UK Government begins consultation on ADR Directive

The Department for Innovation, Business & Skills (BIS) has begun consultation on implementing the EU Directive on alternative dispute resolution (ADR) for consumer disputes and the EU Regulation on online dispute resolution (ODR) for consumer disputes.

The ADR Directive, which was adopted by the EU Member States on 22 April 2013, is expected to come into force in July 2015 under section 2(2) of the European Communities Act 1972, while the ODR Regulation comes into force in January 2016.

These new inclusion to consumer law serves as a significant development as they seek to provide further protection to consumers and enhance confidence in the purchasing of goods and services across the EU. The idea is that, in the event of a problem with a purchase, such a problem will be dealt with quickly and easily. As the Minister for Employment Relations and Consumer Affairs, Jenny Willott MP, stated, “Consumers are often deterred from seeking redress by the prospect of navigating the legal system, and ADR provides a faster, cheaper and more straightforward means of obtaining redress.”

The consultation is relatively wide in scope to fully absolve the requirements of the ADR Directive imposed on the Government, businesses and ADR providers. However, the outcome would mean that the cost of ADR would remain proportionate to its benefits, ADR schemes would become widely available for all kinds of consumer disputes, and ADR service providers would continue to meet high quality standards.

The ODR Regulation sets out the requirements for the establishment of an ODR platform that is aimed at facilitating communication between the parties and a certified ADR provider, which concerns a contractual dispute arising from an online transaction. The Regulation makes it mandatory for all online businesses, amongst other things, to provide information about an appropriate certified ADR provider or providers to the consumer, and advise whether or not they will use ADR in an attempt to settle the dispute. This does not come into effect until January 2016.

Perhaps what would be the most welcomed development following on from the consultation, is the ‘formal’ designation of one or more competent authorities to maintain and monitor a list of certified ADR providers (i.e. those which meet the required standards of the ADR Directive). In the current terrain of fragmented groups purporting to promote standards amongst mediation providers in particular, consumers’ confidence in service delivery and even the use of mediation is likely to be affected. Although the Civil Mediation Council (CMC), which is widely recognised as the authority for Civil, Commercial and Workplace mediation matters, is to be commended for the substantial work they have done, and continue to do in this area.

Consultation closes on 3 June 2014, documents can be viewed via this link: ADR consultation.