Using alternative dispute resolution to solve a problem

You might be able to solve a problem that you have by using alternative dispute resolution (ADR). For example, you might use ADR if you have a dispute with:

• a neighbour 

• family or an ex-partner

• a company, trader or seller – this is called a consumer problem.

ADR describes different ways you can solve a problem without having to go to court, like mediation.

Using alternative dispute resolution 

You might use alternative dispute resolution (ADR) instead of going to court. You can also use an ADR scheme to narrow down the problem before you go to court.

The main advantages of solving a problem with ADR are:

• it's usually cheaper, more flexible, faster and less stressful than going to court

• you might receive compensation

• it's confidential.

In most ADR schemes, a decision will be made based on the paper evidence you and the other party send in. You won’t always have to attend a hearing.

Some ADR schemes are legally binding. This means that you won't be able to take your case to court if you accept the decision from ADR but later change your mind.

What types of ADR are available

The main types of ADR available for solving a problem are:

• conciliation

• mediation

• arbitration

• ombudsmen - in some consumer problems.

In consumer cases, the schemes might be offered to you by a trade association.

You can read more about services you can use and alternatives to going to court on mygov.scot.

The Faculty of Advocates has a dispute resolution service. This is a specialist service offering resolution processes including arbitration, mediation, and adjudication. Members providing the service can also offer an expert determination. You can check what is available on the Faculty of Advocates website.

Before choosing alternative dispute resolution 

Before choosing alternative dispute resolution (ADR), you should ask yourself the following questions:

• what do you want

• how much time do you have

• do you want to avoid meeting the other side in person

• how much will it cost to start the process

• will you have to pay the other side’s costs if you lose - in most ADR cases, each side pays their own costs, although in arbitration, the arbitrator can apportion costs if you and the other side agree to this

• do you want the option of going to court as well as ADR

• is there a time limit in which you have to act.

In consumer cases, you should also consider whether the trader is still trading.

Conciliation

Conciliation is usually free to use and is often offered first because it's less formal than arbitration.

Conciliation involves a conciliator who focuses on what you and the other side want and tries to find a way of solving the problem that you're both happy with. The aim is to reach an agreed solution that suits you both.

If you have a consumer problem, the contract you have with a trader might ask you to use their own conciliation service before you can use independent arbitration. You should check if they charge for this service and how long it will take to use.

If there's a clause in your contract about having to use conciliation, it might be an unfair term if:

• you have to pay

• the conciliation process means it takes longer to solve your complaint than it should.

Some local trading standards officers also offer a conciliation service. They'll be able to tell you if your local office offers conciliation and refer you for help.

Read more about reporting a problem to Trading Standards.

If you're not sure if you should use a conciliation service that’s offered to you, you can get advice from an experienced adviser, for example at a Citizens Advice Bureau. Find out where to get advice.

If you don't agree with the outcome of the conciliation, you might be offered independent arbitration, or you can choose to take your case to court.

You can make an agreement from a conciliation legally binding if you make a written agreement.

Mediation

With mediation, a mediator will help the 2 sides in a dispute to focus on the issue and consider the best way of solving it. The needs of both sides are taken into account, and you'll try to find common ground to find the best solution to the problem. The mediator is not there to make a decision but will help both sides to agree a solution.

Mediators might be employed by the organisation you're complaining about, but they should be trained to be impartial and help both sides reach an agreement.

You can make a mediated agreement legally binding if you make a signed mediated agreement.

Paying for mediation

You might have to pay for mediation, depending on the provider.

If you can't afford it, you might be able to get legal aid to help with some of the costs. You should look for a mediator who does legal aid work.

Finding a mediator

You can find a mediator through the Scottish Mediation website. 

Arbitration

Arbitration uses an independent arbitrator, usually from the Chartered Institute of Arbitrators (CIArb), to make an independent decision about your complaint. 

The decision the arbitrator makes is legally binding. You won't be able to go to court later if you don't agree with the outcome.

In many arbitrations, there is no court hearing. The decision made by the arbitrator is made from the papers sent in and the evidence that has been presented by you and the other side. You might have only given evidence in written form, or you and the other side might have been asked to tell the story of your position on the dispute.

Some arbitration schemes are free to use. If you choose independent arbitration, you'll have to pay a fee. You might be able to get the fee back in an award from the arbitration if you win the argument.

Read more about how an arbitrator decides the outcome of a complaint.

Ombudsmen

Ombudsmen cover many services, including:

• estate agents

• retail services

• financial companies, such as banks, building societies, insurance companies and pensions

• energy, telephone and internet companies.

Ombudsmen are free for consumers to use, but traders have to pay.

You can use an ombudsman if:

• you've used the organisation's internal complaints service first, and

• it’s been longer than 8 weeks since you made your complaint, and you and the trader can’t agree on what to do.

Ombudsmen look into how a decision was made. This is more important for them to investigate than the decision itself. They also assess if there has been any injustice.

You'll need to supply paper evidence to the ombudsman, who looks at it and then makes a recommendation or ruling. Depending on which ombudsman you use, the decision that's made can be legally binding.

For example, the ombudsman who deals with energy, communications and property complaints can make a recommendation to the trader about what to do. But the financial ombudsman can order a company to do something. This is because it has greater legal powers.

You can still take court action if you're unhappy with the decision, but the court will take the ombudsman's decision into account when it makes a decision.

Traders who offer alternative dispute resolution 

Many traders have their own recognised alternative dispute resolution (ADR) schemes. Some of these schemes cover:

• tour operators that are members of the Association of British Travel Agents

• builders and tradespeople who are members of the Federation of Master Builders

• telephone and internet providers that are members of CISAS or Ombudsman services

• furniture removals companies that are members of the British Association of Removers

• furniture, home improvement and floor covering suppliers that are members of the Furniture Ombudsman.

Traders who show Safebuy and Trustmark symbols also offer ADR services.

If your complaint is with a trader who belongs to any of these trade associations, you should contact them directly to find out more about the ADR schemes they offer.

If your complaint is about other goods or services, you should be able to find out if the seller has an ADR scheme by checking their:

• website - try searching for ‘dispute resolution’ or ‘complaints procedure’

• ‘terms and conditions’, either on their website or in any emails or paperwork they’ve sent you. 

If you can’t see anything about ADR, look for phrases like ‘what to do if you’re still unhappy’ or ‘escalating your complaint’. If it says your complaint will be passed on to another organisation, it’s likely to be an ADR scheme.

Contact the seller if you’re still not sure, you should find contact details on their website.

Keep a record of any contact you have with the seller about using ADR. You’ll need it if you end up taking your case to court.  

More help

If you need more help, contact Advice Direct Scotland's consumer service or a Citizens Advice Bureau. Find out where to get advice.