- 43% of contractors spend up to five hours a month dealing with customer disputes
- Over a third (36%) have faced legal action from dissatisfied customers
New research by Dispute Assist, the UK’s leading dispute resolution provider, has revealed the impact of customer disputes on the working hours and financial success of the nation’s home improvement contractors.
According to the research, 43% of contractors are spending between two and five hours per month dealing with disputes, a huge drain on their time and resources.
Shockingly, nearly a fifth (17%) of contractors admit to spending between six and ten hours a month liaising with customers over disagreements, and one in 10 (11%) spend more than ten hours a month.
Only 7% of contractors said that they spend no time at all dealing with disputes, suggesting that they are a regular feature in the professional lives of most home improvement contractors.
Assuming a contractor’s hourly rate stands at £35, they lose the equivalent of £70 upwards to £350 on handling disputes alone, meaning these disputes have the potential to significantly setback a home improvement business financially.
Costs rack up even more when a customer dispute is escalated to the courts, and it is concerning that more than a third (36%) of contractors revealed they have had an unhappy customer make a court claim against them.
Despite the financial and reputational damage a trip to court can create, uptake of alternative dispute resolution (ADR) services to prevent disputes from reaching this stage has been surprisingly slow amongst contractors. Two-fifths (42%) of those surveyed are not part of an ADR scheme, and 28% don’t actually know what ADR is, even though it has been a legal requirement since 2015 for traders to signpost customers to an ADR provider if a complaint cannot be resolved.
ADR includes softer methods like mediation and conciliation, which helps a customer and contractor to resolve a dispute by finding a fair resolution away from court. Expert determination, which sees an expert within the field of the dispute provide a legally binding ruling without involving either party in the decision-making process, can often resolve cases within a matter of days, rather than weeks.
Ciarán Harkin, managing director of Dispute Assist, said: “There is currently a lot of turbulence within the home improvement sector. As the cost-of-living crisis continues, many customers are rejecting the increased costs that contractors have passed to them. Unfortunately, given the current constraints within the supply chain, these cost increases can arise unexpectedly, despite contractors’ best intentions.
“As a result, many within the sector are likely to find themselves facing a higher number of customer disputes. However, our data shows a concerning trend that the majority of home improvement workers are spending vital working hours attempting to settle disputes themselves, whilst possibly causing irreparable damage to their reputation.
“Therefore, it is important that contractors begin to explore the range of dispute resolution options available to them. ADR offers easily accessible, less time-consuming, and cheaper solutions to disagreements, without requiring contractors or their customers to ever step foot in a courtroom.
“With 80% of those that do know what ADR is having chosen to join a scheme, it is clear to see that more education is required to teach a greater number of contractors how to protect their finances and reputation in an already challenging economic climate.”
You can read the full findings of Dispute Assist’s latest report here.
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