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Using alternative dispute resolution (ADR)

If you've got a complaint about something you bought or a service and dealing directly with the trader hasn't worked, you could ask an independent person to look at your consumer problem and try and find a solution. This is know as Alternative Dispute Resolution (ADR). Not all ADR schemes are the same. Depending on your consumer problem you may be offered:

  • conciliation or mediation
  • adjudication
  • arbitration.

If you're thinking of taking a trader to court, judges now generally expect you to have considered the use of ADR, before you start court action.

Benefits of ADR

It’s worth trying ADR before going to court. If you’re successful, you will:

  • avoid paying any court fees
  • avoid going to court - which will be more complicated than ADR
  • still receive your compensation

Conciliation and mediation

Conciliation and mediation are usually free to use and are often offered before arbitration because they are less formal:

  • conciliation focuses on what you and the trader want and tries to find a way of solving the problem that you are both happy with
  • mediation focuses more on the problem and what's the best way to solve it.

Both you and the trader can put your case but one of you may have to give way more, to find the best solution to the problem.

Conciliators and mediators are sometimes employed by the trader you're complaining about, so you may not get an independent view.

Mediation is a completely voluntary and confidential form of alternative dispute resolution. An independent, impartial person will help you reach a solution that's acceptable to everyone. The mediator can talk to both sides separately or together.

Mediators do not make judgments or decide the outcome of the dispute. They

  • ask questions that help to uncover underlying problems,
  • assist the parties to understand the issues and
  • help them to clarify the options for resolving their difference or dispute.

Adjudication

Adjudication is independent, less formal than arbitration and is usually free to use. An adjudicator will look at the written evidence you and the trader send in and make a decision. The adjudicator is usually an expert in the area you are complaining about and should be approved by the Chartered Institute of Arbitrators (CIArb).

Differences between adjudication and arbitration

There is a difference between adjudication and arbitration. With adjudication you can take your problem to court if you're not happy with the outcome. With arbitration you will have to go with arbitrator's decision and you may not be able to go to court later if you don't agree with the outcome.

Arbitration

Arbitration uses an independent arbitrator, usually from the Chartered Institute of Arbitrators (CIArb) to make a decision about your complaint. This is based on the paper evidence you and the trader send in.

The decision the arbitrator makes is legally binding. You will not be able to go to court later if you don't agree with the outcome.

Some arbitration schemes are free to use. If you have to pay a fee to use arbitration, it will be based on the value of the amount of money you're claiming. But it's still usually cheaper than going to court.

Ombudsman Schemes

The ombudsman service is free for consumers to use but traders have to pay. They cover:

  • financial companies, such as banks, building societies and insurance companies
  • retailers, including online retailers
  • energy companies
  • telephone and internet companies
  • furniture removers.

You can only use the Ombudsman if you have used the trader's internal complaints service first.  

Using ADR if you’re making a small claim in court

If you’re making a small claim in court, you’ll be sent an allocation or directions questionnaire which asks if you want to settle the matter out of court using ADR. You can only use ADR if both sides agree.

If you’re using the small claims track, you’ll be asked if you want to use the Small Claims Mediation Service. This is free and will be provided by the court.

If you’re using the fast or multi track, you’ll  have to pay for and find your own ADR scheme.. If ADR doesn’t work, the case will be put forward for a hearing in court.

Next steps

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