Myth: online and alternative dispute resolution – everyone has to take part….
Reality: only some traders require to participate in ADR ….
The Alternative Dispute Resolution for Consumer Disputes (Competent Authorities and Information) Regulations 2015 created new requirements for businesses in relation to alternative dispute resolution (ADR). Some commentators and businesses are spreading a misconception, that every single business (whether an online trader or not) is required to use an ADR organisation to resolve disputes, when the truth is that only in certain cases does ADR have to be used. In some cases, organisations are required to use ADR by law, rules of a trade association or term of a contract, but for the other businesses – normal judicial and settlement options are available and ADR can be negotiated, if it is desired at all, between the parties in dispute without reference to the regulations.
We have seen examples of businesses who have “accidentally” signed up to ADR due to these misconceptions, in some cases leading to expensive, time consuming and avoidable procedures, all while not realising that there are other options in this ADR area. We have also seen examples of businesses and sub-contractors being treated unfairly, being misled or through ignorance unnecessarily asked or forced to comply with ADR by partners, suppliers, banks, financial houses (who are similarly labouring under misunderstandings).
We have helped lots of businesses with their contractual notification requirements in this area recently. If you have any queries in relation to your business and its liability in relation to ADR, please get in touch with Stephen Cotton or Emma Arcari at CCW.