On 1 October 2015, new regulations came into force that that will affect all businesses in the UK which sell goods, services or digital content to consumers.
Compliance is mandatory and failure to adhere to the new rules could result in the following:
- civil enforcement action by Trading Standards against your business
- court proceedings in which you may be ordered to adhere to the regulations
- an unlimited fine or a maximum of two years imprisonment if the court order was not complied with
Under the regulations, any business trading with consumers will have to provide specific details on how to resolve disputes through the use of Alternative Dispute Resolution (ADR). Your business must provide details of the name and website address of an approved ADR provider which is capable of facilitating resolution in the event of a dispute and whether or not you intend to use that provider. This information should be provided at the outset of a transaction in your business’ standard terms and conditions, on your business’ website and whenever your business’ internal complaints procedures have been exhausted.
If your business is regulated, it is likely there will already be obligatory ADR processes/providers in place e.g. in the financial services industry. If unregulated, or not subject to a prescribed ADR procedure, a list of approved ADR providers that consumers can be directed to can be found at http://www.tradingstandards.uk/advice/ADRApprovedBodies.cfm.
To clarify, the purpose of the regulations is to ensure that businesses give details of an appropriate ADR provider and that consumers are aware this is an option for them. There is no requirement to engage in an ADR process itself which remains a decision for the business to make.
At Linder Myers, we have a thorough understanding of commercial law. As well as helping to resolve disputes quickly, we can also advise on how to protect yourself, your business and your commercial interests.Find out more about our Commercial Litigation department Contact us