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Home > News > New law on consumer disputes introduced

New law on consumer disputes introduced

24 March 2015 |

Background 

Many consumers feel that if they have a problem with a product or service they have bought, there are few options available to them. Going to court is simply not an option for the average consumer. Alternative Dispute Resolution (ADR) offers a quicker and cheaper alternative to the courts which is often used in resolving business-to-business disputes.

Consequently, on 9 July 2015, the Alternative Dispute Resolution for Consumer Disputes (Competent Authorities and Information) Regulations 2015 will come into force (Regulations). The Regulations require the Government to ensure that ADR is available for all contractual disputes between a consumer (that is, the man on the street buying goods or services for personal purposes) and a trader (which includes retailers and their agents and distributors).

What effect will the Regulations have?

The Regulations aim to increase awareness of ADR for resolving consumer disputes and ensure that certified providers are available to handle such disputes. However the Regulations do not make it mandatory for traders to offer consumers access to ADR nor do they entitle consumers to force traders to use ADR; unless the trader is a member of a trade association or professional body which requires ADR to be provided.

The Regulations set out the requirements for certified ADR providers, notably, providers: must offer ADR free of charge or for a small fee to consumers; conclude disputes within 90 days of receiving the complaint file; and employ trained, independent and impartial staff to handle disputes.

What does this mean for traders?

The Regulations require: any trader who is obliged to offer ADR by its trade association or professional body, or who has voluntarily agreed to use an ADR provider, to provide information to consumers regarding ADR on their website and in their terms and conditions; all traders (no matter how big or small) to provide consumers with information regarding the availability of ADR, but only after the trader has exhausted its own complaint handling process; all traders who sell goods or service online or provide a sales platform to provide a link to an online dispute resolution platform on their website or, if an online trader is obliged or has committed to use ADR, to provide further information about ADR (this requirement does not come into force until January 2016). Guidance for both businesses and consumers expected to be published by the Government very shortly.

What do we think?

Ed Boal, a solicitor in our Commercial team, comments:

“It is too difficult to say at this stage whether the Regulations will boost consumer confidence in the long run. Rather than making ADR mandatory, the Regulations create the framework for ADR to flourish. Recognising that this might not be enough, the Government has said that it intends to ask certain ADR providers to target marketing activities towards sectors where there is a high volume of consumer complaints, such as the home maintenance, retail, second hand car, car repair and servicing sectors. The Government has also said that it will work with Citizens Advice to create a consumer complaints helpdesk which will be available both online and via telephone.”

For more information please contact Ed Boal on 0117 906 9486.

The contents of this article are intended for general information purposes only and shall not be deemed to be, or constitute legal advice. We cannot accept responsibility for any loss as a result of acts or omissions taken in respect of this article.

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