My Lords, I thank the noble Baroness, Lady Howe, for raising this very important issue. Her interest and expertise in consumer problems was demonstrated at Second Reading, which I missed, so it is very good
to have her engaged on this important subject. The noble Baroness, Lady Drake, also rightly underlined the value and importance of ADR and of ombudsmen and ombudswomen.
I want to make it clear that the Government are very supportive of alternative dispute resolution, which provides a more accessible route than the courts for consumers to obtain redress. Accessibility was a point well made and emphasised by the noble Baroness, Lady Crawley, and, as the noble Baroness, Lady Howe, said, it is also good for business. The noble Baroness, Lady Hayter, described the advantage of wider ADR and talked—rightly, I think—of the benefits of both this Bill and the ADR directive, so I thank her for that.
Before I address the specific amendment, I shall take a moment to reflect on what the Bill seeks to achieve. The Consumer Rights Bill sets out a simple and modern framework of consumer rights and, where appropriate, enhances measures to protect consumers. Clearer rights and remedies mean that both consumers and businesses will be better equipped to resolve any issues at an early stage. Having said that, we recognise that there will be occasions when problems arise that cannot be so easily resolved between the parties. In these instances, access to alternative dispute resolution can prove invaluable.
I am glad to say that the Government will be strengthening the framework for alternative dispute resolution when it implements the European directive on ADR in July 2015, to which I think all the noble Baronesses referred. Currently there are well established mandatory ADR schemes in sectors with a high risk of consumer detriment. It is worth remembering that. One example is financial services, and I was interested to read that the largest ADR provider in Europe is the UK’s financial ombudsman, and that last year it resolved 500,000 cases. Another example is energy, but in other sectors access to ADR is limited. The directive requires us to address these gaps and ensure that ADR is widely available.
We recently undertook a consultation exercise, which has been referred to, on the best way to implement the ADR directive. Stakeholders were asked for their views on the issues covered in this amendment, and we addressed several other issues in our consultation. We proposed that the compulsory use of ADR should continue to be targeted at sectors where consumers most need it. We said that our preferred option was not to gold-plate the directive by introducing a blanket compulsory requirement for all businesses to use ADR; that would come at significant cost to businesses, which pay for the provision of ADR through a mixture of annual fees and case fees. However, we expect the directive’s requirement for businesses to inform consumers with complaints about ADR and to encourage much greater participation in ADR schemes. We will very shortly be publishing our consultation response document, which will outline the Government’s proposals for implementing the ADR directive and improving and simplifying access to redress for consumers, a point raised by the noble Baroness, Lady Crawley.
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