Alternative Dispute Resolution

The Alternative Dispute Resolution for Consumer Disputes Regulations 2015 transposed the EU ADR Directive and require traders to inform consumers about approved ADR bodies even where they are not obliged to use them. Approved bodies are certified by the Chartered Trading Standards Institute (CTSI). In regulated sectors, ADR is mandatory: the Financial Ombudsman Service (FOS) covers financial products, Ombudsman Services covers some energy and communications complaints, and CISAS and Ombudsman Services: Communications handle telecoms. The typical process is: raise complaint with the trader; if unresolved after eight weeks (or if a deadlock letter is issued sooner), refer to the relevant ADR body; the referral window is usually six months from the final response. ADR outcomes are free for consumers; some arbitration schemes charge small fees but must refund them if you win.

What it means in practice. ADR is an umbrella covering several very different processes, and the difference matters. Mediation is facilitated negotiation: the mediator has no power to decide anything, and nothing is binding unless you both agree it. Conciliation is similar but the conciliator may suggest solutions. Adjudication and ombudsman schemes involve an investigator who reaches a decision, usually binding on the business but not on you unless you accept it. Arbitration produces an award that binds both sides and largely ends any right to go to court, so it is the one to think hardest about before entering.

A worked example. Priya buys a sofa that arrives damaged. The retailer refuses a refund. She complains in writing, and eight weeks later receives a final response rejecting her claim but naming an approved ADR body. She refers the dispute, uploads photographs, the order confirmation, and the correspondence, and pays nothing. The adjudicator applies the Consumer Rights Act 2015 short-term right to reject, decides in her favour, and the retailer — bound by its scheme membership — refunds her in full. The whole process takes weeks rather than the months a small claim would have taken.

Common pitfalls. In unregulated sectors ADR is voluntary, so a trader can simply refuse to take part and your route is the small claims court instead. Deadlines are strict and vary by scheme, typically six months from the final response. And people accept an early low offer without realising that accepting settles the whole dispute — once you sign, you cannot go back for more.

How it relates to other terms. Ombudsman schemes are the best-known form of ADR — see ombudsman — and in property, membership of a redress scheme is compulsory. The gateway to any of them is normally a deadlock letter or final response letter, and the underlying rights in a goods or services dispute usually come from the Consumer Rights Act 2015. Where ADR is unavailable, the fallback is the small claims court.

What to do next. Identify which scheme covers the business using our ADR guide. Get the complaint in writing first with how to complain, then follow escalating complaints once the deadline passes.