Consumers need to know that if something goes wrong with a transaction, there are effective ways of handling complaints and getting redress. Going to court to enforce your rights can be costly and time consuming, particularly if the trader is in another country. Good Codes of Practice and Alternative Dispute Resolution (ADR) schemes can often offer a range of remedies that can be less costly and less daunting.

 

Codes of Practice

Codes of  practice can help to protect consumers’ rights and can offer consumer protection and service above the basics set down in law. They can improve consumer confidence and help businesses because they are easily modified so can keep pace with rapid market developments.

The Government believes that self-regulation by means of an effective code of practice can, in some areas, be a viable alternative to regulation. This is because legislation can be inflexible and difficult to change. Regulation can also impose unnecessary bureaucracy and additional costs upon business that can have a knock on effect for consumers through increased prices.

The Enterprise Act 2002 formally empowered the Office of Fair Trading (OFT) to approve codes of practice. The Consumer Codes Approval Scheme will cover the whole range of operations of business sectors, and OFT’s core criteria have been designed to cover both offline and online activities.

The Government is following the evolution of plans for a European codes scheme being coordinated under the European Commission’s e-confidence initiative.  Draft principles for codes of good practice have been developed in close collaboration with business and consumer representatives.  Building on this work, the Commission announced its intention to publish a policy document on online consumer confidence.

Internationally, the UK supports work in the Organisation for Economic Cooperation and Development (OECD) on policy on codes of practice and continuing work on the Guidelines for Consumer Protection in the Context of Electronic Commerce.

Alternative Dispute Resolution (ADR) schemes (such as ombudsmen and arbitration) can offer low cost, user friendly alternatives to going to court. The Government believes that such schemes can make a valuable contribution to consumer confidence in the UK, in the single market and in electronic commerce.

DTI is developing the UK-end of the European Extra-Judicial Network (EEJ-Net) which aims to improve consumer access to out of court schemes in cross border disputes.  Each Member State, plus Norway and Iceland, has set up a national clearing house to provide the necessary links.  Citizens Advice runs the UK clearing house operation.

Background information on the EEJ-Net is available on the European Commission website: http://europa.eu.int/comm/consumers/redress/out_of_court/eej_net/index_en.htm

"Seeking Resolution", NCC Report on Alternative Dispute Resolution

Published in January 2004, this report on the availability and use of consumer to business Alternative Dispute Resolution (ADR) in the UK was commissioned by the DTI to help it meet its obligations to the European Extra-Judicial Network and to inform its policy development in relation to redress.

The National Consumer Council's (NCC) study was primarily a fact-finding exercise, focusing on independent ADR schemes such as mediation, arbitration and ombudsmen. 

The report acknowledged the potential of ADR, which it says can save consumers time and money, offer a range of remedies and be less daunting than the court system.

The report concluded, however, that access to ADR is a lottery and that there is a gap between the Government’s policy of promoting ADR and the practical situation facing consumers.

NCC Report on ADR (93 pages).
Appendices to Report (70 pages).
Tables (8 pages).

Research into Consumer Redress

2004 Research

The statistical evidence base on redress is limited. Late 2004 the DTI commissioned YouGov Plc to carry out research into the number of consumers in Great Britain who have had claims against traders, their value, the products and services concerned and the means by which disputes were settled.

The research found that almost half (45%) of people surveyed had experienced problems with purchases. Many of these had been resolved without too much trouble, with very few claims going to the courts or alternative dispute resolution (ADR) schemes such as ombudsmen. However some consumers gave up or failed to achieve anything with their claims.

Summary of Findings (4 pages)
Full Report (40 pages)

2005 Research

Phase One Report (17 pages)
Phase Two Report (28 Pages)
Summary Report (19 slides)

Provisions of private international law (PIL) are also relevant to cross border transactions and disputes. The Department for Constitutional Affairs leads on PIL issues in Whitehall.

The 1968 Brussels Convention, which deals with jurisdiction in cross border civil and commercial disputes, was replaced by a Community Regulation in December 2000;

The 1980 Rome Convention deals with which country’s law applies in contractual disputes.  On 14 January 2003 the European Commission presented a Green Paper on the question of whether the Convention should be converted into a Community Instrument (a Regulation or Directive).  A proposal is expected in the first half of 2005;

On 22 July 2003, the European Commission presented a proposal for a Regulation on the law applicable to non-contractual Situations, known as Rome II. The proposed Regulation would affect the treatment of claims involving defamation, advertising, intellectual property rights, and product liability. Click here to view the Commission’s draft document.

DTI guidance on the general rules and consumer provisions of the above legislation.

Contacts

 

DTI Enquiry Unit dti.enquiries@dti.gsi.gov.uk

020 7215 5000