The FOS will soon be under increased pressure to reduce the time it takes to reach its decisions following the implementation of the EU Alternative Dispute Resolution (ADR) directive in three months' time. It is likely that the FOS will impose stricter response deadlines themselves, as a result.
The Directive, which must be implemented in the UK by 9 July 2015, is intended to ensure that all EU member states have properly functioning ADR provision for consumer/ business disputes.
In order to achieve this, the Directive provides that ADR entities, such as the FOS, should conclude dispute resolution proceedings within 90 calendar days of the date on which they receive the complete complaint file, including all relevant documentation pertaining to that complaint, and "ending on the date on which the outcome of the ADR procedure is made available". FOS' own note on the Directive says they will "keep challenging ourselves to get fair answers to our customers as quickly as possible. We know that 90 days still feels like a long time to most people".
It is not at this stage clear whether the "outcome" referred to in the Directive is to be the decision of an Adjudicator or the (final) decision of an Ombudsman, if the Adjudicator decision is not accepted (although we consider the latter to be unlikely). Either way, what is clear is that the FOS is going to be under more pressure than before to resolve disputes quickly.
The time pressure now placed on the FOS is likely to mean that response time limits set for businesses and the complainant are more strictly enforced by the FOS, in order to prevent a slippage of their own deadline.
Currently, the FOS tends to allow reasonable extensions of time for requests for files or information. In the future, a more strict enforcement of deadlines could give rise to serious consequences for unprepared respondents. Nevertheless, it is worth noting that the 90 day time frame does not start until the FOS have all of the information relating to the complaint, which may mean that the FOS maintain their current approach up until this point.
The spirit of the Directive will be relied on by those who argue FOS should not deal with high value and complex cases that are bound to take longer than 90 days and would, therefore, be more appropriate for Court. However, the Directive provides some leeway in cases of "of a highly complex nature", allowing the ADR entity to extend the timeframe for providing a response to the complaint. What will amount to a 'highly complex case' – and how this fits within FOS' statutory remit to resolve complaints "quickly and with minimum formality" - remains to be seen. Until then, we recommend that businesses prepare for the need to respond more promptly to the FOS.