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Some of our members may be a little bewildered by recent changes regarding Alternative Dispute Resolution (ADR). ADR is a means of settling disputes without using the court system. It therefore involves lower costs, making dispute resolution more accessible. It often involves an independent, neutral third party.

The NFDA is here to help. All members can utilise a dedicated and independent ADR service at absolutely no extra cost. As part of your membership of the NFDA, you have access to an additional independent ADR service, the National Conciliation Service (NCS). The NCS is an independent, industry-focused ADR provider, certified by the Trading Standards Institute (TSI) as an EU complaint ADR entity.

First of all, what does Alternative Dispute Resolution mean for dealers?

This new regulation has many people wondering what exactly their legal obligations are or will be.

Most importantly, car dealers are under absolutely no legal requirement to offer ADR to their customers. What they are obliged to do is inform customers that these services exist, even if the dealer is not making use of them. There are a number of different ADR providers and you are not obligated to use any particular provider. However as an NFDA member you are automatically entitled to use the NCS, which is included in your membership fee.

This lack of legal requirement does not mean dealers can ignore ADR. Consumers may be suspicious of a dealership that does not offer such a service as the government pushes for ADR, rather than the courts, to become the main method of dispute resolution. So it is in a dealer’s interest to find an ADR provider that meets their company’s needs. As a member of a trade body, it will also be expected, but not required, that you will offer ADR. If the government achieves its aims, ADR will become standard practice in the UK.

Dealers might also be confused as to when ADR comes into effect. Although the regulation comes into force in July, the Department for Business, Innovation and Skills (BIS) has given extra time for businesses to reach full compliance. 1 October 2015 is the new deadline for businesses to ensure they are providing the correct information to consumers. This new deadline is also in line with the start date for changes to consumer law, through the Consumer Rights Act.

What this means for ADR is that by 1 October, businesses which cannot resolve consumer disputes internally will have to give consumers the details of a certified ADR provider. They will also have to indicate whether or not they intend to use them to resolve the dispute. As members will no doubt be aware and as mentioned above, the NCS was certified before the July deadline as an accredited ADR provider.

So what about the National Conciliation Service? What does it offer dealers?

The NCS is designed to cover the needs of dealers and consumers in the motor retail trade. NCS case handlers and arbitrators have worked in the retail motor industry and so understand sector specific issues.

As an accredited ADR provider, it is also a non-profit organisation. Members can therefore be assured that costs will not be allowed to spiral upwards.

The NCS covers the widest range of automotive disputes of the ADR services open to car dealers. It covers consumer disputes regarding sales and service contracts of motor vehicles and disputes over both new and used cars, with obvious advantages for dealers and consumers.

Posted by Sue Robinson on 03/07/2015