ADR REGULATIONS FOR SOLICITORS: 1 OCTOBER 2015
On 1 October 2015 the Alternative Dispute Resolution for Consumer Disputes (Amendment) Regulations 2015 are in force implementing the EU Directive on Consumer Alternative Dispute Resolution. These require solicitors to provide information about an ADR approved body but solicitors are not required to submit complaints to that body. The obligation in the ADR Directive and the Regulations is to give information, not to agree the use of ADR.
The requirements in relation to the Legal Ombudsman remain unchanged whether or not solicitors agree to submit the claims to an ADR approved body. Solicitors remain obliged not only to give information about the Legal Ombudsman but to cooperate actively with that body.
Given the internal complaints procedure which solicitors are obliged to have and given the compulsory use by solicitors of the Legal Ombudsman and given the heavy and unique restrictions on solicitors enforcing bills and given the rights of clients to apply to the court for assessment of costs under the Solicitors Act 1974 solicitors may feel that yet another tier, that would be the fourth apart from resort to the ordinary courts, is wholly unnecessary and pointless.
That is the view that my firm has taken.
From 1 October 2015 solicitors must, at the end of the first tier complaints process, that is the internal complaint procedure:-
- provide information on the Legal Ombudsman as the Statutory Complaints Scheme for Solicitors, and
- inform the client, on a durable medium:
– that they cannot settle the complaint with the client;
– of the name and web address of an ADR approved body which would be competent to deal with the complaint, should both parties which to use the scheme;
– whether they intend to use that ADR approved body.
The Legal Ombudsman had applied to the Legal Services Board to become certified as an ADR approved body for the purposes of the ADR Directive and it was assumed that virtually all solicitors would name the Legal Ombudsman.
However the Legal Ombudsman has unexpectedly withdrawn its application.
The Chartered Trading Standards Institute (CTSI) has approved a number of ADR entities who will be able to provide ADR services and these can be checked by solicitors and indeed their clients on the list of approved providers on their website, that is the CTSI website.
The Law Society has published an updated guidance on 10 September 2015 on how to comply with the Directive.
It suggests the following text once the first tier complaints process has been concluded:-
“We have been unable to settle your complaint using our internal complaints process. You have a right to complain to the Legal Ombudsman, an independent complaints body, established under the Legal Services Act 2007, that deals with legal services complaints.
You have six months from the date of this (our final) letter in which to complain to the Legal Ombudsman.
Legal Ombudsman
PO Box 6806
Wolverhampton
WV1 9WJ
Telephone: 0300 555 0333
Email address: enquiries@legalombudsman.org.uk
Website: www.legalombudsman.org.uk
Alternative complaints bodies (such as [include one of them and their website]) exist which are competent to deal with complaints about legal services should both you and our firm wish to use such a scheme.
We [state whether you do or do not] agree to use [include name of scheme].”
At present the following three alternative complaints bodies are approved:-
Clearly this or similar wording has to be used once the internal complaints procedure at the firm has been exhausted.
I advise that you also include the following in your Client Care Letter, which anticipates that wording, should there be a complaint and should the complaints procedure be exhausted:-
“At the conclusion of any internal complaints handling procedure you also have the right to complain to the Legal Ombudsman, full details of this, their address and our complaints procedure is set out below.”
I advise against having this information in a Conditional Fee Agreement or Damages-Based Agreement. It is perfectly proper and lawful, and indeed in my view advisable, for solicitors not to agree to utilise the scheme but I think that is better contained in the Client Care Letter rather than a Conditional Fee Agreement or DBA which is much more likely to be seen by the other side and the court who could take the point, albeit a dud point.
From January 2016 additional requirements will apply to online traders and online marketplaces, including, if appropriate, solicitors.
More information can be obtained from the Trading Standards website the January 2016 requirements stem from the EU Regulation on Consumer Online Disputes Resolution (ODR).
An online trader is defined as “a trader who intends to enter into online sales contracts or online service contracts with consumers” (Regulation 19A(7) of the Alternative Dispute Resolution for Consumer Disputes (Amendment) Regulations 2015).
This definition is likely to capture many solicitors who would not necessarily consider themselves to be online traders. The Department for Business, Innovation Skills, states that it will include solicitors who send and receive contracts, customer care information, etc. to clients via email and thus virtually every firm will be court by these new requirements.
The information to be given will depend on whether or not the Legal Ombudsman resubmits its application to the LSB and become certified as an ADR approved body.
If it does then solicitors will be required to:-
- provide a link to the ODR platform in any offer made to a client by email, and
- inform clients of;
– the existence of the ODR platform;
– the possibility of using the ODR platform for resolving complaints
The information in the second bullet point above must also be included in the general Terms and Conditions of online sales contracts and online service contracts, where such general Terms and Conditions exist. Thus that information will need to be in the Conditional Fee Agreement or Damages-Based Agreement as well as the Client Care Letter but there is no such requirement in relation to the information required from 1 October 2015 and indeed strictly that does not need to be in any document at the beginning but only included once the internal complaints process has been exhausted.
If the Legal Ombudsman does not become an ADR approved body by 1 January 2016 solicitors will be required to provide on their websites:-
- a link to the ODR platform
- the email address of the online trader
No decision as to whether the Legal Ombudsman will reapply for approval is expected until December 2015.
The Department for Business, Innovation Skills has issued detailed guidance for business.
This blog should be read in conjunction with my blog Consumer Contracts Regulations.
Please note these regulations have been subject of a very hard line by the courts – see Cox v Woodlands and the recent case of Allpropertyclaims Ltd v Mr Tang Pang and ITC Compliance Ltd [2015] EWHC 2198 (QB).
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