I support the noble Baroness, Lady Howe, on Amendment 23. At the moment, in so many areas of retail, the primary route to a remedy if there is a dispute is to go to the courts, but going to a court is far too daunting and complicated for many people. The paperwork may well put them off. The court fees may act as a disincentive, especially if the goods purchased are modest in monetary value. Even if a consumer wishes to begin by going to the small claims court, if a case is considered complex by the judge, it may be transferred to the normal county court list, which would definitely deter and daunt most people.
I realise that mediation has been introduced in small claims cases, but the psychological impact of going to court—its legalistic aura, the language of the courts and dealing with the necessary paperwork—can all still be off-putting and a deterrent. The behavioural response of consumers to alternative dispute resolution and the courts are very different. The court system is not really fit for purpose for many ordinary consumers, certainly in respect of smaller consumer rights claims. As the noble Baroness put it so compellingly, alternative dispute resolution is essential, otherwise consumers will have their rights enshrined in a new Bill but many will be deterred from exercising them. Consumer inertia in pursuing rights and securing remedies will remain strong—an assumption, unfortunately, that some traders build into their responses and their market behaviour.
Consumer rights and access to an effective means of enforcing them need to be inseparable. You can give consumers all the rights in the world, but if they are deterred from exercising them because the process is off-putting, complicated, disparate or whatever, as was clearly set out by the noble Baroness, their rights will not be effective and the market will remain dysfunctional in part.
The Bill has several clauses that relate to redress, but it does not lock into an alternative dispute resolution scheme. It seems extraordinary that a Bill so focused on securing and improving the position of consumer rights does not seize the opportunity to lock into ADR. I know that the Government are consulting on the details of such a scheme in the light of the EU directive, but that in itself is not a reason for missing the opportunity to use the Bill to place a duty on the Secretary of State to implement such an alternative dispute resolution scheme. As the noble Baroness pointed out, a key purpose of the Bill is to consolidate, simplify and strengthen consumer law.
The Government agree—it was confirmed by the Minister, Jenny Willott—that if we are to have a consumer rights system that works, ombudsmen and
alternative dispute resolution will be critical parts of it. Having conceded that fundamental analysis and intellectual point, we have this big omission in the Bill. Although the Government are working on implementing the EU directive and looking at the different options, the amendment does not inhibit or undermine that detailed work. It does not prescribe exactly how the directive will be implemented; rather, it makes clear in the Bill that the right to redress for consumers must include access to an effective, independent alternative dispute resolution regime and that the duty is on the Secretary of State to ensure that that happens. The amendment would not prejudice the outcome of the consultation on the implementation of the ADR directive but would clearly place the duty on the Secretary of State. Having followed the debate on this in the Commons, it would appear that the only argument mobilised by the Government is that somehow it would prejudice the outcome of consultation. I do not think that it does, because it enshrines a fundamental principle which the Government concede is essential to an effective system of consumer rights. The detail of implementing that principle can be left to the outcome of consultation and subsequent regulation.
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The Government have known for a while that the EU directive had to be transposed into law. Given that all the parties recognise the importance of an alternative dispute resolution process to the exercise of consumer rights, not including the matter in the Bill is a lost opportunity. We do not know yet where in implementing the directive the Government will go on the continuum from the minimal option of a dispute resolution process of last resort to radical reform of the ombudsman landscape. That is still a matter for Parliament to consider. The amendment would put a duty on the Secretary of State to put an independent and effective alternative dispute resolution scheme in place.
The noble Baroness made the important point that her amendment goes with the grain of simplifying the consumer experience. That is not only the experience of the consumer when engaging with the trader but their experience when seeking redress. As the noble Baroness explained, we know that that can be off-putting; it can be complicated; and it can be variable, depending on what economic sector we are looking at. Her amendment is very clear and goes with the grain of the Bill, which is to simplify consumers’ experience in securing their rights and accessing redress. Particularly compelling was her argument about a single point of contact, because who knows where the detail of the Government’s proposals on ADR will settle in the light of the EU directive? Consumers need to have easy access to knowledge and easy comprehension of what the resolution alternatives are. They need a point of contact which will assist them in accessing redress when they need a resolution to their problem. I therefore strongly support the noble Baroness in her amendment.