10 January 2015

Alternative Dispute Resolution Regulations Come into Effect

The new Alternative Dispute Resolution (ADR) Regulations, which require that ADR is available for any contractual dispute between a business and a consumer in the UK, came into force on 1 October 2015. The new regulations require businesses which are part of an ADR scheme to provide information about that scheme. They also require any business involved in a dispute with a consumer (regardless of whether the business is part of an ADR scheme) to inform the consumer of the details of a certified ADR provider.

Is it mandatory to use ADR to resolve disputes?

Under the new regulations, it is not mandatory to use ADR to resolve a dispute. The regulations do not require a business to use ADR nor do they give a consumer the right to force a business to use ADR or to use a particular ADR provider.

Do I have to join a certified ADR provider?

As construction is classed as a voluntary sector under the regulations, a contractor does not have to join a certified ADR provider.

Contractors in membership of a trade association should check with the trade association to confirm whether they are a member of a certified ADR provider and what the rules of the scheme are.

If I join an ADR provider, what do I have to do?

If a contractor has signed up to a certified ADR provider, either voluntarily or through membership of a trade association, they must provide information about their chosen ADR provider on their website and in the terms and conditions of any sales or service contracts.

In the event of a dispute which they are unable to resolve, the contractor must inform the consumer either via email or by letter that:

– They have been unable to settle their complaint; and
– The name and website address of the certified ADR provider that they are part of which would be able to deal with the dispute should the consumer wish to use ADR.

If I choose not to join an ADR provider, do I have to do anything?

In the event of a dispute which they have been unable to resolve, contractors that are not part of a certified ADR provider must inform the consumer either via email or by letter that:

– They have been unable to settle their complaint;
– The name and website address of a certified ADR provider which would be able to deal with the dispute should the consumer wish to use ADR and there is a list of certified ADR providers on the TSI website; and
– Whether they are prepared to use ADR by that certified provider to settle the dispute. A contractor can choose not to use ADR but they must still inform the consumer of an ADR provider.

Further information on the new ADR Regulations can be found on the TSI website and there is detailed guidance on the Business Companion website.