Legal Ombudsman may become a certified ADR entity

September 25, 2015

The Legal Ombudsman is currently consulting on the important issue of modifying its Scheme Rules in order to become a certified ADR entity under the ADR Directive. The consultation closes on 2nd November 2015 and it prompts questions about the provision of ADR and the role of the Legal Ombudsman. The proposals and consultation are within this link. 

The purpose of the EU ADR Directive is to create an ADR landscape where ADR providers meet quality standards and consumer confidence is bolstered. Most provisions of the Consumer Rights Act 2015 and the ADR Consumer Protection Regulations – giving effect to the ADR Directive – come into force on 1st October 2015.

The obligation on the UK Government under the Directive is to ensure the availability of ADR, provided by a certified ADR body, for any dispute concerning contractual obligations between a consumer and a business. Although the actual use of ADR is not mandatory, the idea is that all consumers will have access to a choice of redress. Theoretically this provides an opportunity for ADR provision within the UK to make itself attractive to all parties to a dispute with the result that there is a system in place which works satisfactorily for both consumers and businesses. There is self-evidently room for duplication and confusion unless there is a commitment to avoid both.

Organisations within the legal sector currently have complaints processes which generally signpost those who are dissatisfied with the internal complaints system to the Legal Ombudsmen. Soon there will be an obligation for there to be two signposts: one to a certified ADR entity and one to the Legal Ombudsman. Additionally the business doing the signposting must indicate if it will engage with the ADR entity. Interestingly though, it is not under an obligation to do so. If the Legal Ombudsman succeeds in its application for certification, then the Legal Ombudsman and the ADR entity will be as one. It is not clear that this represents a substantive choice. This raises some questions which are the subject of the current consultation.

The two  main two changes which the Legal Ombudsman proposes are in relation to (a) time limits (to extend the current time limit for referral from 6 to 12 months) and (b) the basis for refusing to consider a complaint (because it has already been dealt with and would thereby ‘seriously impair the effective operation of the Legal Ombudsman scheme’). The proposals appear relatively straight-forward tweaks to the existing Ombudsman scheme. There are some underlying questions which perhaps the consultation responses will pose and answer. There is no suggestion of any additional activity being incorporated, such as mediation. In fact it seems if the Legal Ombudsmen applies and is approved by its competent body, the Legal Services Board to become a certified ADR entity, it will perform exactly the same functions it does as the Legal Ombudsman. This may produce the result of the consumer facing Hobson’s choice as the same complaint could be dealt with by the Legal Ombudsman in its capacity as an ADR entity and then if the consumer was not satisfied, the complaint could be taken to the Legal Ombudsman who could refuse to deal with the complaint if to do so would seriously impair its effective operation.

How easy will this be for the consumer? The solicitors’ firm or chambers will need to be very clear what choice is available to the consumer. What will the consumer expect when it takes a complaint to the Legal Ombudsman as ADR entity? Will that expectation differ if the complaint is taken to the Legal Ombudsman? How will the consumer’s experience of ADR affect the perception of ADR? There is an opportunity to suggest answers via the consultation. In the absence of the Legal Ombudsman’s certification as an ADR entity, the question of which ADR entity will be signposted on 1st October 2015 remains.

Garden Court Mediation

Garden Court Mediation