Latest insights from our experts
Alternative Dispute Resolution for consumer facing businesses
European regulations now require businesses which sell to consumers the chance for their customers to resolve disputes without taking legal action.
What is ADR?
ADR is alternative dispute resolution, jargon for resolving a legal dispute without the use of the courts. It can take a number of forms, the most popular being mediation. The parties jointly appoint (and share the costs of) an independent mediator who tries to broker a settlement. The mediator can’t force the parties to agree and the mediation is without prejudice if they fail to reach settlement.
In the context of consumer disputes, ADR often takes the form of reference to an ombudsman, such as the Financial Ombudsman or Energy Ombudsman who (if they have agreed to be bound) can make binding decisions which the parties must accept.
How to comply with ADR regulations
- Choose an ADR provider. If your business is member of a trade association or regulated by an industry body like the FCA, they may require you to submit disputes to them. If you are not then it’s up to you to choose a suitable ADR provider. Ombudsmen only charge the business, making complaints by consumers free. As a result most businesses choose mediation to deter frivolous complaints – the mediator often requires the consumer to contribute toward their costs.
- Give customers the ADR provider’s contact details. Publish the ADR provider’s details on your website. In the meantime give the link to the EU’s online dispute resolution (ODR) platform. The website is here.
- Update your website terms of sale. If you sell online, make sure your website terms and conditions of sale are up to date and conform to the Consumer Rights Act 2015. The largest number of complaints are likely to be against businesses that fail to comply with new laws on refunds and faulty goods or services.
Speak to our dispute resolution solicitors for advice on choosing an ADR provider and dealing with customer complaints.