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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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By Helen Dewdney, The Complaining Cow

Consultant | Author | Speaker | Blogger | Presenter | Journalist
Helping to make, prevent and deal with complaints

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