ADR business FAQs

 

We get asked lots of questions from businesses about Alternative Dispute Resolution (ADR), and how we work as an impartial dispute resolution body in the automotive sector. We’ve therefore put together the following page of FAQs to answer some of the most common queries that we receive.  

 

What is Alternative Dispute Resolution (ADR)?

 

Alternative Dispute Resolution (ADR) is a method of resolving a dispute fairly between consumers and businesses without having to go through the legal process, often making it quicker, cheaper and simpler than going to court. This could be through the use of a neutral third-party mediator or a formal arbitration process.

 

Here at The Motor Ombudsman, we use the process of adjudication, which is where an impartial adjudicator reaches a decision (i.e. in favour of the consumer or business or even a split outcome in some circumstances), by evaluating the evidence supplied by both parties against the standards set by our Code of Practice and, where relevant, the law.

 

Of course, we want to resolve every complaint as quickly and as amicably as possible, so we will always look to see if it’s possible to resolve the issue without the need for the case to be passed on to an adjudicator (also known as an early resolution). This is normally when the business makes an offer to settle the dispute or carry out an action, like repairing the vehicle.

 

What legislation governs the ADR process in the UK?

 

The Alternative Dispute Resolution for Consumer Disputes (Competent Authorities and Information) Regulations 2015 and The Alternative Dispute Resolution for Consumer Disputes (Amendment) Regulations 2015, better known as the Alternative Dispute Resolution Regulations 2015, govern the ADR process in the UK. The legislation came into force on 9th July 2015 following the implementation of a 2013 European Directive on ADR.

 

From 1st October 2015, businesses have been required to supply consumers with the details of a certified ADR provider, and inform them as to whether they intend to use them to help resolve a dispute.

 

Businesses should actively sign up to be part of an ADR body, such as The Motor Ombudsman, as this demonstrates to consumers that you are acting both transparently and fairly, and consumer research shows that being accredited to a scheme like The Motor Ombudsman helps your customers to have more trust in you, thereby enhancing your reputation.

 

Did ADR exist in Europe prior to 2015?

 

Yes, the concept of ADR itself was not new and already existed before 2015. Formal ADR schemes first appeared in Europe in the 1960s, but became more widely used by a greater number of Member States in the 1990s. Sector-specific legislation had been introduced in the European Union, requiring Member States to encourage or ensure access to out-of-court dispute resolution mechanisms.

 

Why was the European Directive on ADR introduced?

 

The 2013 European Directive on ADR was introduced to simplify and standardise the process of resolving disputes for consumers across the European Union, which varied in quality and coverage.

 

Does my business have to use ADR?

 

From 1st October 2015, the ADR Regulations made it mandatory for every business to signpost customers to a certified ADR provider in the event of an unresolved dispute. However, your organisation does not have to agree to use one when looking to conclude a complaint. Nevertheless, your business is still required to supply information about ADR to consumers even if you choose not to use an ADR provider.

 

Businesses should actively sign up to be part of an ADR body, such as The Motor Ombudsman, as this demonstrates to consumers that you are acting both transparently and fairly, and consumer research shows that being accredited to a scheme like The Motor Ombudsman helps your customers to have more trust in you, thereby enhancing your reputation.

 

Why should my business use ADR?

 

Using Alternative Dispute Resolution (ADR) essentially complements your in-house complaints process and provides your consumers with reassurance. By using ADR, your business is showing consumers that you are acting both transparently and fairly, and consumer research shows that being accredited to a scheme like The Motor Ombudsman helps your customers to have more trust in you, thereby enhancing your reputation.

What are some of the key benefits for my business when using ADR?

 

Some of the key benefits of your business using Alternative Dispute Resolution (ADR) to resolve a complaint with a consumer are as follows:

 

 

  • The process is fully impartial, and all information provided will be considered in equal measure

 

  • ADR procedures can be completed more quickly than court proceedings, thereby allowing you to get on with running your business

 

  • ADR avoids the need for either party to seek legal representation for the resolution of a dispute, and to incur the often-significant cost of doing so

 

  • ADR procedures can often be more flexible in terms of their outcome. It may therefore be possible to achieve outcomes that a court could not award, or to get a result that the parties think is fairer than that dictated by law

 

  • ADR is usually completed in private and conducted confidentially between the parties involved, so are often less confrontational or adversarial than court proceedings. Not only can this reduce stress, it can also be an important consideration when both parties are keen to have an ongoing relationship. This then also helps avoid the risk of adverse publicity and reputational damage that could arise from a court case

 

  • If a case was taken to court, they would want to see that the consumer and business have firstly tried to resolve the issue through ADR. A failure to engage in this process may be viewed negatively by a judge

 

Is The Motor Ombudsman a certified ADR provider?

 

Yes, The Motor Ombudsman is a certified ADR provider and is audited annually by Chartered Trading Standards Institute (CTSI) – the competent authority for approving and auditing ADR providers for non-regulated sectors in the UK. The CTSI’s annual audit ensures our compliance with The Alternative Dispute Resolution Regulations 2015.

 

How does The Motor Ombudsman’s ADR process work?

 

 

As a business, you have up to eight weeks to resolve a dispute from when the complaint is first brought to your attention by the consumer. If you reach a state of deadlock within this period, and you have set out your final position to the customer, preferably in writing, you can then direct the consumer to use our ADR service.

 

The customer will be required to complete our web form, where they will be asked to provide details of their vehicle, a summary of their side of the story, and an explanation of the resolution that they are ideally looking for e.g. a discount off the cost of a repair or for parts to be replaced free of charge. When this has been submitted, this will create a case file on our system. One of our case investigators will then get in touch with you to gather the required information on the complaint from your point of view, so that we then have evidence from both parties to be fully impartial in all our decision-making.

 

We want to resolve every complaint as quickly and as amicably as possible, so we will always look to see if it’s possible to resolve the issue without the need for the case to be passed on to an adjudicator (also known as an early resolution). If this is not possible, as sometimes things may be a little more complex, or we can’t reach an amicable resolution between you and your customer, an adjudicator will need to review the evidence provided by yourselves and the consumer to determine the fairest outcome based on what has happened and whether there has been any breach of the Code(s) of Practice.

 

If both yourselves and the consumer agree with the adjudication outcome, and if there is any action for you to carry out, such as repairing the customer’s vehicle or providing a refund, we will ensure this is completed before the case on our system is closed. However, if either party disagrees with the adjudication outcome, a final decision can be requested from the ombudsman, the last stage of the process.

 

At this point, any new evidence submitted by either party will be reviewed by the ombudsman, in addition to the information provided during the adjudication of the case. It’s important to note that the ombudsman may not always reach the same conclusion as the adjudicator.

 

Once the ombudsman’s final decision has been delivered, it will become binding on both parties if the consumer chooses to accept it, meaning you will have to comply with any award or recommendations made. If the consumer does not agree with the final decision for any reason, and the case does end up in court, you can demonstrate that you have acted reasonably by trying to resolve things at an earlier stage and by engaging in ADR. This may also be taken into account when the court delivers their judgment.

 

Does accreditation to The Motor Ombudsman demonstrate my commitment to using ADR?

 

Yes, being part of The Motor Ombudsman means that you agree to participate in ADR and use The Motor Ombudsman’s services if you cannot resolve a dispute directly with a customer via the internal complaints procedures that have been put in place by your business. It also means you agree to be bound to any final decisions made by an ombudsman, where they’ve been accepted by the consumer.

 

Does The Motor Ombudsman offer training on ADR and how it works?

 

Yes, The Motor Ombudsman offers a dedicated training module, which covers what Alternative Dispute Resolution (ADR) is and how the process works. It usually takes around 40 minutes, and participants are eligible for Continuing Professional Development (CPD) points, and will also receive a Motor Ombudsman certificate on the successful completion of the course.

 

Will the ADR Regulations change again?

 

We cannot confirm the future direction of ADR legislation, but in April 2018, the Department for Business, Energy & Industrial Strategy (BEIS) issued a Green Paper called “Modernising Consumer Markets”, which looked at, amongst other subjects, improving consumer awareness of and access to ADR, and expanding the mandatory use of ADR to certain sectors. It is expected that a White Paper will follow in due course.

ADR tips for businesses

 

To view some ADR tips for businesses, please click here.