The two most common types of ADR are mediation and arbitration.
Mediation isn’t legally binding, but arbitration is.
You can get the help of an ADR scheme only after you’ve tried to resolve things amicably with the company you’re in dispute with.
This means you should have reached a stalemate with the company even after going through its customer services and internal complaints procedure.
If you’ve already tried to resolve things and are getting nowhere, that’s where ADR schemes can step in to help.
While participation in ADR schemes isn’t mandatory for companies, almost all businesses that sell directly to consumers are required to point you to a certified ADR scheme when they can’t resolve a dispute in-house.
They must also tell you whether or not they are willing to use that scheme. You should check if there are any costs associated. If there are, these tend to be lower than in the courts.
ADR schemes can be used by UK consumers to settle disputes within the UK, and can also be used for cross-border disputes.
At the moment, UK-based ADR organisations are required to act in cross-border disputes and there is an online dispute resolution (ODR) platform run by the European Commission for Member States, which UK citizens can use.
It helps UK consumers and other consumers across Europe to get greater access to redress in the case something goes wrong with goods or services bought in other Member States.
The ODR platform can also be used without having to start legal action in the courts.
In the UK, the financial services, energy, telecoms and aviation sectors already have large and well-established ADR schemes.
Outside these regulated sectors, there are also voluntary ADR schemes which many businesses are members of.