Ombudsman update: ADR Directive Consultation

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Ombudsman update: ADR Directive Consultation

Published On: 15 February 2016

As firms of solicitors will, by now, be aware, from 1 October 2015 they have been obliged to signpost consumers to an "ADR entity" which can handle complaints. The Chartered Trading Standards Institute publishes a list of approved providers who can handle such matters having been authorised to do so in accordance with the EU's ADR Directive. They are called "ADR entities".

The Legal Ombudsman is not an ADR entity, meaning that law firms must direct consumers to both the Ombudsman, in accordance with their obligations under the Legal Services Act 2007 and, under the Directive, to one of the approved ADR entities. At the end of last year, the Ombudsman began a consultation on becoming an ADR entity. This meant that it would have to comply with the EU Directive in its entirety. The main consequence of this would be the removal of any time limits imposed on consumers to bring their complaint.

Solicitors and their insurers opposed the planned changes. On a practical level, it was not clear how the Ombudsman would be able to decide that it had sufficient evidence to deal with a complaint. Solicitors were concerned about document retention and how long they would be required to keep their clients' files? Solicitors also feared the potential impact on professional indemnity insurance premiums.

Much to the relief of the profession, however, the Ombudsman recently announced that it abandoned its plans to become an ADR entity.