Designing Consumer Redress · the implications of the new directive and consider the design of the new system of consumer redress. The workshop brought together key players in the

in association with the Centre for Socio-Legal Studies and Wolfson College, University of Oxford

DesigningConsumer Redress:

Making Redress Accessible for

Consumer-Citizens

Carol Brennan, Naomi Creutzfeldt,Chris Gill, and Carolyn Hirst

The Foundation for Law, Justice and Society

European CivilJustice Systems

Policy Brief

www.fljs.org

Creutzfeldt-Designing Consumer Redress PB Rev 1.qxp_Layout 1 07/08/2015 13:19 Page 3


© The Foundation for Law, Justice and Society 2015

European Civil Justice Systems

The European Civil Justice Systems programme aims to evaluate all options for disputeresolution in a European state, and to propose new frameworks and solutions. Itencompasses a comparative examination of civil justice systems, including alternativedispute resolution and regulatory redress systems, aspects of system design, procedurefunding and outputs. It aims to analyse the principles and procedures that should, or doapply, and to evaluate effectiveness, in terms of cost, duration, and outcomes in redress andachieving desired behaviour.

The programme also involves research into substantive EU liability law, notably consumerand product liability law, harmonization of laws in the European Union, and in particular thechanges taking place in the new Member States of central and Eastern Europe.

Support for this public engagement workshop was provided in part by a grant fromCarnegie Corporation of New York. Carnegie Corporation of New York is a philanthropicfoundation created by Andrew Carnegie in 1911 to do "real and permanent good in thisworld."

The workshop organizers would like to thank all those who presented papers and all theattendees who contributed to the excellent and stimulating discussions during the event.We also thank Dr Nick O’Brien for chairing the workshop and contributing to this policybrief.


n To improve access to justice for consumers in the European single market, an EU

Directive on consumer Alternative Dispute Resolution (ADR) (2013/11/EU) was

introduced in May 2013, and came into force in every EU member state on 9 July 2015.

The Online Dispute Resolution (ODR) Regulation (2013/524/EU) will be implemented in

January 2016.

n The implementation of the EU ADR Directive and ODR Regulation, together with the

Public Administration Select Committee (PASC) reports in 2014 (“More Complaints

Please!” and “Time for a People’s Ombudsman Service”), the Gordon Report, and Public

Services Ombudsman Bill provide an opportunity for reassessment of ombuds and

other redress institutions.

n Models of institutional design throughout Europe are diverse, and, within the UK,

confusing and fragmented. Models of informal resolution within UK ombuds schemes

are also diverse.

n User needs and wants are not homogeneous, nor are they necessarily compatible with

the priorities of other stakeholders. There is scope to take greater account of users’

needs and wants.

n Despite differences of emphasis, both public and private dispute resolution are, in

principle, susceptible to common design. However, ADR may be of limited value in the

public sector, where the prospect of people ‘bargaining away’ their rights is not

attractive (although ‘rights-based conciliation’ has been practised with some success).

One possible common model would seek a bipartheid approach between regulation

and consumer redress and take as its four pillars of consumer redress: advocacy; advice;

enforcement; redress.

n A new Consumer Dispute Resolution (CDR) model provides a five-step process for the

systematic design of consumer redress mechanisms: (1) a research phase; (2) a goal-setting

phase; (3) a system design phase; (4) a process design phase; and (5) an evaluation phase.

n Administrative justice itself is under threat, from austerity measures, court closure, court

and tribunal fees, denial of rights of appeal, etc. The demise of the AJTC is a

disappointing retreat from a holistic approach to design across ‘the system’. There is also

a danger of loss of institutional memory in respect of dispute resolution and redress.

n The name ‘ombudsman’ may itself be problematic, on gender-specific, definitional, and

public recognition grounds.

n Technological advances are already engendering new ways of doing things, including

automated and online decision-making.

Executive Summary

MAKING REDRESS ACCESSIBLE FOR CONSUMER-CITIZENS . 1


The use of early resolution in ombudsmanand ADR schemes

To improve access to justice for consumers in theEuropean single market, an EU Directive onconsumer Alternative Dispute Resolution (ADR)(2013/11/EU) was introduced in May 2013, andcame into force in every EU member state on 9July 2015. With the implementation of the ADRdirective, systems and processes will now be in thepublic spotlight, bringing to the fore some of theexisting issues and presenting new challenges thatface policymakers, practitioners, and academicsworking in this field. One crucial question in thesedevelopments is how to ensure, through goodredress design, that the provision of redress ismore accessible for more people.

Access to consumer redress is an area undergoingsignificant change, particularly in light of theimplementation of the EU’s Alternative DisputeResolution Directive and the forthcoming OnlineDispute Resolution Regulation. In the publicsector, the scene is similarly shifting, with anumber of upcoming changes proposed to theredress landscape for public service complaints.Various commentators appear to have an appetiteto simplify the landscape. One of the challenges ishow best to focus on the consumer or citizen inredress design, and how to adapt to the evolvingpolicy environment while meeting consumerneeds and wants.

Introduction to consumer redress design

Consumer detriment in the UK has been estimatedby the Department of Business, Innovation andSkills to be £4.15 billion in 2014, up by over £1billion since 2012. This is largely concerned withpoor goods and services. Consumers thereforeneed access to effective systems and processes toresolve their complaints. However, the redresslandscape can appear to be very complex and

confusing for consumers. Developments in ADR mayfurther fragment the landscape in the future as newschemes develop. Consumers are often notconcerned with whether it is a private or publiccomplaint or worried about which door they gothrough. But they do want good standards andclarity in relation to access.

Researchers from Queen Margaret University,Edinburgh and the Centre for Socio-Legal Studies,Oxford convened a workshop at the ConsumerInsight Centre at Queen Margaret University,Edinburgh on 11–12 June 2015, to better understandthe implications of the new directive and considerthe design of the new system of consumer redress.The workshop brought together key players in thefield of ADR and ODR from the UK, Europe, Canada,and New Zealand, with the aim of exploring newways to encourage and enable greater numbers ofpeople to access good quality consumer redress.

Participants discussed the viability of a ‘one size fitsall’ design for consumer redress, whilst consideringalternative access mechanisms to resolve grievances.Consumer and citizen redress schemes werecompared in order to assess what aspects can beapplied to both and what is unique to each. Theaccessibility of current redress systems wasexamined, including the gaps and challenges, andfocus was placed on ‘what works’ in practice. Gooddesign may enhance accessibility, but what elsemight be needed? Good design may be useful ininforming the work of the new ‘CompetentAuthorities’.

The question of whether there should be a preferredmodel for ombudsman institutions within consumerdispute resolution (CDR) was explored. Theimportance of advice, assistance, support, andsignposting to consumer redress design werediscussed. The workshop also provided theopportunity to explore developments in Scotland,the distinct model in operation and the role of the

Designing Consumer Redress: Making Redress Accessible forConsumer-Citizens

2 . MAKING REDRESS ACCESSIBLE FOR CONSUMER-CITIZENS


complaints standards authority at the Scottish PublicServices Ombudsman (SPSO) and new opportunitiesto streamline consumer redress.

Chris Gill (Senior Lecturer in Administrative Justice,Queen Margaret University) provided anintroduction to dispute system design (DSD). Heargued that both individual consumer disputeresolution (CDR) mechanisms, and the resultantlandscape for consumer-to-business disputes, havetended to be developed in an ad hoc andunprincipled fashion. The presentation proposed anew DSD model for CDR mechanisms, the purpose

of which is to assist those tasked with designingnew, or reviewing existing, dispute resolutionmechanisms.

In addition to offering a practical tool for legislators,policymakers, and practitioners, the model makesthree contributions to the scholarly literature onDSD: it synthesises existing models, it focuses ondesign choices rather than design prescriptions, andit is designed for the particular context of consumer-to-business disputes. Figure 1 shows the new CDRmodel.


Dr Naomi Creutzfeldt (ESRC Research Fellow,University of Oxford) presented selected findingsfrom her ombudsman project(http://www.law.ox.ac.uk/projects/Ombudsmen).She discussed ‘consumer redress: what people expectfrom an ombudsman’, based on her UK dataset ofseven public and consumer ombudsmen bodies.Despite finding that the empirical data supportsdistinct expectations of ombudsmen-users for publicsector ombudsmen to deliver accountability andconsumer ombudsmen to provide individual redress,there is a dominant and shared narrative amongst all

of the 1310 surveyed people. An ombudsman isexpected to be a professional middle-man to clarify,influence, protect, and enforce for the citizen/consumer.This translates into four roles that users expect fromthe ombudsmen: 1) Interpreter — “to help meunderstand what it’s all about”; 2) Advocate — “tohand over my problem”; 3) Ally — “to share theresponsibility”; and 4) Instrument — “they have theright tools to help me”. These roles are expected ofboth public and consumer ombudsmen in the UK.The data also reveals that people’s expectations ofthe CDR bodies exceed their actual responsibilities.

Figure 1. Dispute System Design Model for Consumer Dispute Resolution Mechanisms (CDR Model)


Further, people’s expectations change throughoutthe complaint process. Therefore, it is essential tomanage expectations from the first contact acomplainant has with the ombudsman. This, amongother measures, will help build trust in theombudsman institution.

Carolyn Hirst (Lecturer in Ombudsman andComplaint Handling Practice, Queen MargaretUniversity) discussed the use of informal resolutionapproaches as alternatives to investigation anddetermination/decision by ombudsmen in the UKand Ireland. This mapping study found that someterms used by ombuds to describe their informalresolution processes meant different things inpractice, and conversely, similar terms are used todescribe quite different processes. This can confuseconsumers and made attempts to compare ombudsand complaints handlers unduly difficult. The studyalso found that only a few schemes adoptedtransparent guidelines for using informal resolutionand that complainants and those complained abouthad little choice in which process to use. It was hardto understand what actually happened in practice,which led to a concern that informal resolution wasbeing used for reasons of expediency (being fasterand cheaper than investigation). There was also littleinformation in the public domain about the outcomeof informally resolved complaints.

The research concluded that, since many ombudshave an administrative justice or civil justicefunction, an emphasis on informal resolution coulddeprive wider society of knowledge about complaintoutcomes. Individual and informal resolution,particularly when confidential, can result in a lack oftransparency and accountability, and can adverselyaffect precedent-setting and mitigate the benefits oflearning from complaints so as to improve services. In addition to the descriptive value it has in its ownright, this study provides a solid foundation forfuture research on the ways by which ombudsresolve disputes. The Report of this mapping studycan be found at:

http://ombudsresearch.org.uk/2014/10/

Developments in consumer redress designin Scotland

Following the introduction, Jim Martin (ScottishPublic Services Ombudsman) provided the firstkeynote presentation on Redress in Scotland and thefuture of Ombudsman schemes. He perceived a clearshift in thinking about Ombudsman models in theUK. The models which emerged post-Devolution inScotland and Wales embraced the concept of a one-stop-shop. In Scotland there was a move towards astandards approach. Each Ombudsman is similar butdifferent in the range of their jurisdiction andapproach, but each has been moulded by theidentified needs in the nation and their ownlegislature’s view of what is the best Ombudsmanmodel to serve the needs of their community. Theyare built on the basis of what needs to be donerather than what a traditional, ‘real’ Ombudsmanshould be doing. Their significance as change agentshas gone largely unnoticed and been giveninsufficient weight and recognition in the UK as awhole.

Now these models provide a blueprint for the future.For Scotland, the evolution will continue over thenext decade. When making decisions recently on theScottish Welfare fund and other initiatives, thegovernment has sought to compare theOmbudsman with tribunals and other routes toredress. This is likely to continue to challengeexisting concepts of the delivery of administrativejustice. The Scottish Public Services Ombudsmanadvanced his perspective that the correct viewpointis the needs and interests of the citizen and how thesystem can meet her/his aspirations, and not how tobest fit the citizen into the system.

Sheena Brown (Head of Consumer and CompetitionPolicy Unit, Scottish Government), gave the secondkeynote presentation setting out the direction ofconsumer and competition policy proposals forScotland, specifically looking at future developmentsin consumer redress, following the devolution ofconsumer protection to the Scottish Parliament.

The Scottish government identified the need for amore unified approach to consumer policy.Recommendations for the creation of a unifiedconsumer and competition body responsible for



strategy, competition regulation, advocacy, advice,education, information, and enforcement were madein Consumer Protection and Representation in anIndependent Scotland: Options, which was publishedin August 2013. This model would have beenunderpinned by a separate overarching ConsumerOmbudsman delivering Alternative DisputeResolution (ADR).

Following the ‘No’ vote in the referendum on Scottishindependence, the Scottish government submissionto the Smith Commission requested completedevolution of consumer policy. The SmithCommission recommended devolution of consumeradvocacy and advice to the Scottish Parliament, butthe Scottish government believes that thedevolution of all four pillars of consumer protection(advocacy; advice, education, and information;enforcement; and redress) is necessary to create arobust system of consumer protection. The fourthpillar, redress, is an integral part of creating acoherent approach to consumer protection inScotland. Current UK mechanisms were consideredto be disjointed and complex, so there is significantscope for a Scottish approach to redress building onthe single organization approach taken by theScottish Public Services Ombudsman (SPSO).

The Smith recommendations represent anopportunity for the Scottish government to reformthe consumer landscape. For redress, there is a desireacross Scotland for a Scottish ConsumerOmbudsman. This would give consumers a single,easily accessible point of contact for all complaints,which would be handled in a consistent, uniformway. For this to be effective, ombudsman serviceswould need to be easily accessed and understood byconsumers. In progressing this further, the Scottishgovernment will look to draw on best practicemodels including the Dutch De GeschillencommissieStichting and the Swedish National Board forConsumer Disputes (ARN).

The Scottish government will now consider furtherhow consumer redress should be delivered inScotland following the devolution of consumerprotection powers. This will be addressed in aDiscussion Paper. A Working Group, set up by theScottish government, had its inaugural meeting inJune 2015 with Citizens Advice Scotland, SPSO,

Ombudsman Services, and other key stakeholders, todevelop a comprehensive Scottish system of redress.

Professor Tom Mullen (University of Glasgow)presented the third keynote on administrativejustice. The term ‘administrative justice’ covers boththe decisions made by public bodies that affectcitizens (and, more generally, the way they treatthem) and the remedies citizens have when theywant to challenge decisions or complain about theirtreatment. The main remedies now available tocitizens are courts, tribunals, ombudsmen, andcomplaints procedures. However, it is essential tounderstand initial decision-making in order todesign effective systems for redress. For example, itmatters whether decisions are made by applyingprecise rules or by the exercise of broad discretion.Good decision-making requires that the correct viewof the relevant law is adopted, facts are correctlyestablished, rules correctly applied, and discretion isproperly exercised, all through a fair decision-makingprocess.

The remedies can be analysed according to whetherthey are independent of government, their decisionsare binding on the administration, the criteria theyuse to make decisions, the type of methods andprocedure they use, and the degree of formality.They can be evaluated according to whether theyproduce appropriate outcomes, are impartial andindependent, follow fair procedures, their speed,their cost, and their accessibility. Each of the fourmain types of redress mechanism has characteristicstrengths and weaknesses. Major changes to theremedies have taken place in recent years(rationalization of reserved tribunals) and more areplanned, including the rationalization of devolvedtribunals, reform of the Scottish civil courts, therationalization of Ombudsmen in UK/England andWales, further rationalization of complaintsprocesses, and development of the role of theScottish Public Services Ombudsman.

Unfortunately, recent adverse developments at UKlevel indicate the absence of a holistic vision ofadministrative justice, the loss of important rights ofappeal (immigration control), and the creation ofnew obstacles to use of established remedies (e.g. insocial security). Uncertainties and concerns for thefuture include (i) the possible effect of public



have an impact on the cost per complaint, and theadditional cost will have to be met by the funder.While the UK has an established reputation forproviding public funding for consumerempowerment, this may be more challenging insome of the privately funded ADR sectors. Moving to the right side of the model, Step 3, systemdesign choices addresses accessibility within thedesign activities. This includes how the complaintsystem will be advertised and how much supportand signposting will be provided. Is there scope tobe more creative in the way organizationscommunicate with consumer-citizens aboutaccessing their complaints systems?

Two further design tools were discussed in relationto the consumer focus: consumer principles andconsumer vulnerability. Consumer principles ofaccess, information, choice, redress, fairness,representation, and safety/quality can be useful fororganizations as a tool in helping to shape disputeresolution mechanisms. These principles can formpart of the policy toolkit for organizations andprovide a structured way of enabling a deeperanalysis of the consumer interest. In relation toredress, it may be reasonable to expect that effectivefeedback loops are in place to learn from complaintsand improve services for all. In relation to consumervulnerability, building on the British Standard onInclusive Service Provision (BS18477), the LegalServices Consumer Panel (LSCP) provided a usefulguide for regulators in 2014 on recognizing andresponding to consumer vulnerability. Consumersmay be vulnerable due to, for example, a physicaldisability, mental health issue, bereavement, orrelationship breakdown. Some consumers may bevulnerable because they face greater difficulties inobtaining redress. Consumers may be going throughlife-changing events such as a divorce or buying ahouse. A useful wheel diagram provides a focus onindividual risk characteristics and market features,which may be helpful to inform an analysis ofconsumer vulnerability. The LSCP highlighted recentresearch which showed that 44 per cent ofconsumers who are dissatisfied with legal services inEngland and Wales do nothing, partly because thesystem is confusing, and this compares with 27 percent in the services economy overall. Effectivelydesigned access to good information, advice,

spending cuts on the quality of initial decision-making, the resources allocated to redressmechanisms, and future provision of legal aid; and(ii) the effects of further devolution, e.g. ofresponsibility for reserved tribunals.

Consumer perspectives on access to redress

The second theme of the workshop centred onconsumer perspectives. Carol Brennan (Reader inConsumer Policy, Queen Margaret University)applied the new QMU model on consumer redressdesign to the areas of information, advice, education,support, and signposting to consider the choicesavailable to organizations as they strive to makeaccess to redress easier for more people. Examplesfrom the area of legal services illustrated some of thechallenges and useful tools for redress design. Giventhe complexity of the landscape, it can seem like amaze for complainants.

The new CDR model shown in Figure 1 and outlinedin the introduction may be helpful in analysing thedesign choices. In applying the model to theprovision of information, advice, education, support,and signposting, aspects of consumer-citizenempowerment were explored in the pre-designactivities shown on the left side of the model in Step1, research and analysis, where stakeholder researchwould be carried out to ascertain the needs andwants of service users, taking into account the legaland policy context, and using the opportunity tocheck if existing mechanisms are effective. Thisphase enables organizations to understand thecontext in which the CDR mechanism is beingdesigned.

Step 2 focuses on goal setting, in which theorganization will prioritise from competingalternative options. These goals may includeadvising on disputes and/or rights; consumer-citizeneducation; helping vulnerable consumers; easingburdens on the court system; reducing regulatoryburdens; standard raising; consumer-citizensatisfaction; business/organization satisfaction; andcost-effectiveness. An organization may want toinvest in advice to enable consumers to understandthe strengths and weaknesses of their complaints,helping to manage expectations. However, this may



support, and signposting may provide one solutionto make a positive improvement in the consumerjourney of making a complaint.

One of the issues raised in the panel discussionconcerned the need for consistency and goodpractice. In meeting consumer-citizen expectations,in the post-implementation phase of the ADRDirective, organizations may need to pay particularattention to designing systems and processes thatare consistent enough to allow expectations to bemet when approaching any ombudsman or otherADR scheme. The Ombudsman Association couldplay an influential role in setting appropriatestandards.

Lauren Bruce (Access to Justice Policy Officer,Citizens Advice Scotland) outlined the role ofCitizens Advice Scotland (CAS), which is the umbrellabody of the Citizens Advice Service in Scotland. Aswell as sixty-one member Citizens Advice Bureaux(CAB) who operate from over 250 locationsnationwide, the Citizens Advice Consumer Serviceand the Scottish pages of the UK advice websiteAdvisernet also fall within remit. Last year, theService provided advice to over 330,000 clients onover 1 million issues. In addition, the Scottish zone of

the self-help website received approximately 4.2million unique page views. In most cases, individualswill approach Citizens Advice when something hasgone wrong. Redress is therefore a large part of thework of the Service. CAS learns from that work anduses the knowledge to influence change whichbenefits consumers.

In relation to redress, administrative justice is thefacet of justice which consumers are most likely touse to solve their problems. Wording here is chosencarefully: not ‘engage with’ or ‘explore’ but use. Theprocesses and procedures of administrative justicemust be tools which consumers can meaningfullyutilize to solve their problems. This should be theprimary aim and focus of redress — not simply thatthere is a process which exists, but that the processtakes consumers easily from problem to solution. Inreality, this is often far from reality. One of the topfive enquiries to the Citizens Advice ConsumerService is ‘I have a problem with my sofa’. Anindividual trying to navigate this process has beenfailed. It is not simple. It has the potential to involvemultiple facets of the justice system with varyingcosts. It does not take that individual from theirproblem to a solution but instead presents a series ofbarriers, illustrated in Figure 2.


Figure 2. Pathways to consumer dispute resolution


process was presented as a win–win; providing‘proactive redress’ for future consumers and savingon scarce resources. The reluctance to listen andlearn is identified as a key, and highly resilient, failingin certain service environments. This may beparticularly the case where consumers’ motivationsfor seeking redress are collective as well asindividual.

The implications for the design of accessible redressfor public service users was considered. There aresome aspects that depend on an understanding ofthe ‘internal’ barriers for consumers, such as a lack ofresources, skills, and confidence. There are othersthat depend on understanding the ‘external’ barriersthat consumers face in their interactions with serviceproviders. These barriers include the nature of theavailable opportunities for redress, which leads on todiscussion of providers’ levels of competence andcommitment to the provision of meaningfulconsumer redress, and the extent to which publicservice cultures are complementary to orincompatible with its achievement.

Finally, there was a suggestion that there is often alack of congruence between the redress that publicservice providers are willing and able to provide, andthat which is sought by consumers. Where this is thecase, the task is not for service providers to simply dothe same things they are currently doing, only better.There is a need to review, with consumerinvolvement, the way to close this gap. This requiresan open and transparent discussion that is preparedto face up to the challenges that this agendapresents and find more effective ways to designconsumer redress.

The role of ombudsmen and consumer ADRin improving access to redress

In the third theme of the workshop, Caroline

Mitchell (Lead Ombudsman, Financial OmbudsmanService) said that as an informal alternative to thecourts, ombudsmen provide an important service toconsumers and citizens in ensuring there issomewhere free where they can go for help ifsomething goes wrong. The Financial OmbudsmanService in the UK is the world’s largest ombudsmanservice with 4000 employees and 300 ombudsmen.Last year the service resolved nearly half a million

Making ‘redress’ work is not an easy task. People arecomplicated and their problems are complex. Beforeconsidering the design of redress systems, it is alsoimportant to understand the journey consumerstake to get into that process. The onus is on theconsumer to:

n recognize they have a problem;

n recognize the way to solve the problem;

n choose to pursue resolution.

The task becomes daunting. But there are newdevelopments in Scotland which give hope that thebarriers faced by policymakers might be overcome.The Justice Digital Strategy is moving forward atpace and there is much to be learned from the dataof ongoing research and consumer organizationslike CAS. It is possible to understand whatconsumers need and together take a strategicapproach to administrative justice in Scotland. Theresult may be that people think that it is ‘worth it’ toseek redress and find a solution to their problems.

Richard Simmons (Director of MSc Applied SocialResearch, University of Stirling) noted access toredress as a fundamental consumer principle;nowhere more so than in public services wherecitizen-consumers have a legitimate ownership stakeas well as their user relationship. The discussion ofaccess presumes there are potential issues andbarriers to overcome in order to promote thisprinciple. This presentation rehearsed some of theseissues and barriers, before going on to examine thekind of redress that is being sought, and how someof the barriers might be considered in the light ofthese distinctions, and how this might lead to betterdesign of consumer redress.

In terms of the kind of redress being sought, adistinction was drawn between ‘material’ and ‘non-material’ redress. Material redress concerns suchissues as ‘service recovery’ and ‘financialcompensation’. These forms of redress are importantand have a role in public services, although theextent to which consumers’ perspectives vary wasdiscussed. Non-material redress concerns such issuesas ‘emotional recovery’ and ‘relational recovery’. Thedifficulties in achieving these forms of redress in thecurrent public service environment were discussed.The value of listening to ‘alert’ consumers early in the



complaints. Complaints about the whole range ofregulated financial products are covered and theservice has the power to make binding decisions,awarding up to £150,000.

The first stage in improving access to redress ismaking sure people know the organization is thereand what it does. The service has worked todemystify the word ‘ombudsman’ and explain how itcan help. The organization recognizes the need toadapt its process to suit customers rather thanexpecting them to fit in with the Service. Not allcitizens have the same needs, so a number ofdifferent channels have been developed throughwhich people can engage with the FinancialOmbudsman Service. The usual first point of contactis by phone or through social media, at which pointthe Service will then make sure complaints arehandled in the best way for consumers.

But businesses are the organization’s customers too.It is important that they know how the service works,what they have to do, and the usual approach tocommon complaints. The Financial OmbudsmanService holds conferences and seminars for smallbusinesses. Sharing insight is an important part ofthe organization’s work, since it has a unique viewacross the whole industry, and can help preventcomplaints in the future.

The Financial Ombudsman Service is encountering anumber of challenges at the moment. The problemsof Payment Protection Insurance (PPI) are wellknown, and while the number of complaints isdeclining, there are still 4000 or so new cases eachweek. New ways of working are being trialled tomake sure that the service solves as many problemsas possible as quickly as possible. The currentbusiness model has served the organization well, buttoday’s customer expects rapid responses. Lengthydelays are unacceptable in a world in which afinancial product can be bought online withinminutes.

In conclusion, the presentation considered what thefuture holds for financial services. Driverless carshave implications for motor insurance, biometricdevices could impact on underwriting, andincreasing ease of access to products will affect theservice provided.

Brian Thompson (Senior Lecturer, University ofLiverpool) delivered his presentation on PublicServices Ombudsmen and Access to Redress inAdministrative Justice – Realisable Potential? Hedefined access to redress in administrative justice aspromoting awareness of information about, andsupporting people through, the arrangements forresolving disputes with public and governmentalbodies as well as dispensing redress and proposingadvice to improve service. It was argued that anadministrative justice system approach as embodiedin the ombudsman could enhance access to redressin administrative justice, but this may be unlikely ifthe direction of travel is anti-state and austeritypolicies, and ‘cheap and cheerful’ consumer disputeresolution.

Mark McGinty (Chair, Chartered Trading StandardsInstitute) focused on consumer ADR in improvingaccess to redress. He described Alternative DisputeResolution (ADR) as a range of methodologiesdesigned to avoid the need to go to court toenforce legal rights, designed to be cheaper,quicker, and less formal. Organizations across theUK and Europe provide ADR to resolve sales andservice contractual disputes between traders andconsumers. From 9 July 2015, with theimplementation of the new EU Directive, the‘Competent Authorities’ will be identified tooversee certain trade sectors, and traders will berequired to provide consumers with informationabout an ADR organization that could assist theirefforts to secure redress. This informationrequirement will be ‘triggered’ when the tradercannot resolve a dispute they have with aconsumer using their internal processes. Where thedispute transaction falls outside the remit of theseCompetent Authorities, as delegated by theSecretary of State, the Chartered Trading StandardsInstitute (CTSI) will be the Competent Authority,with responsibilities for dealing with applications,approval of such ADR organizations, andoverseeing their activities. CTSI will also act for theSecretary of State, as the single point of contact forall the UK Competent Authorities.

The changes reflect a moving consumer landscapeand the implementation of qualitative controls onaccess, expertise, independence, impartiality,transparency, effectiveness, fairness, and legality.



disputes, except perhaps for the most complex andhigh-value cases.

CDR is now becoming an integral part of the civiljustice system. The policy behind its promotion isunderpinned by two functions: encouraging tradeand increasing access to redress. Yet the currentsectorial approach to mandatory CDR in manyMember States hampers consumer awareness, andindeed it can confuse consumers, especially so underthe new information obligations contained in theADR Directive and ODR Regulation. Accordingly, DrCortés advocated that traders are forced to complywith nationally certified CDR entities, beforeaddressing some of the main arguments againstmandatory CDR — namely, floods of complaintsdriving costs up for traders; difficulties in theenforcement of outcomes with reluctant traders; andthe parties’ restriction to the court, and hence accessto justice.

The traders’ ability to select the CDR entity could alsolead to forum shopping, and Dr Cortés outlined anumber of safeguards that be put in place tominimize this risk, including a national single ODRplatform, interoperable with the EU ODR platform.This model, already operating in some MemberStates, would ensure full coverage while providingparties with sector expertise. It is also simpler forconsumers, providing a single point of entry andallowing for the signposting of complaints (and notcomplainants) to certified CDR entities.

Lastly, it was proposed that CDR and courts shouldenable pathways allowing for synergies that deliver amore holistic and efficient resolution of disputes.When statutory interpretation is at stake a pathwaycould be used to interconnect CDR entities with thecourts and regulators. Courts may also incorporateADR/ODR processes within their procedures,allowing for informal online resolution whenpossible. It was suggested that full mandatoryCDR/ODR is on its way for the majority of consumercases.

James Walker (Chief Executive Officer, Resolver)delivered his presentation on Helping to create accessto effective and efficient redress. In order forconsumers to access redress, they must identify theright organization to approach at the right time, an

The presentation also reflected on experiences ofdispute resolution without the need for parties to goto court, and in doing so, illustrated the changingrole of Trading Standards professionals over time.

Online dispute resolution (ODR) and accessto redress

In the final theme of the workshop, Peter Taylor

(Operations and Technology Director, OmbudsmanServices) examined online dispute resolution (ODR)from different perspectives, including consumers,companies, and Ombudsman/ADR providers. Theanalysis considered how ODR and associatedtechnological advances were affecting thecomplaints lifecycle and the methods in whichconsumers seek redress. The popularity of the onlinetrader eBay has influenced the expectations thatconsumers have of the speed with which complainthandling organizations respond to requests (someconsumers are dissatisfied if they have not received aresponse within hours), and although they do stillwant to speak to a person, webchat has beenincreasingly employed as a means to meetexpectations and provide a convenient, timelyresponse for some people. Some areas of complaintwhich are high volume/low value, such as parkingtickets, can be resolved efficiently and effectivelyusing ODR.

Dr Pablo Cortés (Senior Lecturer, University ofLeicester) focused on ODR and Access to Redress forMandatory Consumer Dispute Resolution. Theimplementation of the ADR Directive represents acatalyst for the institutionalization of consumerdispute resolution (CDR) entities that meet thecriteria set out in domestic law, which includesprocessing consumer complaints online. Dr Cortésargued that, while the Directive creates anopportunity to increase the availability andawareness of quality CDR, it also poses the risk ofundermining consumer trust in the whole CDRsystem if traders refuse to participate in CDRprocesses, greater competition amongst CDR entitiesleads to forum shopping, and if the proceduralguarantees are not adequately monitored. Heargued for a legal obligation mandating all traders toadhere to a certified CDR entity, and that theseentities, and not the courts, should operate as thefirst redress option for practically all consumer



undertaking that is complicated by the fact that theconsumer support landscape is complex andassumes the consumer has access to a perfect set ofknowledge at the right time to make the rightdecisions. Rather than supporting the consumerwhen an issue cannot be resolved, instead Resolveris designed to proactively help and support theconsumer from the moment they raise their issue,ensuring they know their rights, what to do, andwhen. If an issue is not resolved, Resolver signpostsconsumers to sources of independent redress.Providing an effective case for independentassessment means more effective (and cost-effective) decisions can be delivered that are fair forthe consumer and the business.

Conclusions

The organizers have drawn the following conclusionsfrom the many views on designing consumer redresswhich were shared during the workshop. It is hopedthat these will be of value to academics,practitioners, and policymakers as the ombudsmanand ADR landscape continues to develop during theimplementation of the ADR Directive and ODRRegulation.

Designing systems to enable more consumers andcitizens to access redress presents a particularchallenge for organizations. Presentersacknowledged the complexity of the redresslandscape and recognized that, as the ADR Directiveis implemented, new developments could furthercomplicate the options available for consumers. Theimportance of focusing on the needs of theconsumer or citizen for effective redress design wasemphasized, including the provision of a range ofaccess channels. There was a desire to simplify thelandscape, the adoption of a ‘can do’ approach, andassistance to consumers to make it easier to reachthe most appropriate organization to assist withtheir complaints. Solutions may include a singlegateway for consumers. One example is the proposalto develop a Consumer Ombudsman for Scotland.Uncertainties and concerns for the future include thepossible effect of public spending cuts on theresources allocated to redress mechanisms, and theeffects of further devolution. Internal barriers forconsumers such as a lack of resources, skills, andfinance were highlighted, in addition to external

barriers including the nature of availableopportunities for redress.

This workshop provided the opportunity to learnfrom effective policy and practice, empiricalresearch, and new thinking around models whichmay facilitate a more structured approach for futuredevelopments. Models and policy toolkits may helpto shape redress systems which are more consumer-citizen focused and based on a coherent set ofprinciples, design choices, and approaches.Effectively designed access to good information,advice, support, and signposting may provide onesolution to make a positive improvement in theconsumer experience throughout the complaintprocess. Ultimately, people should think it is worththe effort to complain and seek redress.Consideration needs to be given to the congruencebetween the redress sought by consumers and thatwhich services are willing to provide.

The ADR Directive was perceived as a catalyst for theinstitutionalization of consumer dispute resolution.The Chartered Trading Standards Institute (CTSI) isoverseeing the development of CompetentAuthorities in the UK, and the process for approvalhas commenced. It was argued that it should bemandatory for all traders to be members of a certifiedADR entity. Innovative technological solutions areexpected to play an increasingly important role ineffective consumer redress design in future.

In addition to the points noted above, a number ofareas with implications for policy were identified:

n Future institutional design should be informed by

principle and not left to ‘the market’, technocratic

solutions, or incremental tinkering.

n Values and vision should be scrutinized and a

measure of consensus achieved (i.e. the aim

should be a shared vision of civil, administrative,

and social justice).

n Environmental analysis is an essential precursor

to design.

n An holistic, not just single institution-specific,

approach is needed.



n The title ‘ombudsman’ should itself be open to

critique and, if necessary, refinement.

n Ombuds schemes in the UK need to have a more

significant impact as agents of change.

n Empirical research should be employed to

identify consumer needs, as well as wants.

n All ADR bodies should share the insights from

complaints with organizations/sectors.

n The distinctive characteristic of the ‘ombuds’

institution requires further elaboration and

dissemination.




The Foundation The mission of the Foundation is to study, reflect on, andpromote an understanding of the role that law plays insociety. This is achieved by identifying and analysing issues ofcontemporary interest and importance. In doing so, it drawson the work of scholars and researchers, and aims to make itswork easily accessible to practitioners and professionals,whether in government, business, or the law.

Carol Brennan is a Reader in Consumer Policy and Director ofthe Consumer Insight Centre at Queen Margaret University.Her research interests are mainly in the field of consumerpolicy with particular reference to consumer empowerment,complaint handling, and customer service. Carol is developingthe Consumer Insight Centre at QMU as a centre of excellencefor CPD, research, knowledge exchange, and consultancy inombudsman practice, complaint handling, consumer/citizendispute resolution, and consumer policy.

Naomi Creutzfeldt is an ESRC Research Fellow at theUniversity of Oxford. Naomi is part of the European CivilJustice Systems team at the Centre for Socio-Legal Studies atthe University of Oxford, where she works on her ESRC project‘trusting the middle-man: impact and legitimacy of ombudsmen’(http://www.law.ox.ac.uk/projects/Ombudsmen).

Chris Gill is a Senior Lecturer in Administrative Justice atQueen Margaret University. Prior to joining the university, heworked for the office of the Scottish Public ServicesOmbudsman (SPSO) in a variety of roles includinginvestigation, quality assurance, case reviews, and training. Hiscurrent research focuses on the influence of administrativejustice institutions; the roles, functions, and processes ofombudsman schemes; and the use of mediation in highconflict settings.

Carolyn Hirst is a Lecturer in Ombudsman and ComplaintHandling Practice at Queen Margaret University, where shedevelops and delivers courses for ombudsman and complainthandling schemes and participates in research activities. Sheis a former Deputy Scottish Public Services Ombudsman(2002–2007) and Interim Principal Ombudsman atOmbudsman Services (2014–2015).

www.fljs.org


Wolfson College

Linton Road

Oxford OX2 6UD

T . +44 (0)1865 284433

F . +44 (0)1865 284434

E . [email protected]

W . www.fljs.org

For further information please visitour website at www.fljs.org or contact us at:


Documents

Designing Consumer Redress · the implications of the new directive and consider the design of the new system of consumer redress. The workshop brought together key players in the