Monday, 13 February 2012

Pondering ADR

Well, the case is being evaluated by the arbitrator, we assume. They do not acknowledge anything (emails, paperwork, etc) which is a tad rude. So we assume the case is in hand. We will see.

I would hope they detail what exactly is claimed, and allow us to defend that. If not, then something is very wrong. I have asked. I got no reply.

But I am left pondering how the outcome can be anything but bad.

1. They could come back and say they should not have taken the claim and give us back our £335+VAT claim fee. That would be the best outcome. Obviously we would invoice them the cost for paper, ink, postage and time in preparing a case file if that is the case, and take them to county court when they do not pay.

2. They could make an award against us for up to £272. I.e. what we have already credited. But if the claimant is claiming less than already given the case should not have been taken. That is clear. Obviously having credited £272 we would not have to pay the claimant, but if the arbitrator should not have taken the case that sounds like we need to take them to county court for our £335+VAT case fee and costs if that happens. After all, if the claim was settled, why did they accept the claim? It would be vexatious at the very least. Of course we will also amend our credit note to the claimant to match the lower amount of the award so they have to pay us more as well. The claimant owes us a number of later invoices not involved in the ADR claim.

3. They could make an award for more, well in fact any award. We did nothing wrong (in contract) and so under law and our contract terms we owe nothing. We never guaranteed any delivery date, and anyway we met what they asked for, so there is no liability at all. If they make an award then they have not taken in to account the law and our terms, as they are required to by their terms of reference.

This last one will be interesting as the contract we have with them requires us to adhere to their final decisions made in accordance with the terms of reference, as does the OFCOM general conditions. We cannot appeal the final decision.

But, if the final decision was not made in accordance with the terms of reference, as this would be the case as our terms are clear on limits of liability, then we don't have to accept it or pay. We don't have to appeal it, we simply do not have to pay.

That will be interesting. They would have to take us to court and show they had followed their terms of reference, which would be tricky.

So, overall, it is hard to see what possible outcome there can be to the ADR which does not involve us, and the arbitrators, in the county court!

I'll let you know how it goes!


  1. We are suing the claimants for a number of unpaid invoices too - invoices they have not even disputed, and after the "event" that they got the line for. What is odd is that they have replied to the court saying they plan to contest the jurisdiction? We can only assume they believe the matter should be solved by ADR - but we cannot use ADR. ADR cannot make an award against the customer, so the court is the right jurisdiction. That will be fun.

  2. Please keep us updated on this - I'd like to know how it turns out.

    I have to say that I personally feel that ADR is a badly thought out idea - we should have focused on making people feel able to take their disputes to the existing dispute resolution service - the Small Claims Court. But, for some reason, we'd prefer to make the courts a scary and mysterious place, not somewhere you go once you've got a genuine dispute to deal with.

  3. Indeed, Simon. I think the "justification" for having ADR was because people are scared off by the small claims courts. Fixing that broken perception would have been much better. They are not scarey or expensive.

    What this has done though is make us have a much clearer and more specific customer complaints code. This case is especially crazy as the customer did not ever make a clear "claim" to us in the first place so was impossible to resolve. I am really unhappy that the arbitrator took the case rather than sending them back asking them to try again with a proper complaint and see how we handle it (even giving us a short deadline).

  4. ADR makes sense for B2C services, because (although it shouldn't be), to your typical consumer a court is a scary place, and thus having an ADR scheme means they're more likely to complain and get their problems dealt with. For B2B on the other hand it makes no sense - they should just say for B2B disputes you take it to court (with ADR available only if there is a dispute over whether the customer counts as a consumer or a business)...

  5. I tend to agree with Simon - courts should not be scary to consumers and that needs fixing. The court service could also be improved as I am sure many cases, even contested cases, could be sorted by email without a hearing. That would make them even less scary.

    This is a B2B case, but for some reason OFCOM decided that "small" businesses could use ADR. Of course I have no way to tell if a customer is a small business or not (I think it is based on <10 staff). I think even a small business, or at the very least any limited company (as this is) should know what they are doing and so not need ADR as a nanny state alternative to real courts. Of course much of the unfair contract terms legislation does not apply to B2B either, regardless of size.

  6. I guess the point in terms of B2C is that Ofcom can't fix the courts being scary to consumers, that's up to the Ministry of Justice, so all they can do is mandate an ADR scheme, but equating small business to a consumer doesn't make sense (and actually could be considered almost insulting to small business owners)...

  7. Alex:

    Ofcom could have made the courts less scary to consumers for telecoms services.

    For example, it could have obliged telcos to pay court fees if a customer sues them, and required telcos to provide a MAC and terminate any contractual tie-in early in the event they lost. It could have prohibited telcos from bringing lawyers to small claims court, and generally set conditions on telcos that made SCC no more scary than ADR.