The Gambling Commission has published new ADR framework standards and guidance (32-page / 302KB PDF) that will apply from 31 October. Those standards build on existing requirements ADR providers are obliged to meet under the Alternative Dispute Resolution for Consumer Disputes (Competent Authorities and Information) Regulations 2015 (ADR Regulations).
Gambling operators in Britain are obliged, under the Commission's licence conditions and codes of practice (LCCP), to have arrangements in place for customers to refer any dispute to an ADR provider, if not resolved by the business, to ensure that ADR is free of charge to the consumer and provide certain information to consumers about how to access that ADR provider.
The ADR Regulations apply to disputes between consumers and businesses concerning contractual obligations in sales or services contracts, both online and offline. The Gambling Commission has previously issued guidance to clarify when gambling related complaints can be said to constitute disputes that may be taken to an ADR provider.
Audrey Ferrie of Pinsent Masons, the law firm behind Out-Law.com, who specialises in gambling regulation and licensing, said the framework of additional standards outlined by the Commission is "pretty onerous" and warned that failure to comply could lead to the provider being removed from the regulator's approved list.
She said the Commission's expectations on information sharing by ADR providers, enshrined in the new standards, were of particular note.
"Because of the nature of dispute resolution work, ADR providers are likely to obtain information that would be useful to other stakeholders – in particular, to us as the regulator," the Commission said in its new standards and guidance document. "We expect providers to share relevant information with interested stakeholders, where it is appropriate to do so."
"ADR providers may receive disputes that involve both a regulatory issue and a transactional issue, or in some cases, a regulatory issue only. We are considering how we may best support consumers in matters that do not have a transactional or contractual element to the complaint. We will work further with ADR providers to consider how consumers can be helped to refer such matters to us," it said.
Ferrie also said that the new general principles that ADR providers will have to consider when deciding whether to award compensation to consumers were also noteworthy.
Where ADR providers consider that a gambling business’s actions have caused the consumer considerable distress or inconvenience, they can award consumers compensation.
According to the Commission's new ADR framework standards and guidance, ADR providers will be obliged to consider a number of general principles when considering whether to award compensation to consumers.
The regulator said that in awarding compensation, an ADR provider would be "recognising the emotional or practical impact on the consumer, rather than punishing the business".
The providers may assess whether a dispute has had "a considerable emotional or other impact on the consumer beyond a financial impact", including where they have experienced "significant distress, including stress or physical or mental suffering; inconvenience, including where a consumer has had to expend considerable effort or time because of a business’s mistake", or even damage to their reputation, the Commission said.
The regulator clarified, though, that in the majority of cases ADR providers "will not award compensation, recognising that any dispute is likely to cause a measure of inconvenience or upset".
According to the principles set by the Commission, ADR providers would not be bound by previous awards when determining the level of compensation to award in a new case.
"Providers should consider whether compensation is warranted where the impact of the business’s actions have had a considerable effect on a particular consumer," the Commission's new standards said. "Providers should also recognise that all consumers are different, and what is a significant impact for one person may not be for another. Providers should consider compensation awards at their discretion, taking into account all the circumstances of the case."
"This means that in similar cases, providers may award different amounts of compensation – or award compensation for one case but not another – depending on the overall impact on the consumer. We expect providers to apply a consistent approach to determining the amount of any compensation awards, although the outcome of each case may be different," it said.
Christopher Rees-Gay of Pinsent Masons said that the new standards serve to reiterate the Gambling Commission's drive to "protect the consumer". The regulator finalised further reforms in the summer that also take effect from 31 October which could see gambling providers lose the right to operate if they fail to comply with UK advertising rules, privacy regulations or consumer protection law.