EU ADR (Alternative Dispute Resolution) Directive

There has been quite a lot of publicity recently about the EU ADR (Alternative Dispute Resolution) Directive which was published in May 2013 and which needs to be enacted into UK law through Regulation under the European Communities Act 1972 from 9th July 2015.

The Legal Ombudsman is applying to the Legal Services Board to be certified as an ADR entity by 9th July 2015 on the basis that they will be compliant, provided the necessary approvals sought are forthcoming within “a reasonable period of time”, currently said to be 6 months (ie 9th January 2016).  This is permissible.

The Legal Ombudsman has chosen to allow themselves time to publish the changes to the scheme rules in order to enable them to try to understand and manage any impact on service providers and consumers and to allow comment upon the proposed changes by stakeholders.  They have indicated that they will publish the proposed scheme rule changes on their website by the end of July.

However, the key changes are:

  • A client who has complained to his / her solicitor will have 12 months from the final response letter in which to refer a matter to the Legal Ombudsman (this is a change from the current six months);
  • Scheme rule 4.5 currently allows a complaint to be brought 6 years from the date of the act or omission giving rise to the complaint or alternatively 3 years from the date you should reasonably have known there are grounds for complaint.  However, this will be removed.  The Legal Ombudsman will, as a result of this proposed amendment, set out in scheme rule 5.7 (which deals with reasons for dismissing a complaint) how they will handle “aged” or “stale” complaints that they consider they are unlikely to be able to investigate satisfactorily because of the amount of time that has passed since the act / omission;
  • Amend, as required, the grounds for dismissing a complaint which is brought before the Legal Ombudsman to reflect those in the ADR regulations.

The Legal Ombudsman have indicated that they expect the changes to be implemented by no later than 9 January 2016.

In terms of practical steps the ADR Regulations will require solicitors to:

  • Confirm the name and web address of the Legal Ombudsman on their website IF they have a website;
  • Include the name and web address of the Legal Ombudsman in their general terms and conditions;
  • Inform the client on a durable medium of the following:
  • That they cannot settle the complaint with the client;
  • The name and web address of the Legal Ombudsman (ie the ADR entity competent to deal with the complaint if the client wishes recourse to ADR);
  • That they (the solicitor) is required to submit to the ADR procedure.

In addition, in January 2016, the ADR Regulations will be supplemented by ODR (Online Dispute Resolution) for online traders.  So where a legal service provider makes an offer by email or other electronic means, he or she will need to tell the client of the existence of the ODR platform and the possibility of using it for resolving disputes, by a clause in their Terms of Business or Client Care Letter and they will also need to include a link on their website to the ODR platform.  The ODR platform is currently being established by the European Commission which will enable consumers with a complaint about goods or services purchased online to submit a complaint via an online complaint form.  This is required even if they do not market goods or services in other EU countries and is intended to facilitate cross border disputes.

At present, therefore, firms are not required to take any action to amend their documentation as the scheme rule changes have not been agreed by the Legal Services Board.  However, some changes will come into effect either on or before 9th January 2016 because the UK is required to comply with the EU ADR Directive.

Helen Glaze, Senior Associate, Legal-Eye Ltd

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