Saturday 23 September 2017

Smart Consumer: Sailing in choppy waters? Then it's good to talk

Tina Leonard

Bernard from Cork purchased a sports boat from a UK trader for £13,400 in 2006. After the first outing, water was coming on board and an extensive report was carried out which found the boat to be unseaworthy.

The company refused an initial request for a replacement part and then a request to replace the boat.

Bernard turned to the European Consumer Centre (ECC) Ireland whose intervention with the UK trader couldn't bring about a resolution, so they recommended mediation via the British Marine Federation Dispute Resolution Scheme. The cost would have been £375 per party plus a further £125 per hour for any additional work. The company would not participate.

So Bernard began legal proceedings against the company, and the court recommended they go to arbitration but the company still refused.

In the end, last November the judge awarded Bernard £19,000 plus additional compensation of £1,520 and costs of £150,000, later reduced to £102,000.

So the company had to pay more than £120,000 for something that could have cost them less than £20,000, and it's taken years.

But Bernard is not happy either. The company has paid some of the award and was to have paid the remaining amount (approximately £80,000) by last Wednesday. They didn't and Bernard is angry.

How much easier using mediation could have been.

This cautionary tale throws up a big issue about resolving consumer complaints.

If you have a valid complaint that the business won't resolve, you can take a small claims action. But the threshold for claims there is €2,000. Where can you turn if the faulty product you bought is worth more that that?

Mediation and arbitration could be alternative options. These processes can save time and money and you could find an arbitrator or mediator that is an expert in your complaint area; someone who has the expertise to understand your case better than an average judge.

In fact more and more when it comes to family law, business disputes or those involving neighbours, the courts are directing people towards these methods.

But there doesn't appear to be a level playing field when it comes to resolving consumer disputes.

You may be in luck if the area your complaint relates to is covered by an industry disputes scheme, such as car rental, car purchase, tour operators, architect or landlord disputes among others. And if you have a financial dispute you can turn to the Financial Ombudsman. But there isn't a scheme for every sector.

In the coming weeks both the National Consumer Agency (NCA) and the ECC will publish reports on this topic.

The ECC's report will conclude that there is a poor level of access to alternate means of resolving disputes and that this under-developed resource has "a negative impact on consumers".

The NCA's report will show a poor level of knowledge of these types of procedures among businesses and consumers alike.

Larry Fenelon, solicitor and public relations officer of the Chartered Institute of Arbitrators, admits that "there is room for more consumer-related arbitration schemes". However, he says that options do exist.

"If the small claims procedure isn't a runner and there is no relevant industry scheme, then you could find a 'dispute resolver' who will take on the complaint."

The Institute will launch a new website in the next couple of weeks that will contain a database of such experts -- arbitrators and mediators -- to facilitate that.

Industry-based schemes are often free, but hiring an independent arbitrator would cost around €300, with the possibility of further charges.

"Consumers might shy away from costs associated with independent arbitration," says Consumer Association CEO Dermott Jewell and committee member of the Institute of Arbitrators, "but it's worth considering.

"Ask what you are fighting for, and take into account that if you're successful you may be awarded costs."

But even if you do decide to find an arbitrator or mediator to take on your case, the path is not always clear.

For example, in five out of 23 cases that the ECC sent to an out of court process last year, the trader wouldn't participate. Which is exactly what happened to Brendan, and is why he ended up in an expensive court process.

"In the end it comes down to having choice and options," Jewell believes, with the consumer being able to decide which option suits them best. Not just one route for a consumer dispute but "a full tool kit" as Fenelon puts it.

Irish Independent

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