and a business to be settled via an independent mechanism outside the court system and can provide a quicker resolution. There are different forms of ADR:

Arbitration – an impartial and independent third party will decide how to resolve your dispute. In most cases, the arbitrator’s decision is binding and cannot be challenged in court. Costs vary and sometimes arbitration is free as with IDRS and ACAS services.

Adjudication – by ombudsmen (or ADR provider) and free to the consumer. Binding on the trader (they lose membership if don’t abide by the rules but this rare) but not on you should you not agree and want to take the matter to court.

Mediation/conciliation – remains confidential and cannot be used in a later court hearing. The cost varies: in some instances it’s free; in others, it can get expensive. By the very nature of the word “mediation” someone will work with you and the other party to reach a decision. If agreement is made and signed this is legally binding. You would only be to go to court to enforce it if necessary.

Negotiation – which is used most commonly in employment situations. You can choose to have a union rep or someone else present while you negotiate.

Generally, arbitration is binding on both parties to the dispute; mediation/conciliation and negotiation are non-binding; and adjudication and ombudsmen schemes do not bind the complainant, but will be binding on the other side.

Film recorded for Citizen’s Advice:

The Complaining Cow - when things go wrong

Guest posts by Ombudsmen

Why use the Financial Ombudsman?

Furniture and dispute resolution guest post.

Energy ombudsman shows how to keep heat on your supplier

The ADR appears to have let the flood gates open and the potential for an omnishambles of ombudsmen is upon us.

Problems in the ADR/Ombudsman sector

There are many issues regarding ADR and Ombudsmen providers. These are to do with the oversight by the approval bodies. See Government and regulators continue to fail on resolving consumer disputes and Landing in Court with Ryanair. These articles include links to reports (Ombudsman Omnishambles and More Ombudsman Omnishambles in particular). They also link to articles from Which? and The Independent that describe a number of problems which are not the fault of providers and provide  warnings about one provider, Consumer Dispute Resolution Limited run by Dean Dunham which runs RetailADR, UtitlitiesADR and AviationADR.

Alternative Dispute Resolution - approval and oversight in the loosest sense of the words...

 

Ombudsman Omnishambles

Update to this story Ombudsman Omnishambles: New report exposes serious failings in ombudsman approval and oversight

Further update Landing in court with Ryanair provides links to more reports, articles in the FT  and Which? regarding the mess.

New privatised system of Alternative Dispute Resolution threatens consumer complaints chaos -- but even its own implementation has now been delayed…

A new EU-mandated system of private ombudsmen which was due to come into force today, 9 July 2015, will not now be implemented until 1 October 2015. Private companies will then be handling consumer complaints in sectors including retail, aviation, furniture and property.

Under the new system companies would be obliged to point customers to private complaints-handling companies but would not be bound by their decisions.

Apart from the delay in implementation, there are many problems with the system as it is proposed.

For example:

  • There are two ombudsmen for the retail sector: One run by the company The Retail Ombudsman, the other by Ombudsman Services. There are also three ombudsmen for the property sector. This will lead to considerable confusion for the public. [1]
  • There are no criminal records checks for ombudsmen employees or directors: The company calling itself The Retail Ombudsman employs a convicted criminal as its communications director. [2]
  • One private company already running another ombudsman service pre-launched an Aviation Ombudsman without obtaining CAA permission. [3]
  • The CAA had previously confirmed that it would be winding down its own complaints scheme in favour of a privatised operation from 1 September 2015 (depending on certain conditions). [4]
  • There is no “ombudsman of ombudsmen” -- The body responsible setting up Alternative Dispute Resolution (ADR) schemes, the Trading Standards Institute (TSI), has no consumer complaints system.
  • The chairman of the trade body The Ombudsman Association, Lewis Shand Smith, is also the CEO of one of the ombudsman companies. [5]
  • When the law eventually comes into force from 1 October 2015, traders will be obliged to tell consumers where to go for ADR but are not obliged to use ADR services.
  • Update 12/10/15 Ombudsman services have set up a Consumer Ombudsman for “everything else” increasing the likelihood of more doubling up.

Asked about the retail ombudsman via Twitter in May this year, Sainsbury’s social media staff replied candidly.

 

Further details of these issues are available on request.

Marcus Williamson, Editor of the consumer information website CEOemail.com, says “These new companies are in this for the money and will be charging the companies whose customers are complaining. Those costs will inevitably be passed onto consumers through higher prices of products and services.”

More about CEOemail.com: http://www.ceoemail.com/ceoemail-faq.php
Email: ceoemail@connectotel.com

Helen Dewdney, Consumer Champion and author of the book “How To Complain: The ESSENTIAL Consumer Guide to Getting REFUNDS, Redress and RESULTS!”, says:  “This ongoing Ombudsman omnishambles is helping no-one and will only result in confusion for consumers. If an ADR regime is to work well for consumers it needs a single ombudsman per sector, a clear code of practice and independent oversight.”

More about Helen Dewdney: //www.thecomplainingcow.co.uk/
Email: helen@thecomplainingcow.co.uk

Notes
[1] For example: http://www.theretailombudsman.org.uk/ and
http://www.ombudsman-services.org/retail-and-other-sectors.html
[2] http://www.theretailombudsman.org.uk/contact/
Neville Thurlbeck, former News of the World chief reporter, was jailed for 6 months in July 2014 for phone hacking. The Trading Standards Institute has confirmed that criminal record checks are not necessary for ombudsman directors or staff.
[3] Screenshot available on request
[4] https://www.caa.co.uk/application.aspx?catid=14&pagetype=65&appid=7&mode=detail&nid=2446
[5] http://www.ombudsmanassociation.org/association-executive.php

Radio 4 appearance discussing ombudsmen: