Consumers within the EU purchase products and services from businesses located within their own countries and, increasingly, from businesses based in other EU member states. Consumers aren’t always aware of the options open to them when a dispute arises over the goods or services they have purchased and, in particular, the availability of Alternative Dispute Resolution (“ADR”). ADR essentially refers to dispute resolution processes that represent an alternative to court proceedings, such as mediation.
There is currently a drive by the EU to harmonise consumer laws across the EU and consumer rights law in the UK is being reformed. As part of this process, the EU introduced legislation in 2013 to establish an effective and low-cost way of consumers resolving cross-border and domestic disputes with businesses. To give effect to this EU legislation, the UK established the Alternative Dispute Resolution for Consumer Disputes (Competent Authorities and Information) Regulations 2015 and last month published the Alternative Dispute Resolution for Consumer Disputes (Amendment) Regulations 2015 (“the ADR Regulations”). The ADR Regulations are intended to facilitate the EU’s objective of encouraging growth and consumer confidence across the EU by increasing access to ADR to resolve consumer disputes.
The effect of the ADR Regulations will be to provide all businesses selling goods and services to consumers with access to a certified provider of ADR services in their sector. For some businesses, particularly those operating in regulated sectors (such as financial services), this is unlikely to have any impact as they may already be obliged by existing legislation to use ADR for consumer disputes, but it represents a significant change for other businesses.
The ADR Regulations do not make the use of ADR compulsory for all businesses (although where sector specific requirements exist, they will remain) but from 1 October 2015, all businesses selling goods and services to consumers, irrespective of whether the business intends to use ADR, will need to provide the following information to consumers:-
- Details of the certified ADR provider in their sector;
- Confirmation as to whether or not the business intends to use that provider.
Businesses selling goods and services to consumers therefore need to start preparing for the implementation date of 1 October 2015. It is a good idea to seek legal advice from a solicitor, who will be able to advise on the requirements of the ADR Regulations and the best way for a business to achieve compliance.
If you are involved in a dispute and would like advice on this or a related topic, please contact Catherine Mathews. Catherine specialises in commercial and contract litigation and has experience of many different forms of ADR, including mediation, adjudication and arbitration. She also deals with consumer disputes, including those relating to holidays, timeshare, cars and financial services. Catherine is a member of the Dispute Resolution Team in Exeter. She is listed as a leader in her field in Chambers 2015.