Friday, 3 February 2012


I have to post something - I am so stressed over this - if I post on here I will feel I have parked the problem, at least for now. Sorry it is long and boring...

This should be a case for putting on our web site as a major success story. It was a company wanting to stream live video from a site in London for coverage of the Royal Wedding last year. They wanted (rather adventurously) to do it on ADSL lines, needing something like 8Mb/s uplink. We managed to get the lines in with a FireBrick doing bonding so that they had around 9Mb/s upload, and all in time for the event. They streamed videos on the day. They even paid the bills (which is not cheap for 4 PSTN lines with ADSL2+ and annex M).

What made it even more of a story is that our favourite telco messed up the records on two of the lines which meant they could not accept an order for annex M (faster upload) as they did not have the line length details. It took Shaun a hell of a lot of work to get that sorted, and he knew he was working against the clock and he managed it. There are logs of him chasing our favourite telco at 2am in some cases. It was a real case of A&A staff going the extra mile, well over and above the contractual requirements to help a customer. All of the staff involved kept them informed the whole time and handled numerous questions and changes to dates and messing around very professionally and politely.

I was pleased, and the customer said they were happy with the service even.

Then we get a dispute from them - they think that they should not have to pay the install price for the lines because of the delay getting annex M on them.

What? That makes no sense. We installed the lines and got annex M and all in time. But they say they needed time to demonstrate to potential customers, and as they did not have time then did not sell as much streaming as they expected. It does not make a lot of sense as they say each stream was 2M, so they could have demonstrated as soon as they got the first 2 lines in long before the event. The delay was getting the final two annex M upgrades. Even so, them not getting customers is hardly our fault as we didn't agree an install date. In fact we make it a clear and explicit part of the contract that we don't guarantee an install date.

We explained that it made no sense. Was he saying he has losses that happened to be exactly the same as the line install costs? Anyway we were not in breach of contract, and anyway we exclude consequential losses even if we were. Sorry...

He starts spouting implied contract terms but cannot say what and where from, and that his claim is not entirely for breach of contract but cannot say what for. He even quoted Sale of Goods Act clauses relating to equipment sales, when he had not in fact complained about the equipment supplied in any way at any time, and clearly it worked as it should have. It really made no sense at all.

Even so, we did issue a good will credit for £272 which was various of the service costs before all 4 lines were working together. We did not have to, but we are nice like that.

He seemed confused by the credit. Anyway, the final email in the dispute was mine asking him to simply and clearly list exactly what he is claiming for, why, and how much. I hear no more.

Months later - The Ombudsman Service say they have a claim. The claim says we have been unhelpful and they lost business due to the delays, and states how much they have paid. It also says how much the calculate they should have paid which is £7 less. We told the Ombudsman that £7 was clearly a frivolous claim, and already more than settled, but they are going ahead anyway?!?!

Today we sent them the case file - something like 500 pages. Good luck!

ADR is Alternative Dispute Resolution. Its required for telcos like us to be part of such a scheme allowing people to take a dispute to an arbitrator instead of the county court.

This is our first case ever. No customer has taken us to ADR or court in nearly 15 years in business, and that alone is stressing me. We strive to provide good service, and to resolve disputes fairly ourselves. How can any case go as far as ADR?

The problem is, even if the arbitrator is sensible and sees we did not breach the contract and we actually bent over backwards to get the service they wanted in time in spite of serious problems (beyond our control) from our favourite telco, and as such there is no case to answer and no award... We pay £350 for that.

Yes, even a totally bonkers case and even if the arbitrator agrees it is a totally bonkers case... we pay £350.

What the hell!?!?!?!?!

We will have to see how the case pans out. In the mean time said company has paid none of their subsequent ongoing service bills, and so we are taking them to county court! Madness.

I think, certainly for business customers, we have to have a clause requiring them to pay us if they bring an invalid case to ADR. No idea if that is enforceable, but at least it is "fair". Maybe that would go to county court if I have that clause - I wonder how a county court judge would rule on the fairness of a clause forcing a "loser pays" arbitration system when, err, that is the system the country court operates... Hmmm.

P.S. had my annual diabetic review today (see other blog post) and for the first time my blood pressure was up - I was awake half the night just stressing on this whole thing being "wrong" so I am not surprised. It is not even the money - £350 is not an issue, obviously - its the injustice that stresses me.

P.P.S. I forgot the "sound bite" type paragraph for ispreview to quote...

A&A have long had concerns over the whole ADR scheme, and this case just shows how it can be abused. A clear case of A&A falling over backwards to help a customer and go way beyond the agreed contract terms, and then having a £350 bill thrown in our faces. ADR is unfair - buy definition - it is a "one-side pays regardless" arbitration scheme unlike the much cheaper country court small claims track where loser pays. We are even tempted to offer customers a scheme where we will pay their fees up front for taking us to court rather than ADR if they have a dispute, after all such a scheme would be a tenth of the cost in most cases.


  1. No good deed goes unpunished.

  2. Just add the ADR case fee to your claim at the county court and see what happens!

  3. To be fair - this is only my side of the story - and we have yet to see a vaguely sane "their side" yet. That is half the problem, of course.

  4. I may be missing something, but...

    Surely **if** they lose at ADR and you suffer a loss as a result of your win (or, as a direct result of their actions, if you prefer), you have every right to claim that loss from them - after all, if you'd have had any choice in the matter you'd have chosen the courts over ADR...

    Personally, I'd take them to court for it just to see what a judge says.

    The world would be wonderful without (some) customers!

  5. Bother, meant to add...

    Mind you, I know a good-will gesture is meant to be just that, we learned the hard way that accepting any liability (even by way of offering a good-will gesture) can influence a judge adversely.

    If we think something may end up in court now, we don't give an inch.

  6. Hello :-) I was an AAISP customer a few years ago - satisfied throughout! - and just came across this blog. It's late and I can't sleep so I'll make an excuse to finally get a Blogger account and babble a bit...

    As far as I can tell, it's fairly standard for the cost of ADR with a consumer or sufficiently small business (check - does Ofcom require it to apply to all types of client?) to be borne by the respondent. Banks similarly have to pay £500 odd per case to the FOS regardless of the outcome. To the bank it could be either seen as one of the annoying costs of regulation or, to quote a recent conversation with a bank manager, "good public relations". To accept such regulation is to have sufficient confidence in the quality of your business that you are prepared to take on the risk. While there may be regulation preventing a punitive measure to be taken against someone who wins in ADR - i.e. you don't get to close someone's bank account just because it was decided some charge you levied was unfair - banks frequently exercise their prerogative to terminate (with regulated notice) relationships with annoying customers who have been treated fairly. That is perhaps an option available to you - just as, say, someone who sends goods back all the time under the DSR would probably be blacklisted.

    Part of the traditionally "overriding objective" in civil procedure implies an expectation that you try everything else before taking up Court time. As you will know, only very scant legal costs can be passed to the loser in the Small Claims track and assignment of remaining costs (fees plus expenses) is limited and always at the judge's discretion. In particular, the judge may refuse to burden the loser with fees if the Court is being used as a first resort just because it's cheap, occasionally making things particularly difficult. Fees are cheaper than ADR because they do not represent what it actually costs to run the Court for that amount of time - it's a limited Treasury-funded government resource allocated vaguely according to need and the claimant simply contributes a small amount according to some interesting formula. I guess it was tongue in cheek but I don't see any basis for clawing back the £350 on the current case: it's simply one of your business expenses. And I'm guessing your ADR provider's scheme rules make it clear that you pay fees and that Ofcom wouldn't approve of any scheme which leaves the possibility open for you to add a term about client paying ADR fees in the contract.

  7. So it might be clear on the facts to you that the customer's claim is absurd but someone has to pay for the full cost of a third-party professional to decide that. You're paying £350 for (hopefully) well-trained mediators to look through enough of those 500 pages. You're expected to pay this because your business is an area where it has been decided that certain regulation is appropriate: you as a telecoms provider (i) have the privilege of profiting from basic services which form in some sense a natural monopoly; and (ii) tend to have greater knowledge and power than the consumer. To you it may feel that the customer is just being a dick and you might be right, but it is hard to judge someone to be maliciously abusing a system rather than merely ignorant or illogical. The aim here is clearly not to punish the latter lest legitimate grievances be not heard. The fact that it's taken 15 years for one person to even call on ADR, let alone do so in a way that appears absurd, suggests that ADR-like schemes aren't treated as an open door to abuse.

    If you want to argue for something more reasonable for you and which isn't going to put any extra burden on the consumer, i.e. which isn't also potentially denying justice and/or bad PR, perhaps object to all disputes being charged the same. It seems reasonable, for example, that you should be charged a discounted rate where there are no questions of fact, just as a Court might then issue summary judgment / not require a full hearing - and charges slightly less.

    As for the diabetes, I hope things go smoothly. I have a few extended family members with diabetes and one has been injecting herself daily for as long as I can remember. With a degree of discipline you should hopefully find that it does not interfere much with your daily activities!

  8. Thanks Tom, an interesting view. Naturally I am seeing it as a huge injustice, as I would from this side. It wll be interesting to see the outcome.

    It would be a shame if we were discouraged from helping people by this. After all, we could have, right at the start, have said, sorry, nothing we can do, all someone else's fault, tough, and stuck to the hard line of the contract terms. Would have been a lot easier. May even have avoided ADR if every answer from the start was reiterating the fact we can't guarantee a delivery date instead of trying our damnedest to meet their requirements.

  9. Tom mentioned the FOS (Financial Ombudsman Service), and said that "Banks similarly have to pay £500 odd per case to the FOS regardless of the outcome."

    But what he didn't mention was that companies subject to the FOS don't start paying case fees until the 4th case in a given year. This is to the benefit of small companies that get few complaints.

    ("This is because we don’t charge a business a case fee for the first three cases each year. And around three-quarters of businesses with complaints have fewer than four cases." -- source )

    It strikes me that this would be a much fairer approach for ADRs, and would similarly protect small ISPs from the costs of infrequent ADRs.

  10. That sounds much better, and would be even better if you only pay once you lose X cases...

  11. Indeed, Martin, although note that less than 1 in 6 of FOS enquiries become chargeable cases - if they don't already do it, different charging levels seem better than a "3 free cases with your subscription" offer, subscription fee already being determined by business size. As for "no loss, no fee", the fees exist to discourage a business choice of ADR (ideally only in cases with substance) in favour of being nice - if you eliminate them then you increase caseload and delays as businesses confident of a win can just twiddle their thumbs for 8 weeks. Note that the range of proportions of chargeable complaints found in favour of the consumer seem to vary wildly by firm+department.

    Going back to my earlier waffle, even though the Civil Procedure Rules and Woolf's Access to Justice seem to take a dim view of those who would too hastily dare to actually use the civil courts to solve civil disputes, perhaps take heart in [2004] EWCA Civ 576 confirming (one commentary) that, should you go straight to Court rather than waiting for the other party to begin ADR or starting it yourself, a win is still likely to include costs unless you acted unreasonably in refusing ADR.

    Also from [2002] EWCA Civ 756, where Court+ADR+settlement has solved the substantive issue but given liberty to the parties to otherwise resolve the issue of costs, it seems that a Court can still decide to make a costs order if it is clear how it would have decided the (remaining) substantive issue. Perhaps this is not relevant if your ADR scheme is already clear that "ISP always pays" but it does open the possibility for ADR schemes where only the question of costs can be referred to a Court ("without prejudice save as to costs"?).

    Hopefully the good reputation from your IME excellent customer service will outweigh any loss from one or two insane ADRs. The squeaky wheel needs grease but the square wheel just needs discarding, or something... :-).

  12. The fact the courts can decide who pays costs is good. I would be happy if ADR allowed for the claimant to have to pay ADR cases in such cases where they really should not have brought a case.

    This case is one where our last word to the claimant was asking them to clearly state exactly what they were claiming for, why, and how much in a clear list.

    They did not - they went to ADR. That alone should be reason to either refuse ADR to them or expect them to pay costs if they lose.

    But right now people can take an ADR case, and say what they like to the arbitrator to get the case taken, and then leave the ISP footing the bill no matter how bogus the claim was.

  13. Hmmm... ultra vires...

    Section 9 of the generic Terms of Reference and section 4 of the Communications annex might allow you to find a reason why the Ombudsman shouldn't have "accept[ed] a complaint for consideration". For former:

    9.1(a) did the customer actually give notice to you of the matter they've complained to the Ombudsman about? It sounds like the first you heard about this £7 was in the Ombudsman material.

    9.2(b)(ii) since he simply stopped communicating with you, is it "reasonable" to expect that you should have sent a deadlock letter after only 8 weeks?

    9.2(c) had 9 months passed since first notice?

    9.2(f) is the complaint frivolous or vexatious? £7 probably isn't "frivolous" but perhaps obtaining a credit and then making a complaint to the Ombudsman as if you hadn't received that credit (if I understand your description) is vexatious.

    9.2(g) could the complaint be regarded as about your commercial judgment in determining on what terms a service is provided? I.e. are they complaining about your commercial decision not to promise a specific install date (and consequential losses from that)?

    For latter:

    4(a)(ii) Is the customer actually a "small business"?

    (One perhaps interesting question is whether increasing direction from the public justice system to use ADR should mean that e.g. fabribating evidence in ADR should be regarded as perverting the course of [public] justice. It certainly can apply at tribunal.)

  14. We have raised many of these issues already. They have decided to go ahead and so we have to pay, apparently. We wlill see how it goes.

  15. OK. Been interesting to read up on their process. Cheers, hope it turns out well and have a good weekend :-).

  16. As a wholesale A&A L2TP customer, I make no bones about the fact that our monthly invoice is the only one which I'm actually *cheerful* about paying as I have had nothing but praise for your staff - they (and you) deserve every penny.

    The only complaint I could make was that you didn't make it clearer on the A&A website that you offered wholesale ADSL services in the first place - it would have done wonders for my blood pressure if I had known sooner ;-)

  17. The wholesale is very new. It has been a bit informal for a couple people in the past, and now is more of a proper service. That said, the proper billing is only in place this month and being tested now. So it sort f wasn't available earlier. Sorry.

  18. We have just come up with another fly in the ointment for this ADR case. It looks like the ombudsman cannot take cases that are disputes between providers of telecommunications services. i.e. we could not use ADR against BT for example even if we were still small enough to count as a small business.

    But the customer in the case provider commercial video streaming services. I think that makes them a telecommunications service provider themselves...

    So I think they are not even eligible to use the ADR in the first place!

    I have asked the ombudsman that one too!

  19. Damn, re-reading that it may be only if both parties are signed up to the same arbitrator.