Traders must now provide details of alternative dispute resolution (ADR) options to consumers


New regulations came into force on 1 October 2015 which require traders selling to consumers to give information about alternative dispute resolution (ADR) to their customers.

The Alternative Dispute Resolution for Consumer Disputes (Competent Authorities and Information) Regulations 2015 (SI 2015/542) (the Regulations) aim to encourage out-of-court dispute resolution of consumer-related claims such as complaints about unsatisfactory goods or services. The Regulations only apply to disputes started by a consumer against a trader (and not to business-to-business disputes). For the purposes of the Regulations:

  • "Consumer" means an individual acting for purposes which are wholly or mainly outside that individual's trade, business, craft or profession; and
  • "trader" means a person acting for purposes relating to that person's trade, business, craft or profession, whether acting personally or through another person acting in the trader's name or on the trader's behalf.

Traders must first exhaust their internal complaints procedure to resolve a consumer's complaint. If that process is unsuccessful, they must inform the consumer on a "durable medium" (such as a letter or email) that they cannot settle the complaint and provide the name and website address of a relevant ADR provider. The trader must also confirm whether it is obliged or prepared to make use of that provider.

The use of ADR is not mandatory under the Regulations, but may be mandatory under the rules of a trade association. If obliged by law or its trade association rules or the terms of a contract to use a particular ADR entity's services, the trader must provide the name and website address of the ADR entity in both its terms and conditions and on its website.

The ADR providers themselves must be certified as competent to act and are also subject to a number of operational rules. These include: making ADR procedures available free of charge or at a nominal fee; taking no more than three weeks from receiving a complaint to tell parties that they will not deal with a case; concluding disputes within 90 days of receiving the complete complaint file (unless the dispute is complex); ensuring those who oversee disputes are suitably expert, independent and impartial; enabling consumers to submit complaints on or offline and offering information about their own activities.

Other ADR news

  • The European Online Dispute Resolution Platform (ODR Platform) is now accessible and available for use from 15 February 2016 to help resolve those disputes that arise from online purchases. Under the Alternative Dispute Resolution for Consumer Disputes (Competent Authorities and Information) Regulations 2015 (SI 2015/542) as amended by the Alternative Dispute Resolution for Consumer Disputes (Amendment) Regulations 2015 (SI 2015/1392), traders will be required to provide information about the ODR Platform on their websites, in their terms and conditions and in any of their email offers from 15 February 2016.
  • The Department for Business, Innovation and Skills (BIS) has produced: "Alternative Dispute Resolution Regulations 2015: Guidance for business", which can be found at the end of this Business Companion link.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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