Posted by Neil Rose, Editor, Legal Futures
Who would have thought that something as inoffensive as ADR could cause such a rumpus? But the impact on the profession of the EU Directive on Consumer ADR has done just that.
The directive aims to ensure that all consumers in the EU have access to an ADR scheme to seek redress for problems with goods and services, and set common standards for ADR providers. Fair enough, one might say.
It means that, from today, every lawyer is obliged to point clients in the direction of an ADR provider should both of them wish to resolve a complaint that way, although the client still has the option of referring their complaint to the Legal Ombudsman (LeO).
The plan for some time was that LeO would be certified as an approved ADR body for these purposes, meaning nothing much would change for anyone, except that its scheme rules would have to change to bring them into line with the directive, such as increasing the time limit for making a complaint from six months to a year.
But last month, LeO’s oversight board, the Office for Legal Complaints (LeO), unexpectedly withdrew its application for approval and instead set about launching a consultation on the changes it proposes to make.
The problem is that lawyers need an approved ADR provider today. The Law Society’s advice points solicitors to the Chartered Trading Standards Institute, which has approved a number of organisations, while the Bar Standards Board has recommended three particular providers to barristers.
The nonsense at the heart of these new requirements is that, as a lawyer, you have to signpost clients to an ADR provider, but you don’t have to agree to use it. Were there such a body as the Association of UKIP Lawyers, I imagine they’d be waving this directive around as exhibit number one.
This is why it would have been neater all round if LeO was already in place. So, why isn’t it?
It is not as if this issue has sneaked up on the OLC, which has been talking about the directive for ages and in the summer of 2013 even outlined ambitions to offer itself as the ADR provider for other sectors.
The directive was actually meant to have come into force in July, but was put back after the government failed to publish the final regulations implementing it until June. As I understand it, while in the early days it was expected that bodies like LeO would be passported into the new scheme, by the time the regulations were published, they had to apply for approval.
The OLC is able to alter its scheme rules unilaterally when it is effectively mandatory because of a change in the law of, say, discrimination, but otherwise it is required to consult. LeO was not obliged to become an ADR provider, and so the OLC board took the view that it had not consulted properly.
Hence the consultation that is currently live. There will be a final decision in December, which all things being equal will be followed by an application to the Legal Services Board for approval as an ADR provider. Assuming this is forthcoming, then the profession will then be obliged to name LeO as its ADR provider. (Actually, subsequent to publishing this blog, I’ve been told this might not be right – lawyers may still be able to nominate a different ADR provider.)
Speaking to me yesterday, Steve Green, chairman of the OLC board, said all this “ambiguity” would go on for only a “relatively short period of time”, but acknowledged that it was not ideal.
But, he went on, “even if there is a moment of embarrassment, it is more important to do it properly”.
It is not clear to me how long the direction of travel became clear ahead of formal publication of the regulations, and whether swifter action by the OLC could have avoided what is now a messy and confusing situation that is unhelpful to lawyer and client alike.
But there’s not much anyone can do about it now, and indeed there may be those who would like to have an alternative to LeO.
For everyone else, it might be best simply to tell clients, as you signpost them to your ADR provider of choice, that you don’t agree to use them (see the Law Society’s guidance for suggested wording to this effect) and that the client should instead go to LeO.
Daft, perhaps, but this one is out of lawyers’ hands.