ADR Tales…

legal updates

Traders who are not a member of a trade association do not have to engage in ADR.

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We are now two months into the The Alternative Dispute Resolution for Consumer Disputes (Amendment) Regulations 2015 being introduced and we wanted to let our members know how it is developing.

We have certainly seen a large increase in the interest of consumers in exploring ADR options and also in the number of complaints being referred to ADR bodies.

For those of you who may not be aware of the Regulations yet they cover the promotion of ADR (which is predominantly mediation and negotiation) in all disputes. The aim is to promote the resolution of disputes between consumers and traders prior to having to resort to court action.

Traders who are not a member of a trade association do not have to engage in ADR, however, they must, in a deadlock letter provide information about ADR and whether or not they intend to engage. Those who are in a trade association that require the use of ADR by way of their rules of membership, or those who are required to use ADR because of a specific piece of legislation (normally PPI matters for example) must use ADR and provide information about this in their deadlock letters and on their websites.

It is therefore important to check whether any trade associations you are a member of require you to use ADR as this will be relevant when dealing with all of your cases. If you are required to use ADR then, if the consumer initiates it you must engage with the process.

We have seen a large increase in consumers being aware of the new regulations and attempting to initiate ADR between the parties. In some cases we have found it very helpful in resolving disputes, however in some cases it has been a costly process that has not resolved the dispute and the matter still needs to be referred to Court for their ruling. Many of our traders also find that it there is a cost involved when taking part in ADR and there is little need for this when there is a free mediation service available for use when a court claim is made. It is clearly the government’s intention with the regulations to remove the need for court claims to be made and they are hoping that they will see a decline in the number of claims being filed.

It is worth noting that ignoring the regulations and not following your legal obligations could be costly. Trading Standards enforcement action could be around the corner for those traders who fail to provide the required information when dealing with consumers and for those refusing to take part in ADR when they are required to do so.

For any information about ADR then please contact us and we would be very interested to hear anyone’s good and bad experiences when taking part in ADR so we can build up a bigger picture of how the regulations are working in practice.

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