Alternative Dispute Resolution

The following laws require businesses to, in some cases, inform consumers that they can use Alternative Dispute Resolution (ADR) to resolve a complaint, before taking it to court:

• The Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013 (Consumer Contracts Regulations)
• Digital Markets, Competition and Consumers Act 2024 (DMCCA)

ADR is a way of sorting out disagreements without going to court. For example:

• Mediation: a neutral person helps both sides talk things through and try to reach an agreement.
• Arbitration: a neutral person listens to both sides and makes a decision to settle the dispute.

Under the DMCCA, if a business provides goods, services or digital content and replies to a consumer's complaint about their contract, it must also tell the customer about any ADR (or similar option) available to the consumer in case they are not happy with the outcome.

However, this only applies if the business is required to use ADR because of:

• a law that applies to their sector;
• rules of a trade association they belong to; or
• the contract terms.

The consumer's complaint can basically be about anything to do with the contract, including:

• how it was made;
• what the business did before or after it was made;
• the business's responsibilities under it; and
• how well the business carried out those responsibilities.

Under the Consumer Contracts Regulations, for distance sales (like online sales) businesses must give information to the consumer, before the contract is made, about any out-of-court complaint or dispute schemes that the business is part of, and how customers can use them.