The UKGC’s New Standards for ADR Providers

Have you ever wondered what happens when a casino player has a complaint about a service received from a casino? The answer is that alternative dispute resolution (ADR) providers get involved if the casino and the consumer aren’t able to resolve the dispute among themselves. Similar to legislation that seeks to protect consumers, on 1 October 2018, the Gambling Commission of the UK published new standards which improve how complaints are handled by ADR providers in the gambling industry. These standards come into effect on 31 October 2018. After the 31 October deadline, the UKGC will begin to assess ADR providers against the new standards.
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Ian Angus, Programme Director for Consumer Protection and Empowerment said: “The standards published …. seek to simplify existing Gambling Commission complaints processes and ensure all consumer and gambling complaints in the UK are handled in a fair, timely, transparent and effective manner. Improved standards will also help cultivate consumer trust and confidence in the industry. The standards will come into effect from 31 October, alongside further changes that provide stronger protection for consumers and ensure they are treated fairly.”

In this blog post, we’ll take a deeper look at how ADR providers will function in terms of the new rules by looking at each of the seven chapters independently.

1. Gambling Commission Complaints and the Role of UKGC

The introductory chapter of the new ADR regulations starts off by talking about the UK Gambling Commission (UKGC) and ADR in general. It provides an overview of the legislation that establishes this body. In particular, the UK Gambling Commission was established by the Gambling Act of 2005. It also mentions that it regulates the National Lottery under the National Lottery Act of 1993. The Alternative Dispute Resolution for Consumer Disputes (Competent Authorities and Information) Regulations 2015 (the ADR Regulations) established the UKGC as a competent authority for the gambling sector.

This means the UKGC approves ADR providers that wish to offer services to gambling consumers. Its role as competent authority includes making sure that ADR providers continue to meet the requirements of the ADR Regulations, alongside its role as gambling regulator to make sure that gambling is fair and open. The received gambling complaints in UK are soon or later checked by the commission, and therefore, it is responsible for the entire chain of processes in the industry. This document is aimed at ADR providers, consumers as well as online casino operators. The purpose of the document, as stated in the new Regulations is improving ADR for consumers after studies undertaken in 2017 indicated that there was a need for improvement in this area.

The objectives in implementing these additional standards are to: “streamline and simplify ADR procedures in the gambling industry, making them easier for consumers to access and understand; ensure that ADR in the gambling sector continues to comply with the requirements of the ADR regulations, but also meets the needs of consumers within this specific sector; and ensure that gambling businesses only use ADR providers that comply with these requirements, and promoting consistency of approach for both consumers and businesses.”

2. Background: ADR Providers and Their Codes of Practice

Chapter two, titled ‘Background’, focuses on the definition of ADR which is seen as a way that resolves disputes between consumers and gambling operators without going to court. This can make it easier for consumers to get help to resolve a dispute they have with a business. It also helps to reduce costs for both parties to a dispute and can reduce the length of time it takes for a dispute to be resolved. There are two methods of ADR being mediation and adjudication.

The next section deals with the rules governing the ADR industry, where it is based on two pieces of regulations/legislation. These are the ADR regulations together with their amendments, and the Licence Conditions and Codes of Practice (LCCP).

The LCCP includes social responsibility codes of practice that require for gambling business to:

  • Deal with gambling complaints in UK within eight weeks of receiving them
  • Have arrangements in place for customers to refer any dispute to an ADR provider, if not resolved by the business
  • Ensure that ADR is free of charge to the consumer
  • Provide certain information to consumers about how to access that ADR provider
  • Take account of learning or guidance the UKGC publishes about working with and submitting information to the ADR provider

The next section of this chapter deals with what gambling complaints in UK can be taken to ADR. The ADR regulations require only certain types of complaints to be taken to ADR. These are referred to as ‘disputes’. The European ADR Directive states that it applies to “disputes between consumers and businesses concerning contractual obligations in sales or services contracts, both online and offline.” Consumers may only take complaints to the ADR provider if they have first raised them with the gambling business.

Gambling in a Casino

In the section titled ‘The role of the ADR provider’, the UKGC aims to ensure that ADR providers which are approved meet the requirements set out in the ADR regulations. These requirements revolve around and not only: expertise; conflicts of interest procedures; transparency; fairness; legality; and grounds to refuse to deal with a dispute.

One of the first new regulations stipulates that, in the gambling industry, providers are expected to ensure consumers are made aware of the right to receive the “arguments, evidence, documents, and facts” put forward by the other party so that they can consider whether to exercise it.

3. ADR Decision Remit in the UK Gambling Industry

Chapter three begins with disputes which an ADR provider may not consider, including frivolous and vexatious matters or those which have already been referred to a court. The next section deals with disputes and regulatory matters, which are matters for the Commission. As part of the new regulations, it is expected that the Gambling Commission complaints will be directed to the ADR providers to consider whether there is a transactional or contractual dispute that they can look at, as required by the ADR regulations. The ADR provider will also need to consider whether any other legislation, for example, money laundering regulations, impacts on its ability to handle the dispute. The types of disputes related to regulatory matters include, but are not limited to:

  • Non-payment of winnings/account suspended due to anti-money laundering (AML) concerns;
  • Non-payment of winnings/account suspension due to issues related to fraud or crime, but not money laundering;
  • Account suspended due to failed identity checks/refusal to comply with identity checks;
  • Non-payment of winnings/account suspended/bet voided due to issues related to suspected irregular betting or match fixing;
  • Disputing that the gaming machine is rigged or unfair; disputes linked to technical issues; permitted to gamble when self-excluded;
  • Disputing that the gambling business should have intervened to prevent the consumer from coming to harm/spending their money;
  • Disputes linked to unfair terms or practices.

The next section deals with ‘Disputes and Resolutions’. Here, depending on the type of dispute resolution offered, the ADR provider will agree to a resolution to the dispute with both parties or use the available evidence to make a decision to resolve the dispute. If the outcome involves payment for the consumer, the ADR provider may also consider factors such as reimbursement of out-of-pocket expenses caused by the dispute and compensation for distress or inconvenience, if that has been considerable.

In terms of the new standards, there are now general principles for considering to award compensation rather than reimbursement or not. There are five main sub-topics discussed here. The first is that in awarding compensation, the ADR provider must recognise the emotional or practical impact on the consumer, that than punishing the business. The second is that the ADR provider may look at whether a dispute has had a considerable emotional or another impact on the consumer beyond a financial impact.

The third point is that in most cases, providers will not award compensation, recognising that any kind of Gambling Commission complaints or disputes is likely to cause a measure of inconvenience or upset. Providers should consider whether compensation is warranted where the impact of the business’s actions has had a considerable effect on a particular consumer. Fourthly, providers should also recognise that all consumers are different, and what is a significant impact for one person may not be for another.

Mediation and Arbitration

Providers should consider compensation awards at their discretion, taking into account all the circumstances of the case. Finally, the amount of any compensation awarded is at the discretion of the ADR provider and is not subject to appeal within the ADR process. This does not affect the consumer’s right to appeal the provider’s decision in a competent court. The legal effect of ADR processes is that consumers are not prohibited from bringing matters to a court if they feel the adjudication was insufficient.

Finally, this chapter deals with ‘reconsidering the outcome of the dispute resolution process’. ADR providers are expected to make available to consumers information on: whether they will reconsider the outcome of a dispute after the outcome has been issued; the circumstances or grounds for such reconsideration to take place; time-limits for requesting such reconsideration, and the process that it will follow; and what will happen at the end of the process.

4. Independence, Transparency, Consistency and Quality

Current requirements for officials attending to ADR dispute resolutions, together with their remuneration, are the starting theme of chapter four, titled ‘independence, Transparency, Consistency, and Quality’. The chapter then moves on to talk about the Ombudsman’s Association (OA) and its six principles of good governance. According to the OA, for a scheme to be credible, “all stakeholders must have confidence in it and in the independence and effectiveness of the official in the role of investigating and resolving consumer or public service-related gambling complaints in UK.“

The OA suggests six principles of good governance. These are: independence, openness and transparency, accountability, integrity, clarity of purpose, and effectiveness. In particular, ADR providers are expected to meet these principles of good governance in their adjudication processes in the gambling sector, regardless of whether or not a provider is a member of the OA.

Alternative Dispute Resolution

The chapter then moves on to conflicts of interest and states that It expects ADR providers to ensure that parties to the dispute understand that where the dispute is transferred to another provider, the terms and conditions of that provider will apply to both parties for that dispute. In addition, were ADR officials work part-time for the ADR provider and part-time in another capacity, providers must ensure that the official is not conflicted by their non-ADR duties. Any such conflicts must be reported and dealt with.

The final section of this chapter deals with ‘decision quality standards’ where the quality of the decision must be guaranteed and based on a series of quality standards including a thorough examination of all the evidence provided, a clear establishment of facts, and asking of the right questions, among others. In reaching an outcome, the provider must take into account all the relevant information provided in the dispute, correctly interprets and ensures that the rules of natural justice are met. Finally, they must reach an outcome that is reasonable, among other criteria.

5. Customer Service and Information to Consumers

Chapter five starts with information that must appear on the website of an ADR provider. It then moves on to the Online Dispute Resolution (ODR) platform, which is part of the European Union’s (EU’s) regulations for consumer disputes. The next section deals with providing consumers with information about ongoing disputes. ADR providers are expected to provide parties to a dispute with some additional information during the lifetime of the dispute. This will help to keep the process transparent to all parties. In summary, under the new standards ADR providers are expected to:

  • Acknowledge receipt of the consumer’s initial contact within three working days,
  • Provide an update to the consumer at the end of each 30 days that the dispute is ongoing,
  • Provide further updates at the end of each 30 days that the dispute is ongoing if the dispute takes longer than 90 days to complete.

Under the new regulations, parties to a dispute may wish to complain about the ADR provider’s service. For example, if there was no information received from the ADR provider, if there were delays in the dispute process, in the case of unsatisfactory treatment by staff, or in a case where the systems are difficult to use. Therefore, under the new standards, ADR providers are expected to put in place and publish on their websites an effective procedure to handle Gambling Commission complaints or other disputes received about their service.

Lady Justice and the Scales of the Law

There is also a section on vulnerable consumers. In particular, providers will need to consider if the language the consumer has used in raising the dispute, or in any of their other communication, indicates that they might be vulnerable or need additional support to understand the ADR process. If this is the case, then the provider may need to consider ensuring that communication is tailored to the needs of the individual as far as is possible; and whether there are indications that the consumer’s gambling behaviour puts them at risk of being harmed by their gambling, or presents a risk that others may be harmed, among others.

The final section of this chapter deals with ‘Information on Customer Service Performance’ where ADR providers should put information on their websites about their performance against the customer service requirements. In addition, providers may need to consider ‘pausing’ a dispute if the customer takes a significant amount of time to respond to requests for information or engage with the dispute resolution process. Providers should explain when this ‘pause’ is triggered within their dispute process. Providers will also need to establish and explain their procedure for closing a dispute when no contact is received from the customer.

6. Sharing Information About Gambling Complaints in UK

Because of the nature of dispute resolution work, ADR providers are likely to obtain information that would be useful to other stakeholders. Providers are therefore expected to share relevant information with interested stakeholders, where it is appropriate to do so. This could include:

  • Information on emerging trends or themes,
  • Data and reports: ADR providers must collect certain data to meet the requirements of the ADR Regulations,
  • Input to relevant consultations or calls,
  • Providing feedback to gambling businesses,
  • Providing information on potential regulatory breaches.

Under the new policy, ADR providers are expected to submit quarterly activity returns, based on the annual report, containing the following:

  • Number of domestic GB disputes received
  • Types of disputes to which the Gambling Commission complaints relate
  • Number and percentage disputes upheld in favour of the gambling business – overall and for each type of complaint
  • Number and percent disputes settled by the gambling business without an outcome being imposed – overall and for each type of complaint
  • Average length of time taken to receive the complete case information from the gambling business
  • Average length of time that is taken to complete the case having received the complete files of the gambling complaints in the UK.

ADR providers are expected to submit this information in the manner and to the timetable that the UKGC specifies.

7. How We Will Work with ADR Providers

The final chapter of these regulations deals with how the UKGC will work with ADR providers. The chapter states that these additional standards for ADR providers come into force on 31 October 2018 and that once the standards have been introduced, a review of approved ADR providers in the gambling industry will be carried out against the requirements of the ADR Regulations and the new standards. This review will be carried out during the period from November to December 2018.

Two people comes to an agreement

The review will include checking published information and policies against set requirements. An internal statement will also be requested from providers, asking them to demonstrate how they meet parts of the requirements that cannot be evidenced through published information and policy checks. Where necessary, remedial action will be taken with providers who do not meet the standards during the period from January to March 2019.

Then follows a section on ‘Communication Between ADR Providers and the Commission’. This section stipulates that all approved ADR providers will be allocated a named account manager at the UKGC. The account manager will be the ADR provider’s main point of contact at the Commission and will handle enquiries from ADR providers in the first instance. This may include referring enquiries on to subject experts within the UKGC, where necessary.

The new regulations stipulate: “Via their account manager, ADR providers will need to inform us of any changes to their circumstances that might affect their approved status. This includes changes to ADR officials, who must meet the criteria in the ADR Regulations.” The regulations define an ADR official as “an individual who (solely or with other persons) is involved in the provision of alternative dispute resolution procedures offered by an ADR entity, or ADR applicant, whether as a case handler or in a management capacity.”

An ADR provider may request to be removed from the list of approved ADR providers. In such an instance, the provider should provide written confirmation of their intent to their account manager as soon as possible.

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