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What is Alternative Dispute Resolution (ADR)?

Alternative Dispute Resolution (ADR) is a process run by independent third parties to try and resolve disputes between consumer and traders outside of court.

If you are in dispute with a trader, it is generally advisable that you exhaust all means of resolving a complaint with that trader. Alternative dispute resolution is now considered an important step in that process and may be considered in any latter legal proceedings.

How does ADR work?

ADR will commonly utilise the following services;

  • Mediation – where a scheme tries to aid both parties in reaching an agreement via negotiation.
  • Arbitration – where a scheme offers a decision on your dispute after reviewing evidence submitted by both parties.

Alternative Dispute Resolution is quicker and cheaper than court action and a lot of schemes offer a free service to consumers. The end to end process also tends to be less formal than court and does not require a face to face meeting between the parties. An ADR scheme will often provide detailed terms explaining what is involved in their process, what timescales apply and list any costs if applicable.

Do all traders offer Alternative Dispute Resolution?

The short answer, unfortunately, is no. For some sectors of business, being a member of an alternative dispute resolution body is not a mandatory requirement, but in others it is. Examples of industries where ADR is mandatory would include the telecommunications sector (broadband, telephone and mobile), the financial sector (banking, insurance) and the property industry (including letting and property agents).

If you are in dispute with a trader within one of the above mandatory industries, please click here for further guidance.

My trader is not in a mandatory ADR industry, how do I utilise ADR in my current dispute?

As a first step you should always try and establish if the trader has a formal complaints process as this may include details of any ADR process that they have put in place.

Whilst a trader may not have a legal requirement to offer you ADR, its is always important to show from your perspective that you have taken all relevant steps to try and progress your case. This could include a) asking the trader formally if they offer ADR or, if they are not, b) offering them the chance to enter the process with you using an independent ADR body.

If a trader refuses to participate when you suggest this as a next step, this may be evidence that you could provide in any latter legal claim when highlighting your steps taken.

Last updated: 18 July 2019

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