Consumer Rights Act 2015 and Consumer Ombudsman Scheme

Debate between Yvonne Fovargue and Kelly Tolhurst

Tuesday 11th February 2020 Westminster Hall

[Kelly Tolhurst]

I am happy to meet the hon. Lady. Without knowing the specifics or the details, it is difficult to comment, but she mentioned contracts.

If parties cannot reach an agreement, alternative dispute resolution can also involve a final arbitration of the case that the business accepts as binding. Alternative dispute resolution has benefits for both parties, but I am concerned that tens of thousands of consumers still go to court to resolve disputes with business. I am also unhappy that many do so because the business refuses to participate in a cheaper, quicker and less adversarial alternative dispute resolution process. I want to make it easier and quicker for consumers to obtain redress across all sectors of the economy when things go wrong.

The Government consulted on the issue in the Green Paper “Modernising consumer markets” and launched a review of the consumer redress system. The review addresses in particular how Government can improve business take-up of the alternative dispute resolution, increase consumer awareness and raise quality standards. Consumers have a right to take a dispute to ADR in the finance, energy, telecoms, estate agent and legal services sectors. In other sectors, there is no mandatory requirement to use ADR, although it is available for any dispute should the business decide it wants to use it.

[Yvonne Fovargue]

The Minister has mentioned a number of areas where there are ombudsmen, but the system is extremely confusing. Is it not time that the Minister committed to a complete overhaul of the ombudsman system to bring them all into line, to give them proper teeth and to make them mandatory, so that they can enforce their judgments?

[Kelly Tolhurst]

I thank the hon. Lady for her intervention and note her particular interest in the area as chair of the all-party parliamentary group. As I will come on to say, we are committed to making the process easier for consumers to get redress. I hope that the response to the Green Paper, and the Command Paper that we expect to publish later in the spring, will give her some confidence in that area.

ADR is not mandatory for the furniture and home furnishings sector, where the furniture ombudsman provides dispute resolution services. The furniture ombudsman is a highly regarded service, but it can only offer its services when businesses join the scheme. I understand that in the case highlighted by the hon. Member for Linlithgow and East Falkirk, the furniture retailer in question had not joined the furniture ombudsman. That is why it was unable to help his constituent, Ms Johnston, leaving the courts as her only route to redress at the cost of much distress to her.