1. The ADR Directive and what it means
Richard Goodman, Policy Director

2. what is the ADR Directive?
The Alternative Dispute Resolution (ADR) Directive is an EU law that comes into force in July 2015
It will set some common standards for ADR providers
Using ADR will be voluntary for traders
These will be complemented with the Online Dispute Resolution (ODR) Regulations, which come into force in early 2016
In 2010 consumer financial losses were estimated at 0.4% of the EU’s GDP
It is estimated that wider availability of ADR could save around €22.5 billion a year

3. what does it do in theory?
The spirit of the legislation is to encourage growth in the EU single market
It aims to provide low-cost, simple and fast procedures, beneficial to consumers and traders
Provide full ADR coverage at EU level
The ODR regulations provide for an ODR platform – an online area where consumers can submit complaint about an online purchase
The ODR platform will route the complaint to the appropriate ADR scheme, supporting the resolution of cross-border disputes
The Commission is working with the UK on testing the platform now

4. principles of the Directive
The UK has an obligation to ensure that ADR is available to all businesses – though they are not required to use it. However, there are some principles which ADR providers must be able to meet:
accessibility – consumers should be able to submit a complaint both online and offline, and the process should be free (or a nominal charge) to use
expertise, independence and impartiality – case handlers must be sufficiently independent and knowledgeable in their field
transparency – ADR bodies are required to publish, either online or in their annual review, certain information such as complaints volumes and the time it takes to deal with these
effectiveness – the ADR procedure is easily accessible to both parties, it must be timely and parties are not required to use a lawyer or legal advisor to partake in the process
fairness – parties are able to withdraw from the process and are made aware of the legal effect of the outcome

5. implementation in the UK
Competent Authority
The Directive provides for ‘competent authorities’
These bodies are responsible for ensuring ADR bodies meet the quality and efficiency requirements of the Directive
BIS has decided to arrange competent authorities by sector regulators – so for us it will be FCA, and for the Legal Ombudsman it will be the Legal Services Board
For unregulated sectors, BIS has asked the Trading Standards Institute to be the competent authority
BIS consulted publicly on the Directive, and Government have now published their response. It sets out some key features of the Directive…
A consumer helpdesk
There will be a complaints helpdesk to help people navigate a complex landscape
This will be run by Citizens Advice, with the help and support of BIS
They will be looking to work with ADR bodies to help get this set up

6. implementation in the UK
Online access to ADR
Consumers have to be able to submit a complaint online
They also have to be able to exchange information online or offline
Residual ADR
Not all sectors have access to ADR, for example second hand car sales or house repairs
Part of BIS’s plan to implement the Directive is to procure a residual scheme, which will be available to these sectors
Qualities and independence of complaint handlers
Those responsible for handling complaints must be suitably independent and knowledgeable
This also means that in-house mediation is excluded from the ADR Directive

7. July 9 – ADR Directive comes into effect
current timescales
July 9 – ADR Directive comes into effect
Spring 2015 – Competent authorities begin certification process prior to implementation date
Spring 2015 – BIS will procure a residual ADR scheme to cover any sectors which have no access to redress via ADR
Spring 2015 – BIS will publish a second set of regulations which set out the detailed requirements we will be required to meet
Early 2015 – BIS will publish regulations detailing role of competent authorities

8. discussion: the year ahead