UK government announces reforms to consumer ADR services

The UK government recently published a report announcing a wide range of far-reaching changes to the UK competition and consumer protection regulatory regimes, following a consultation last year.

The key reforms are examined on our Competition Notes blog, here.  Below, we highlight a less prominent aspect of the report, regarding the role of ADR services in consumer markets.

Under the banner of “supporting consumers to enforce their rights independently”, the report addresses the following  issues.

  • Consumer awareness:  The report recognises that the landscape of consumer ADR services is decentralised, complex and difficult to understand, with multiple schemes in some sectors and none in others.  Although noting that consultation responses advocated the creation of a single entry and signposting point, the report does not announce any specific proposals in this regard. Rather, it will continue to work with relevant stakeholders “to help promote ADR and ensure ease of access”.
  • Business response times:  The report notes that in regulated markets, most regulators have typically set an informal upper limit of eight weeks for businesses to resolve complaints before consumers are entitled to take a dispute to ADR.  The consultation process indicated support for reducing the standard response time to four weeks, although some concerns were expressed that in some sectors this could prevent traders from properly investigating claims and place additional burdens on business.  The government has decided against imposing a standardised four week response time but will continue to to explore the case for reducing the current informal upper limit while ensuring appropriate safeguards for complex cases.
  • Quality and oversight of ADR services:   In the consultation, the  government  signalled its intention to improve the quality and consistency of consumer ADR services, to increase business and consumer confidence in ADR.  In a significant announcement, the report confirms that it intends to:
    • require “all businesses that offer dispute resolution services in consumer markets” to be approved under the Alternative Dispute Resolution for Consumer Disputes (Competent Authorities and Information) Regulations 2015; and
    • strengthen the existing accreditation framework to ensure a common set of standards are applied and that providers can be held accountable.

‘Consumer ADR’ is usually understood as referring to the services provided by dispute resolution bodies set up specifically to deal with consumer/trader disputes, such as Ombudsmen and  trade association schemes.  It is currently not clear to what extent the new approval requirement could extend to individual mediators/neutrals or small independent ADR bodies which do not operate within any particular consumer sector but are available to deal with disputes that could be categorised as consumer disputes.

  • Improving business take-up of ADR in non-regulated markets:   The consultation recognised that, while in the regulated consumer sectors it is generally mandatory for traders to participate in ADR schemes, in sectors where participation is voluntary there is little engagement by business particularly amongst SMEs.  Although the report notes strong support for it in the consultation responses, the government appears to be not proceeding with a proposal that business participation in ADR should be made mandatory in the motor vehicles and home improvements sectors.  The report’s conclusion with respect to improving business take-up is limited to supporting the Ministry of Justice’s ongoing wider policy review of the role of ADR in civil disputes generally.

 

Jan O'Neill
Jan O'Neill
Professional Support Lawyer, London
+44 20 7466 2202

 

 

Brexit: UK unwinds implementation of EU ADR laws

Jan O’Neill
Professional Support Lawyer, London

 

The UK Government has published legislation to effectively revoke the implementation of the EU Mediation Directive (2008/52/EC) after Brexit.

The Cross-Border Mediation (EU Directive) (EU Exit) Regulations 2019 (the Regulations) were made on 1 March 2019 and will come into effect on exit day, whenever that occurs.

Why?

The development is part of a wider policy decision by the Government to revoke/repeal UK domestic legislation that implemented EU law in instances where that law is based on reciprocity between EU Member States. Continue reading

UK: Civil Justice Council report on ADR calls for review of Halsey guidelines but stops short of recommending mandatory mediation

Jan O’Neill
Professional Support Lawyer, London

 

The Civil Justice Council’s ADR working group has released its final report on ADR and Civil Justice, following consultation on its interim report released last year. The broad mandate of the review was “to maintain the search for the right relationship between civil justice and ADR” and to promote debate over possible reforms.

The report includes various recommendations aimed at improving the awareness of ADR (both in the general public and in the professions/judiciary) and the availability of ADR (both in terms of funding/logistics and regulation of the professionals involved).

However the recommendations likely to be of most interest to users of the civil justice system in the short term are those that relate to Court/Government encouragement of ADR.  In this regard:

  • The report does not support blanket compulsion of ADR in the sense of requiring proof of ADR activity as an administrative precondition to any particular step in the litigation.
  • It also rejects the introduction of mandatory Mediation Information and Advice Meetings (as used in the family courts) as a precondition to pursuing civil claims.

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The role of mediation in the resolution of Belt and Road Initiative disputes

China’s Belt and Road Initiative (BRI) has gained huge momentum of late, with governments, companies and lawyers keen to maximise the many opportunities it presents. The resolution of disputes arising from the BRI is no exception. The sheer complexity and scale of BRI projects is prompting a welcome review of dispute resolution processes, with a view to resolving BRI disputes more quickly and amicably, ideally in a confidential and enforcement-friendly environment.
Recent developments suggest that the BRI presents an opportunity for less formal procedures, like mediation, to flourish and enter the mainstream. Indeed, three key BRI jurisdictions – China, Singapore and Hong Kong – have recently promoted mediation in the context of BRI disputes.

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Consultation on the relationship between courts and ADR in Europe

A consultation has been launched  "to consider the concerns that have arisen in Europe as a result of the exponential growth of numerous different forms of alternative dispute resolution".  

The paper, entitled "The Relationship between Formal and Informal Justice: the Courts and Alternative Dispute Resolution", is a joint project by the The European Law Institute and the European Network of Councils for the Judiciary (the latter chaired by Sir Geoffrey Vos, Chancellor of the High Court).

The consultation's focus is on how the interface between courts and ADR processeses is working in Europe. It seeks views on whether identified concerns can be addressed by developing statements of best practice or models, to be followed by both courts and ADR providers when assessing what dispute resolution process should be adopted in a particular dispute.

The interface between courts and ADR processes is of course a key issue being discussed more globally in the ongoing Global Pound Conference (GPC) series, and it will be interesting to see how the data and commentary generated out of the GPC (following the final event in London in July 2017) compares to the conclusions from this consultation (the final report on which is planned for the end of 2017). 

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UK: Civil Courts Structure Review recommends expanded role for ADR

The recently published final report of Lord Justice Briggs in his Civil Courts Structure Review includes some interesting conclusions as to the role currently played by ADR in the civil justice system in England and Wales and a number of recommendations aimed at expanding that role.

Key recommendations are for:

  • the proposed new Online Court to include an expanded range of conciliation options (beyond the short telephone mediation originally recommended); and
     
  • the re-establishment of a court-based out of hours private mediation service in County Court hearing centres.

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UK: Interim report published in Civil Courts Structure Review

An important judicial report has been published examining the need for changes to the court structure and processes for civil justice in England and Wales.

The Civil Courts Structure Review by Lord Justice Briggs was commissioned by the senior judiciary to coincide with the UK government's ongoing wider programme for reform of the justice system more generally.  Briggs LJ's  interim report was published on 12 January 2016, with a final report due by the end of July 2016 following further consultation.

One of the stated principles underlying both Briggs LJ's Review and the wider governmental reforms is the need for the justice system to 'be built around the needs of those who use it'.  The issues they address in this regard (including accessibility, timeliness and affordability) will overlap substantially with key issues to be examined over the next 18 months in the Global Pound Conference (GPC) series taking place in over 25 countries worldwide. The GPC series will bring together users and providers of dispute resolution mechanisms across the globe (both courts and private processes) to discuss and provide data on what users of dispute resolution systems will need in the 21st century and how those needs can be met. 

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The EU Online Dispute Resolution (ODR) Platform – an update on timing

It has been confirmed that online businesses will have an extended timeframe in which to comply with new obligations to signpost customers to the Online Dispute Resolution (ODR) Platform being set up by the EU Commission.

As we have previously reported, the EU ODR Regulation which came into force last year (and was implemented in the UK as part of new ADR Regulations) includes a requirement that, from 9 January 2016, all businesses selling goods or services online within the EU carry a link on their website (and in some cases in their contractual terms) to the ODR Platform. While businesses have been preparing to comply with the obligation by 9 January, the missing piece of information to enable them to do so has been the ODR Platform website address, which has not yet been released by the EU Commission.

The UK Department for Business, Innovation & Skills (BIS) has now confirmed that it has been advised by the EU Commission that the 'go live' date for the ODR Platform has been delayed to 15 February 2016.  Businesses will therefore now not be required to carry a link to the ODR Platform until it is launched on this new date.  BIS has confirmed:

'We can reassure you that although the date of 9 January remains in our Regulations, we fully understand that it will not be possible for businesses to meet this date as the ODR platform will not yet be launched. There will of course be no question of enforcement action before 15 February".

We will continue to monitor and report when the link to the ODR Platform becomes available. The EU Commission's most recent factsheet can be accessed here.

UPDATE 1.2.16:  The EU Commission has now announced the website address for the ODR Platform, which will be operational from 15 February:  http://ec.europa.eu/consumers/odr/

 

ADR for consumer disputes: New obligations on UK traders from 1 October 2015

The UK government has now published the principal legislation that will implement the European ADR Directive and the European Online Dispute Resolution (ODR) Regulation, both of which seek to encourage the use of ADR to resolve consumer disputes across the EU.  (See our previous posts for details of the EU legislation and the UK’s implementation plans).

Alongside provisions aimed at improving the UK infrastructure for ADR in consumer disputes, the legislative package also extends the obligations on businesses to provide consumers with information about ADR options.

Almost all UK businesses selling goods, services or digital content to consumers in the EU will need to ensure that they comply with the new requirements, which may involve reviewing websites, contractual terms and complaints handling procedures before the first operative date, 1 October 2015. Continue reading

UK Government announces plans for implementation of the EU ADR Directive and ODR Regulation

The UK Government has announced its plans for implementing the ADR Directive and the ODR Regulation, both of which are aimed at promoting the use of ADR schemes in disputes involving consumer complaints throughout the EU.

While the Government is not at this stage pressing forward with a suggested proposal to restructure the entire UK landscape for consumer ADR, the plans include:

  • the creation of a new ‘residual’ ADR scheme to fill the current gaps in the existing consumer ADR landscape;
  • the appointment of the Trading Standards Institute (TSI) as the UK’s competent authority to monitor ADR providers in the non-regulated sectors;
  • an 8 week extension to the standard 6 year limitation period for bringing court proceedings (in disputes covered by the Directive) in cases where ADR is ongoing at the expiry of the 6 year period; and
  • new statutory obligations on businesses to provide information to consumers regarding the availability of ADR schemes.

Businesses engaged in selling to consumers in the EU will need to familiarise themselves with the new consumer information obligations and ensure that they take steps to comply, including by amending contractual terms and website information where necessary. Continue reading