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Joint inquiry by APPGs will ‘bridge the gap’ for financial disputes

Tuesday 31 January 2017

The All Party Parliamentary Groups (APPG) on Fair Business Banking (FBB) and Alternative Dispute Resolution (ADR) have announced a joint 3-stage inquiry into the use of ADR as a long-term solution for businesses involved in financial disputes.

In a statement released today, the APPGs said that the inquiry – ‘Bridging the Gap: a level playing field for financial disputes’ – was launched following the Backbench Business Debate in the House of Commons on 15 December 2016. The debate highlighted the need to ‘create a level playing field for financial disputes between businesses and banks’.

The Chartered Institute of Arbitrators, which provides the secretariat to the APPG on ADR, will be supporting this research and its members will be sharing their insight into ADR alongside businesses and financial experts throughout the inquiry.

In response to the statement, John Howell OBE MP, Chair of APPG ADR commented:

All too often businesses, including small and medium-sized enterprises, feel they are left with no option except prohibitively expensive appearances in court. The work of the APPG on ADR has identified that in many sectors alternative dispute resolution mechanisms are incorporated into contracts as a matter of course. This inquiry will shine a light on the role ADR has to play as a faster, efficient option for businesses to level the playing field for financial disputes.

George Kerevan MP, Chair APPG FBB said:

For too long there has been an accepted view that, between the Financial Ombudsman and the courts, businesses have adequate access to dispute resolution, not to say justice. This is, quite simply, not the case.  Courts are prohibitively expensive and time consuming, and to expect even a moderate business to take on the might of a multinational financial institution as an equal is nonsensical.  Contractual transparency, mediation, adjudication and tribunals are all established mechanisms used by industries and sectors such as construction and employment.  Yet they are completely absent in the unregulated commercial financial landscape. We firmly believe that, had such a system been in place, scandals such as the Interest Rate Hedging mis-selling and RBS’ Global Restructuring Group would have been discovered much earlier or prevented in the first place.  This Inquiry will produce a set of solid proposals upon which we can address the current imbalance and build a solid foundation for effective dispute resolution.

Anthony Abrahams, Director General at the Chartered Institute of Arbitrators (CIArb), said:

This is a crucial initiative aimed at providing a platform for disputes that are not large enough to make court a cost-effective option, but which fall outside the remit of the Financial Ombudsman Service. This gap leaves many businesses without a long-term solution for their disputes, and ADR aims to help businesses resolve conflict without damaging commercial relationships.

For further information, please contact:
Olivia Staines
Interim Head of Marketing & Communications
T: 020 7421 7843