Last edited 16 Oct 2015

Consumer rights act 2015

A European Union Directive on consumer alternative dispute resolution (ADR) was published in July 2013. The principal obligation imposed on member states was to ensure that ADR, provided by a certified body, is available (although not mandatory) for disputes between a consumer and a business.

On 1 October 2015 the Consumer Rights Act came into force. This introduced a wide range of provisions intended to clarify and simplify consumer rights, including; clarification of rights when goods or digital content are faulty, rights when services are different from those agreed, and unfair contract terms. It also included provisions allowing businesses that sell directly to consumers to use alternative dispute resolution procedures to deal with disputes.

ADR allows disputes which parties cannot resolve themselves to be resolved without full court proceedings. ADR procedures can allow resolution more quickly, more amicably and at a lower cost. Procedures include arbitration, adjudication, mediation and so on. ADR has been mandated for some sectors for a number of years, for example construction contracts. See Alternative dispute resolution for more information.

Under the new Act businesses in sectors that are required to provide ADR, or that have voluntarily decided to adopt it, must provide consumers with details of their ADR provider on their website and, if applicable, in the terms and conditions of sales or service contracts. If they become involved in an unresolved dispute with a consumer they will have to tell the consumer that they cannot settle the dispute, whether they are prepared to deal with the dispute under ADR procedures and who the certified ADR provider is.

If they are not within a regulated sector, businesses will still not have to adopt ADR procedures. Business to business disputes are not covered by the Act, nor are disputes initiated by a business against a consumer.

The Act does however apply to consultants and trades people offering services direct to consumers.

Businesses that are affected should ensure that they have clear procedures in place for dealing with disputes and that they are compliant with the Act.

A European regulation on online dispute resolution will become law in January 2016.

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