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We understand the need for an open Alternative Dispute Resolution (ADR) scheme but like many within the industry we have some key concerns with the current schemes and it seems Ofcom have finally decided to do something about it.

Paul

Paul Heritage-Redpath, Product Manager

For some time now the industry has had the choice of two ADR (Alternative Dispute Resolution) services; CISAS (Communications and Internet Services Adjudication Scheme) and OS (Ombudsman Services: Communications). These services are used where a customer has a dispute or complaint with a CP that they have been unable to resolve using the CP’s usual dispute resolution processes and require independent help. It’s regulated that all CPs must utilise the services of one of these companies and make this available to their customers.

However, over recent years an increasing number of concerns have been raised about these ADR services by customers and CPs. Therefore, Ofcom has now announced new guidelines which aim to resolve these concerns.

The key issue the review hopes to resolve is the fact that two similar claims are often dealt with very differently by the two schemes and they hope to unify the processes and compensation claims. On average CISAS awards £173 and OS awards just £103, noticeably less than CISAS. OS argues the average is skewed because they award a larger number of smaller compensation amounts and it could be affected by the CISAS policy that if compensation is not initially requested it cannot be awarded at a later date. CISAS will be required to change this process to comply with the new guidelines.

We believe the ADR schemes provide an essential service to the industry and where a dispute cannot be resolved between the customer and CP it is essential that the customer has an independent solution available to them.

However, the key issue we (and many other CPs) have with the process is that the service will remain completely free of charge to the end user. Whilst we understand this is needed to ensure customers have an appropriate resolution option and are not discouraged from using it, we believe it is unfair that CPs are forced to pay the costs of the ADR scheme even when a customer’s dispute is rejected. Elsewhere in English law it is commonplace that the losing party pays for the costs and we believe this would be a more appropriate solution.

Once again it seems that Ofcom have the best of intentions but have provided little in the way of detail. Whilst they state they aim to unify the schemes and in particular the value of claims awarded they give no guidance to the suggested value of the claims. We fully support the need for ADR schemes and the simple and open nature of them. However, Ofcom must recognise that strong guidelines MUST be given in order to unify the two schemes to achieve a level of consistency. Not doing so shows Ofcom to be rather toothless in this area, leaving the schemes to potentially diverge further from Ofcom’s wishes. If this continues to happen CPs will naturally choose the cheapest of the ADR options (especially CPs with poor complaint handling records), thereby eroding choice and leaving consumers with the worst possible outcome.

Therefore, we think Ofcom’s plans to unify the ADR schemes will fail if they do not add some detail to their aims, outlining the definitive process to be followed and providing at least guideline figures for claims. It would be nice to see them implement a ‘losing party pays’ approach but that’s highly unlikely, so it looks like CPs will once again have to foot the bill. We would also like to see CPs taking a positive customer centric approach to any issues raised, reducing the need for ADR schemes across the industry.

Have your say!

What experiences have you had with the ADR schemes? Have you found them to be fair and just or have you been forced to pay even when a claimant has lost their case? Do you think Ofcom’s new guidelines will help to fix the reported issues? Let us know your thoughts by leaving us a comment below.

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One Response to “Arbitrary Arbitration?”

  1. As wit most things Ofcom do yet again they do seem to be missing a trick, it should not be the case that if a customer raises a frivolous dispute then it should be the customer that pays if the case is lost, we have had a number of disputes pushed to ADR where it is clear that the purpose of the dispute for the customer is to avoid having to pay a final bill and as these amounts are more often less then £100.00 the customer is hoping that we just give in and write off the debt as going to ADR is going to cost us £400 to claim £100, so of course we can either be out of pocket by £100 of £300.
    I had even raised this with our MP who raised a question with the minister for Culture, Communications and creative Industries (Ed Vaizey) and his response was (Quote) “ADR cases should be regarded as a legitimate cost of regulatory compliance” so basically TOUGH! I wonder if he would feel the same way if they tried to take someone to court and even winning the case were still passed over the costs that were in excess of the amount they won in court!

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