Resolve client disputes with ADR instead of the courts

Most disputes with customers can be resolved by the parties reaching a solution among themselves, but when there is no easy answer, the last thing an installation company wants is to end up in a costly and drawn out court battle. This is when alternative dispute resolution can come into play, as Ciarán Harkin from resolution services provider Dispute Assist, explains.  

Plumbing and heating engineers spend years building up their businesses and earning a good reputation in the industry. Yet despite their best efforts, disputes with customers are commonplace and they can be sparked by a range of issues. If not dealt with effectively, customer disputes can damage reputations and result in lengthy court cases, often at significant cost in both time and money.

No business wants this kind of distraction and for small businesses these unexpected costs can mean the difference between survival and a fatal decline in trading ability.

Our data have found that heating and ventilation was the worst-performing sector when it came to cases involving contractual issues. 36% of cases received were in relation to this issue, and just over half of the contractual issues were related to servicing and maintenance.

Notably, heating and ventilation was the third worst-performing sector when it came to product issues at 16%, and it was the worst-performing sector for workmanship making up 45% of all workmanship-related cases. These disputes have huge implications for heating and ventilation businesses in terms of time and money, with repairs being required in 77% of cases.

Avoid the courts
While disputes occur across the home improvement sector, this data suggests disputes are a prominent issue for heating engineers. So how can businesses operating in this space protect themselves when disputes arise?

Some may think that going to court is the only option to pursue a dispute with a customer, but there are a bank of alternative dispute resolution (ADR) methods which are equally effective. In fact, ADR is frequently quicker, cheaper and less stressful than pursuing a traditional litigation route, but many businesses and consumers are unaware of what ADR even is.

Methods such as mediation and conciliation both centre around a facilitated conversation with the aim of getting both parties to reach a mutual agreement between themselves. With the latter, a trained conciliator will ask questions to help guide the conversation. However, there are also more formal methods like arbitration and expert determination which are legally binding and involve an expert passing a ruling.

Asking the experts
Expert determination is very similar to arbitration, with two crucial differences. The expert ruling in the case will not provide case notes to either party once a decision has been made, and this is in the interest of saving time. Another key difference is the expert will also be exactly that – an expert in their field. Because the expert is well-acquainted with home improvement disputes, they are well-placed to make the ruling as they understand the intricacies of individual cases.

Rules for ADR
While traders hope to handle any disputes with a customer quickly and effectively though internal complaint handling, this is not always possible. And under the Alternative Dispute Resolution for Consumer Disputes Regulations 2015, home improvement businesses are required to inform and signpost consumers to an ADR provider in the case that they cannot resolve a dispute among themselves.

Despite this requirement, swathes remain in the dark about what ADR is and how it can help both businesses and consumers. Dispute Assist’s report into the scale of home improvement disputes in the UK found that 28% of installers don’t know what ADR is. The study also found there is a lack of ADR awareness among the public, with 67% of homeowners unfamiliar with what ADR is and how it can help them settle issues with installers.

The government has recognised the value of ADR amid sky-high court waiting times in recent years. Under current plans, free mediation will be incorporated in civil disputes valued up to £10,000. This has become necessary as court wait times of up to a year have become commonplace, and mediation is often effective at resolving disputes.

But away from compliance, home improvement businesses should be embracing ADR anyway for its many other benefits. The ADR process can ensure confidentiality, so a customer’s dispute with a business does not get resolved in public as it would if taken to the courts. This can preserve business reputation and ensure future business remains unaffected by the dispute.

Peace of mind
Setting up an ADR provider in advance also gives peace of mind in return for a fair fee. Having this in place means heating and plumbing engineers can get on with their jobs with the knowledge that any future disputes will be handled by experts. Knowing a fair resolution will be agreed if communications break down can also give customers peace of mind that a business takes customer service seriously. Advertising their involvement with an ADR provider may even help the business win new customers in the future.

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