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Consultations, Consumer-citizens, Mediation and ADR, Ombuds and reviewers

Analysis: Richard Kirkham on the Government’s plans for consumer ADR: Innovation or more of the same

rkirkhamThe Department for Business, Innovation and Skill (BIS) has issued its response on its consultation on proposals for upgrading the provision of alternative dispute resolution for consumers. The proposals were triggered by the EU Consumer ADR Directive, but at the same time map conveniently onto the Government’s current civil justice agenda of moving dispute resolution away from the courtroom. It is the parallels of this agenda with developments in the administrative justice system (AJS) which are the focus of this blog.

Overall the BIS report offers the potential for greater access to justice through ADR, but also increased complexity in the design and regulation of the complaints landscape. Use of ADR under BIS’s proposals will not be compulsory for fear of imposing costs on business, costs which BIS does ‘not believe … there is currently sufficient evidence … [of] the benefits …[to] justify’ [para.32]. Such a conclusion is unsurprising for as has been pointed out elsewhere, ‘this government has an allergy to anything that looks like regulation or bureaucracy or constraints on market freedom’. Nevertheless, from July 2015 virtually all consumer sectors (for exceptions see Article 2 of the Directive on ADR) will be covered by an ADR scheme, mostly through the operation of existing ADR providers but also through the creation of a new residual ADR service for those sectors not currently covered. Contracts for the provider of this residual service will soon be put out to tender.

Although this new residual ADR scheme may create another complaints service, it was just about the only concrete acknowledgment in the proposals of the benefits of simplifying the sector (there was originally talk of multiple residual providers). The confused complaints maze which the consumer is confronted with in the private sector and the issues that flow from that, mirror the AJS. Yet whilst there is talk in the BIS report of looking further into the potential for harmonising ADR schemes, it seems that there was sufficient negative feedback during the consultation process to justify placing this proposal in the box marked ‘to deal with later’ or possibly ‘too difficult’, a theme familiar in the complaints sector. Meanwhile, the report continues the process of resurrecting the phrase ADR and accepting various different titles for complaint schemes, rather than making the bold move of requiring all independent complaint schemes to be labelled an ombudsman. Thus more unnecessary confusion will be allowed to drift across the sector and another block will be placed on any aspiration to raise the profile of the ombudsman brand.

Further complexity will be built into the overall system by making a series of sector regulators responsible for performing the overarching role of the competent authority, whose duties will include monitoring the performance of certified ADR providers against the requirements of the Directive. As the BIS paper points out, the ability to simplify the system is compromised by existing statutory relationships between regulators and complaint schemes. But likewise the potential for distilling best practice and establishing uniform standards in the complaints sector is weakened by this duplication of role across a number of competent authorities. Of course, diversity and experimentation can encourage innovation, but the lack of coordination and ongoing consistency in the model of regulation being introduced is exemplified in the choice of Powys Council as the competent authority for Estate Agents.

As with the AJS, therefore, the Government approach towards tackling the downside of complexity amounts to little more than exploring the possibility of a single point of access to all certified ADR providers. The provision of such a helpdesk may work in terms of providing a better source of information to would-be complainants, but care will need to be taken to ensure that this single portal does not become an additional frustrating obstacle to justice.

The BIS report is highly pragmatic and lacking in any real ambition for ADR, but it does add to a pervasive sense that the sector is going to become ever more the heartbeat of the justice system, or as it was mischievously referred to in one conference this year – mainstream dispute resolution. The justice landscape has been shifting for some years. In particular, the trend towards discouraging court-based dispute resolution is well-set, as the National Audit Office’s report ‘Implementing Reforms to Civil Legal Aid’ has confirmed (for an example of the impact on family law cases, see In the Matter of D (A Child)). Simultaneously, efforts to encourage and enhance other methods of dispute resolution are now well embedded, with the administrative justice system one of the lead exponents as was explored by the Public Administration Select Committee in its 2013-14 inquiry.

But with this heightened role there comes increased responsibility and the need for more robust forms of scrutiny and sharpening of strategies to deliver meaningful services that the public can rely upon. Already signs of deep self-reflection in the sector have emerged. No sooner were doubts about the effectiveness of the Local Government Ombudsman scheme addressed than very similar criticisms of the Parliamentary and Health Service Ombudsman emerge (eg see Patients Alliance and this commentary). Meanwhile, through the internet the ‘Trip Adviser’ model of consumer voice has entered into the lexicon of public services providing dissatisfied users an alternative route to at least express dissatisfaction.

The BIS report indicates some of the possible options for the direction of travel in the sector, but as Nick O’Brien has identified in recent conference papers there are risks. The standards developed in the Consumer ADR Directive only tell a partial story of what we might expect of the complaints-handling model of dispute resolution. However worthy, if these standards become the primary focus for evaluating the effectiveness of an institution there is a real danger that grander concepts, such as fairness in dispute resolution and the capacity of the complaints process to become part of the solution in terms of facilitating organisational learning, will be lost in the stampede to gain customers and meet targets that are easy to measure.

Richard Kirkham is a Senior Lecturer at the University of Sheffield

About UK Administrative Justice Institute

Funded by the Nuffield Foundation, we link research, practice & policy on administrative justice in the UK

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