Using Alternative Dispute Resolution to solve your consumer problem
What is Alternative Dispute Resolution (ADR)
Alternative Dispute Resolution (ADR) describes a variety of ways of solving a consumer problem without having to go to court.
The main advantages of solving a problem with alternative dispute resolution is that it is usually:
- cheaper than court solutions
- more flexible
- less stressful
- you may receive compensation
- the ADR procedure is confidential.
In most alternative dispute resolution schemes, a decision will be made based on the paper evidence you and the trader send in. You won’t always have to attend a hearing.
You can also use an alternative dispute resolution scheme to narrow down the problem before going to court.
Some ADR schemes are legally binding. This means that you won't be able to take your case to court if you accept the decision from ADR but later change your mind.
What types of ADR are available
The main types of ADR available for solving a consumer problem are:
- ombudsman scheme in some consumer problems
The schemes may be offered to you by a trade association.
The Faculty of Advocates has launched a dispute resolution service (FDRS). This is a specialist service offering the full range of types of resolution processes namely arbitration, mediation and adjudication. Members providing the service can also offer an expert determination. You can check what is available on its website at www.fdrs.advocates.org.uk.
Checklist of issues to work through before choosing ADR
- what do you want
- how much time do you have
- is the trader still trading
- do you want to avoid meeting the trader in person
- how much will it cost to start the process
- will I have to pay the other side’s costs if I lose (in most ADR each side pays their own costs although in arbitration the arbitrator can apportion costs if you and the trader agree to this)
- do I want the option of going to court as well as ADR
- is there a time limit in which I have to act.
Conciliation is usually free to use and is often offered first in consumer cases because it is less formal than arbitration.
The process called conciliation, involves a conciliator who focuses on what you and the trader want and tries to find a way of solving the problem that you are both happy with. The aim is to reach an agreed solution that suits you both.
Sometimes, the contract you have with a trader may ask you to use their own conciliation service before you can use independent arbitration. You should check whether they charge for this service and how long it will take to use.
If there is a clause in your contract about having to use conciliation it may be an unfair term of your contract if:
- you have to pay, or
- the conciliation process means it takes longer to solve your complaint than it should.
If you’re not sure whether you should use a conciliation service that’s offered to you, you can get advice from an experienced Citizens Advice Bureau adviser, for example at a Citizens Advice Bureau - where to get advice.
If you don't agree with the outcome of the conciliation, you may be offered independent arbitration or you can choose to take your case to court.
You can make an agreement from a conciliation legally binding if you make a written agreement.
With mediation, a mediator will help the parties to a dispute to focus upon the issue and to consider what the best way of solving it will be. The needs of both you and the trader are taken into account and you will try to find common ground in order to find the best solution to the problem. The mediator is there to assist both sides to reach an agreement that both are prepared to accept.
Conciliators and mediators may often be employed by the organisation you're complaining about but they should be trained to maintain impartiality and help both sides reach an agreement.
The mediator is not there to make a decision but will help both sides to agree a solution.
If you want to find a mediator contact Scottish Mediation at:
Some local trading standards officers also offer a conciliation service. They will be able to tell you whether your local office offers conciliation and refer you for help.
You can make a mediated agreement legally binding if you make a signed mediated agreement.
Arbitration uses an independent arbitrator, usually from the Chartered Institute of Arbitrators (CIArb) to make an independent 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, and you will not be able to go to court later if you don't agree with the outcome. In many arbitrations there is no court hearing. The decision made by the arbiter is made from the papers sent in and the evidence that has been presented by you and the trader. The evidence may have been presented only in written form or you and the trader may have been asked to each tell the story of your position on the dispute.
Some arbitration schemes are free to use. If you choose independent arbitration you will have to pay a fee. You may be able to get the fee back in an award from the arbitration if you win the argument.
Ombudsman schemes cover many services, including financial companies, such as banks, building societies and insurance companies, as well as energy and telephone and internet companies. The Ombudsman service is free for consumers to use but traders have to pay.
You can only use the Ombudsman if you have used the organisation's internal complaints service first. If it’s been longer than eight weeks since you made your complaint and you and the trader can’t agree on what to do, you can take your complaint to the Ombudsman.
You will need to supply paper evidence to the Ombudsman who looks at it and then makes a recommendation or ruling. Depending on which Ombudsman scheme you use, the decision that's made can be legally binding.
The Ombudsman schemes are looking into how a decision was made. This is more important for them to investigate than the decision itself. They also assess whether or not there has been any injustice.
For example, the Ombudsman Service, which deals with energy, communications and property complaints, can make a recommendation to the trader about what to do. However the Financial Ombudsman can actually order a company to do something .This is because it has greater legal powers.
You can still take court action if you're not happy with the decision but the court will take the Ombudsman's decision into account when they make a decision.
Current Ombudsman schemes include:
- estate agents
- retail services
- financial services
- telephone services.
What traders offer ADR
Many traders have their own recognised ADR schemes. Some of the most recognised schemes cover:
- furniture removals companies that are members of the British Association of Removers
- tour operators that are members of the Association of British Travel Agents
- builders and tradespeople that are members of the Federation of Master Builders
- telephone and internet providers that are members of CISAS or Ombudsman services
- furniture, home improvement and floor covering suppliers that are members of The Furniture Ombudsman.
If your complaint is with a trader that belongs to any of these trade associations, you should contact them directly to find out more about the ADR schemes they offer.
If your complaint is about other goods or services, look in our section Something's gone wrong with a purchase to see if there is a trade association that offers ADR.
If you need more help contact Advice Direct Scotland's consumer service or your local Citizens Advice bureau.
Advice Direct Scotland's Consumer Service
Freephone: 0808 164 6000