MoJ consultation on Dispute Resolution in England and Wales - Which? response

Summary

Which? welcomes the Ministry of Justice Call for Evidence on Dispute Resolution in England and Wales and the opportunity to provide evidence related to approved consumer Alternative Dispute Resolution (ADR) schemes. Our response is based on Which? investigations, a Which? review of information published by approved ADR providers in nine sectors in 2019/2020 and interviews with stakeholders and a consumer survey conducted in 2021. 

ADR is an important part of the consumer enforcement regime and can provide consumers and businesses with an accessible and affordable alternative to court proceedings. ADR schemes can also play an important role in improving business practices which has a beneficial impact on consumers and responsible businesses.

Where ADR works well it gives consumers access to justice and compensation that they may have been denied had their only option been the more expensive and, for many consumers, daunting prospect of taking a company to court. Research shows that consumers who are able to access ADR, generally receive significantly more compensation compared to what they were offered before the ADR process.

However, ADR is all too often not available to consumers or fails to meet their needs in other ways. As a result many consumers cannot seek redress or are frustrated by the process, leaving them exposed to harm and unable to confidently resolve their complaints. The following issues in particular need to be addressed: 

• Large gaps in ADR provision. There are significant gaps in ADR provision including in key sectors such as aviation, some parts of the property sector, retail, motor and home improvements. This is because the schemes in these sectors are voluntary and many businesses have chosen not to join. 
• Low consumer awareness and substantial confusion. There are low levels of awareness amongst consumers about the availability of ADR as well as substantial confusion about the overlapping and partial coverage of ADR in the UK.
• Inconsistent and limited oversight. The ADR Regulations 2015 created a legal framework for the oversight of approved ADR schemes by ‘competent authorities’. However, competent authorities in regulated sectors tend to have enhanced powers and resources resulting in more effective oversight.
• Time taken to resolve a dispute. The ADR process has built in delays from the start and the time allowed for resolving a dispute is unclear and exceeds most consumers expectations. 
• Patchy compliance. Although reliable data on compliance levels is difficult to come by, there is some evidence that compliance with ADR decisions in both regulated and non-regulated sectors is patchy.
• A lack of accountability and assurance about independence. It is important that consumers and businesses trust ADR to provide an independent and fair process. Our research suggests some ADR schemes could do much more to demonstrate their independence.
• Multiple providers can cause unintended consequences. Where there are multiple providers in a sector we are concerned that this can create pressure on providers to make decisions about processes and cases that favour businesses over consumers.
• Limited use of data to drive improvements. ADR schemes have a large amount of rich data about performance and complaints that should be shared widely with businesses, regulators, other enforcement bodies and consumer advocacy groups as a tool to drive improvements in business practice, raising standards for all consumers.