BIS launches a consultation on alternative dispute resolution for consumer disputes.

On 11 March 2014, BIS launched a consultation on Alternative Dispute Resolution and published its Impact Assessment on the options available.

Background

 In 2013 the EU adopted a directive on Alternative Dispute Resolution (ADR) and a regulation for Online Dispute Resolution (ODR).  The aim is to allow consumers to have contractual disputes with traders resolved out of court by means of an alternative dispute resolution procedure.

The ADR Directive for consumer disputes must be implemented by all EU countries by July 2015.  By 2016 an EU wide online dispute resolution platform will link all national ADR providers and operate in all official languages of the EU.

The UK position

The UK has around 70 schemes to resolve consumer disputes in over 20 sectors.  Some are statutory in regulated areas such as financial services and telecommunications; others are run by industry bodies and others are private.  There are still some gaps in ADR provision for consumer disputes including private parking.

The UK wants to make sure that the way it implements the ADR directive will:

  • ensure quality ADR access across all sectors
  • result in minimal cost to business while maintaining a high level of consumer protection; and
  • secure a system that is structured to avoid confusion for consumers.

One issue the Consultation considers is whether the ADR system in the UK should be rationalised and whether a simplified system should be compulsory.

Comment

The ADR Directive and ODR Regulation will affect most businesses that sell goods or services to consumers.  Even if costs are minimised, there will be cost implications for business including:

  • training staff so they are familiar with the new system
  • changing websites to give required information
  • changing terms and conditions

Currently ADR is privately funded through membership fees, levies or case fees.  Business has the opportunity to shape the way the Directive is implemented by responding to the Consultation which is open until 3 June 2014.

For more see:

Consultation: https://www.gov.uk/government/consultations/alternative-dispute-resolution-for-consumers

Impact: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/288200/bis-14-594-implementing-alternative-dispute-resolution-directive-and-online-dispute-resolution-regulation-impact.pdf.