Nearly half of contractors are not part of an ADR scheme set to become compulsory next year

Nearly half of contractors are not part of an ADR scheme set to become compulsory next year

Two-fifths (42%) of UK contractors are not part of an alternative dispute resolution (ADR) scheme despite the fact that it could become mandatory in 2024, reveals new research

Commissioned by Dispute Assist, the UK’s leading dispute resolution provider, the survey of 200 home improvement contractors found that many are not utilising dispute resolution services even though more than a third (36%) have previously had an unhappy customer make a court claim against them. 

This is partly due to the fact that almost three in ten (28%) of contractors do not know what ADR is. A concerning finding considering that since 2015, it’s been a legal requirement for traders to signpost consumers to an approved ADR provider when they are unable to resolve a complaint. 

ADR is an effective route to resolving disputes in the home improvement sector. It includes methods such as mediation, conciliation and expert determination which help to avoid lengthy and expensive legal proceedings, enabling both parties to move on in a mutually beneficial manner. 

Encouragingly, 38% of those not currently part of a scheme said that they would be interested in signing up, suggesting that with a greater level of education on ADR, there is an appetite amongst contractors to get on board.  

Of the tradespeople who were aware of ADR, 80% are part of a scheme, indicating a high level of awareness within this group of the benefits it can bring. Nearly half (46%) of contractors who are part of a scheme are in one via a trade body or association meaning that these organisations can play a key role in raising awareness of dispute resolution amongst members and providing access to these services. 

For those who are not currently part of a scheme, the most widely cited reasons for this were that they are too expensive (40%) and that contractors are unsure of how to choose a scheme (33%). Despite 43% spending between two and five hours a month dealing with complaints, a third felt that there isn’t enough of a need to be part of a scheme. 

Commenting on the findings, Ciarán Harkin, managing director of Dispute Assist, said: “With consumer disputes becoming more frequent as the number of home improvement projects increases, contractors who are not part of an ADR scheme are leaving themselves vulnerable to legal action and reputational damage, even if they’re not at fault. 

“It’s clear that there is a need for greater education and awareness around the ADR process to provide contractors with the means to make an informed decision about whether to join a scheme. With mandatory ADR on the horizon, home improvement contractors must be clued up on what ADR is, how it works and the benefits that it brings. 

“When it comes to the reasons why contractors are not part of a scheme, it’s interesting to note that a third feel there isn’t a need when a high proportion of home improvement tradespeople are facing customer disputes each year.  

“Where cost is a barrier, contractors should investigate different providers and look for a scheme which suits their individual budget. Beyond this, for those struggling to choose a scheme, other factors such as the range of services offered, the speed of resolution and the independence and reputation of the scheme should be considered.” 

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BDC 311 : Dec 2023