At the end of March 2012 the Office of National Statistics published data showing that the economy contracted by 0.3% in the last quarter of 2011. However, the UK is likely to avoid a technical recession as the Office for Budget Responsibility expects positive growth in the first quarter of this year; not exactly good news. Since mid 2010 the economy has been alternating between growth and contraction, each quarter technically avoiding a recession whilst also avoiding any sustained growth. No doubt everyone is hoping that the targets for economic growth in 2012 will be met or even exceeded, but what measures can be taken to drive growth forward? The Government’s plans were outlined in the latest Budget but measures to drive growth are also being considered in Europe. These could have a significant impact on UK consumers.
European Commission and access to ADR On 29 November 2011 the European Commission (“EC”) published a Communication on Alternative Dispute Resolution for consumer disputes in the Single Market alongside legislative proposals. The EC proposed that all EU consumers should have access to ADR no matter what product or service is purchased or where in Europe it is purchased from. The Department for Business Innovation and Skills consulted with UK stakeholders on the proposals earlier this year.
The EC asserts that by giving consumers greater confidence in their purchases they are more likely to do business with unfamiliar traders which in turn should drive competition and growth. Currently, when someone purchases goods or services, they are likely to choose a familiar or local trader. Consumers are naturally wary that if they purchase from an unknown source and something goes wrong, it may be difficult to rectify the problem without undertaking a long and costly court process.
Managing the cost of consumer dispute resolution through the Communications and Internet Services Adjudication Scheme (CISAS)
ADR is a cheaper and quicker means to settle a dispute compared to court action and it is already widely used in consumer disputes. The issue identified by the EC is that ADR is currently not available in all sectors. CISAS, for instance, is a scheme run by IDRS Ltd which is used to settle disputes between consumers and telecommunication providers, however, CISAS will not deal with disputes surrounding equipment faults. The EC is aiming to fill such gaps so that every dispute is covered.
ADR may involve mediation or adjudication and both are well suited to consumer disputes. Mediation allows both parties to engage in the process themselves and undertake a collaborative approach to reach a solution which satisfies both sides. Adjudication allows an independent third party to assess the evidence and decide upon a fair and reasonable outcome for the parties. Both methods are more cost effective than court proceedings yet achieve a solution that is both fair and in line with the law.
If the EC proposals are effected, the hope is that the growth in ADR will translate to a commensurate growth in the UK economy.
By Justine Mensa-Bonsu