Contribution
My Lords, I will speak also to the Digital Markets, Competition and Consumers Act 2024 (Alternative Dispute Resolution) (Consequential Amendments) Regulations 2026.
These instruments relate to the alternative dispute resolution, or ADR, chapter in the Digital Markets, Competition and Consumers Act 2024—the Act—which received Royal Assent in May 2024. The Act repeals the Alternative Dispute Resolution for Consumer Disputes (Competent Authorities and Information) Regulations 2015 and replaces it with a strengthened framework in Chapter 4 of Part 4.
In most instances, disputes between consumers and businesses can be resolved without the need for any formal action. But when consumers and the trader cannot come to a resolution, ADR is an effective means to secure redress for the consumer without resorting to litigation. All ADR providers are independent third parties offering dispute resolution that is usually less confrontational to the consumers and businesses involved. But not all ADR providers have the same accreditations and standards, so consumers can experience inconsistent quality of services.
For ADR to be effective, it must be of high quality and meet certain standards. The Act aims to strengthen the quality of ADR available to consumers by: introducing a mandatory accreditation framework for ADR providers for consumer contract disputes; providing a robust set of accreditation criteria to ascertain ADR providers’ expertise, transparency, independence and accessibility prior to their being accredited; and providing ongoing monitoring and review to ensure that accredited ADR providers continue to meet those high standards. The Act includes the power to revoke or suspend accreditation, limit accreditation, or impose further conditions if a provider is found to be non-compliant.
The intention of mandating accreditation of ADR providers is to strengthen the ADR framework in the UK. The Government believe that these changes will help deliver a trustworthy, timely and fair service that consumers and businesses can trust to resolve consumer disputes, with improved oversight to monitor standards and ensure consistency.
Section 307 of the Act allows certain ADR functions to be conferred on another person. The regulations before the Committee confer on the Chartered Trading Standards Institute—CTSI—responsibility for managing the provision of ADR in consumer contract disputes in non-regulated sectors, including the functions of accreditation, monitoring and reporting on the operation and effectiveness of ADR provision.
This includes upholding the standards of ADR providers in the UK through powers to compel or sanction ADR providers to improve performance in the event that they do not meet their obligations. It also requires the CTSI to prepare quarterly and annual reports for the Secretary of State for the Department for Business and Trade.
The reports will contain information and metrics on the performance of the CTSI, ADR providers, and the ADR landscape in the UK to ensure accountability and transparency and enable the Secretary of State to maintain oversight of the operation of the system of accreditation and the provision and quality of ADR carried out in the UK. The decision to confer these functions on the CTSI has been taken in recognition of the CTSI’s authority, track record and expertise in this area, including its long-standing and constructive relationships with ADR providers.
Separately, the Digital Markets, Competition and Consumers Act 2024 (Alternative Dispute Resolution) (Consequential Amendments) Regulations 2026 make amendments to primary and secondary legislation in consequence of Chapter 4, Part 4 of the Act coming into force, and the revocation of the Alternative Dispute Resolution for Consumer Disputes (Competent Authorities and Information) Regulations 2015.
The consequential amendments deal with the redundant references to the 2015 alternative dispute resolution regulations and, in some cases, replace them with a reference to Chapter 4 of Part 4 of the Act. These amendments do not materially change the policy or affect the underlying law; they simply keep the statute book up to date in the usual way.
As I hope is clear from these remarks, the intention of both sets of regulations is to support and strengthen the ADR framework in the UK. They will put it on a stronger footing that provides a consistent, trustworthy, timely and fair service that consumers and businesses can trust to resolve disputes amicably, with improved oversight to monitor the service standards. I invite noble Lords to support the passage of these instruments.