New Alternative Dispute Resolution (ADR) regulations come into force on 1 October 2015. The rules oblige all professional firms providing services to consumers to provide their clients with the name of an ADR provider and inform them whether they use the ADR process to resolve disputes.
The new rules have been introduced to meet the requirements of the European Union’s ADR Directive. The regulations are intended to make it easier and cheaper for consumers to resolve disputes with businesses without resorting to court action. Revised pre-action protocols make it clear that the courts expect claimants to have attempted to mediate before starting an action.
Many professions are already obliged to use ADR by their regulators, although not all of the ombudsman services are approved ADR providers. The Legal Ombudsman has recently withdrawn from the scheme. As a result the Law Society has issued guidance for solicitors informing them how to meet the new regulations. The Financial Ombudsman Service and The Association of Chartered Certified Accountants are approved ADR providers under the regulations.
The government has appointed the Chartered Trading Standards Institute (CTSI) as the body responsible for approving ADR providers in many other sectors. A list of providers approved by the CTSI appears on the institute’s’ website.
“Mediation is an important part of dispute resolution,” said James Burgoyne, Director – Claims & Technical, Brunel Professional Risks. “Successful mediation can prevent a dispute from becoming a major professional indemnity insurance claim. This in turn can help to preserve a firm’s claims record and avoid unnecessary increases in professional indemnity insurance premiums.”