This article was originally written for the ESRC JustEnergy website.
Naomi and I participated in the conference “Consumer ADR: Delivering fairness and justice for consumers, business and markets” organised by the Center of Socio-Legal Studies of the University of Oxford on 18 and 19 March 2019.
Alternative dispute resolution (ADR) allows the settlement of a complaint out of court with the assistance of an impartial dispute resolution body. Resolving consumer disputes is more accessible, faster and less expensive than going to court. The purpose of this conference was to assess the development of the 2013 ADR directive for consumer disputes (2013/11/EU) in key economic sectors and understand the nuances of its interpretation in the member states. European countries have been left free to choose between the many types of ADR, such as mediation, conciliation, ombudsmen, arbitration or complaints boards. For instance, in the energy sector, most member states have assigned the role of ADR in both electricity and gas to the regulatory authority. Non-energy sector specific third parties, such as non-sector specific consumer organisations, come second. Only a few member states have chosen to have an energy ombudsman or energy sector-specific third parties.
There are more and more alternative dispute resolution schemes and models for solving consumer disputes without turning to the traditional court system. In particular, critical economic sector, such as financial services and energy, the providers of dispute resolution from different member states have been cooperating closely, with networks such as FiN-NET and NEON. Those networks allow them to share their experience, build on best practice and acknowledge the risks and shortcomings specific to the sector.
European ADR providers are slowly creating a (new) culture of justice and fairness, although many consumers are still not accessing ADR nor getting the benefits. The lack of visibility, misunderstanding surrounding the role of an ADR body, the fragmented response and the diversity of schemes among each member state challenge the development of consumer dispute resolution. The directive did not include a requirement for sellers to enrol in a single specific scheme. In some instances, the transposition of the directive into national law has created complex situations for consumers. In Germany, ADR bodies have created an informal network to guide the consumer on the right path to redress. In Belgium, a single portal and close cooperation among the schemes allow consumers to lodge their complaint easily to the right body. The development of artificial intelligence and machine learning could help overcome specific barriers and biases, and further develop the habit of seeking compromises through a neutral third party and perhaps allow more people to benefit from it.
However, trust in the middleman has yet to be built. Trust is built through independence and impartiality, but many consumer associations throughout Europe perceive levels of trust as low. Information on governance has to be delivered on a silver plate. Trust will be built around better transparency in the process and more explicit governance mechanisms, a wider diffusion of the information, and better acknowledgement of the risks surrounding the different forms of vulnerability.
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