Once upon a time, ADR, like mediation, was merely an “alternative” to Courts. It was an entirely optional process that gave parties flexibility. ‘Times they are a changing’, as Bob Dylan might say.
It has long been true that a Court could deny a successful party their costs if they unreasonably refused to participate in mediation. Over a decade ago, Lord Briggs put it this way:
“the constraints which now affect the provision of state resources for the conduct of civil litigation . . . call for an ever-increasing focus on means of ensuring that court time, both for trial and for case management, is proportionately directed towards those disputes which really need it, with an ever-increasing responsibility thrown on the parties to civil litigation to engage in ADR.”
What is ADR.
Alternative Dispute Resolution (ADR) is a way of solving disputes between dealers and consumers that does not involve the Court process. Common forms of ADR are:
- Mediation where an independent mediator sits between the parties to try and reach a resolution; or
- Arbitration where an independent third party considers evidence from both sides and then gives a binding decision on the parties.
The Alternative Dispute Resolution Regulations 2015
Whilst ADR is always optional, in 2015 the Government passed The Alternative Dispute Resolution Regulations 2015, as a way to encourage the use and development of ADR. The regulations do not make ADR mandatory, but they do require businesses to provide information to Consumers to tell them of any ADR Scheme they are part of and whether they agree to ADR.
Do I belong to one?
Yes. As an RMI member you sign up to a code of conduct that includes ADR provided through the National Conciliation Service.
National Conciliation Service
The National Conciliation Service (NCS) is an Alternative Dispute Resolution (ADR) scheme specialising only in the retail motor industry. The NCS deals with disputes between a consumer and a trader (business) that has not been resolved to the consumers satisfaction or has reached a deadlock. This service is independent and as an RMI member free to use for all parties.
The NCS uses a combination of Conciliation and Arbitration which means that their decisions are advisory only and both parties are free to accept or reject the outcomes. If the Conciliation is unsuccessful the parties can then consider voluntarily submitting to Arbitration where the decision would be binding.
Further details can be found here
You may also have chosen to sign up to one of The Motor Ombudsman’s codes of practice. If so, these are also subject to ADR provided by The Motor Ombudsman (TMO).
The Motor Ombudsman
The TMO, like the NCS, is another body that focuses solely on the automotive sector. The TMO self-regulates the UK’s motor industry through its comprehensive approved Codes of Practice including
- The New Car Code
- The Vehicle Sales
- The Service and Repair Code
- The Vehicle Warranty Products Code
Where a member signs up to any of the above codes a Consumer has the right to refer their complaint to the TMO. If you do not sign up to any of the above codes there will be a fee for the provision of ADR.
The TMO uses an arbitration process. If their initial opinion is not accepted by either party the matter is then submitted to Arbitration where the decision would be binding on the business but not the consumer.
Further details can be found here
In Conclusion
Law on the books and law in practice aren’t always the same. But several recent cases this year suggest that Courts are getting more and more serious about funneling parties into ADR. The bottom line: if you’re in a legal battle, you simply must consider mediation before barreling forward with the matter in Court.
We would always encourage the use of ADR through a qualified and specialist service where possible. Both above organisations can assist in managing disputes and assist in achieving a cost effect resolution.
That said, it is important to seek advice when dealing with a complaint. It is essential that a business fully understands the facts of any dispute, the law that applies, and that these are communicated effectively to support their position. This is particularly important where members are subject to a TMO Codes of Practice as any decision will be binding. We have seen a number of members who have lost a decision only because they have not included all of the facts and law that supported their position within their submissions.
Don’t forget, as an RMI member you have access to the RMI Legal advice line, as well as a number of industry experts for your assistance. Should you find yourself in the situation above, contact us at any stage for advice and assistance as appropriate.
Motor Industry Legal Services
Motor Industry Legal Services (MILS Solicitors) provides fully comprehensive legal advice and representation to UK motor retailers for one annual fee. It is the only law firm in the UK which specialises in motor law and motor trade law. MILS currently advises over 1,000 individual businesses within the sector as well as the Retail Motor Industry Federation (RMI) and its members.
