Harnessing the power of ADR to settle disputes in your renewable energy business 

The renewable energy industry is accelerating as the UK grapples to hit its net zero targets and global events continue to affect the supply and trade of fossil fuels.  

Photo by Dylan Gillis on Unsplash

In this feature, Tracy Dilworth, senior dispute resolution officer at Dispute Assist, explains that while an increase in eco-conscious customers may mean more custom for businesses operating within the sector, these firms could face more disputes. 

Disputes with customers threaten any business, as traditionally, these cases are escalated to the courts at great financial expense. Litigation can also cost businesses their time, as significant preparation is required, and on average, it takes 360.5 days for a civil claim to go through the UK’s small claims system. 

Renewable energy installers need to safeguard their reputations  

For a business operating within home improvement, such as a renewable energy installer, disputes with customers can cost them their reputation too. As the court system is open to all, details of a dispute shared in this public forum may cast a business in a bad light. Resorting to court action to settle a dispute over more cordial means can significantly damage an installer’s image, as it may suggest they have issues with providing efficient customer service.  

When it comes to settling disputes, some may think the courts are their only option, but there is another way. In fact, there are many ways renewable energy businesses can resolve disputes with customers without having to step foot in a courtroom. In recent years, alternative dispute resolution (ADR) has become increasingly popular across the home improvement and renewable energy sectors, yet many are still in the dark about its many benefits. 

What is ADR? 

ADR refers to an array of dispute resolution methods all with varying levels. While some ADR methods are more hands-off, others are legally binding and involve experts who ensure a balanced resolution is achieved for both sides in the dispute. 

Mediation is at the softer’ end of the ADR scale, where an independent professional is trained to ask the right questions. Through mediation, it is hoped that the parties in dispute can be brought together for a facilitated meeting to reach a resolution on their own. The person asking the questions can challenge both sides to help them reach a compromise, but they do not necessarily have extensive experience in the sector the dispute falls in. 

The aim of resolving a dispute 

Up a step on the scale is conciliation and, like mediation, both parties will be brought together to settle a dispute themselves. Under conciliation, the independent officer should have some level of industry experience and, therefore, this officer can provide some possible resolutions to both sides if discussions hit a brick wall. Another ADR method is adjudication, which is usually associated with the ombudsman landscape. Often legally trained individuals can adjudicate on the dispute, but the result is usually only legally binding on the business. 

And then at the ‘harder’ end of the ADR scale is arbitration, a method of dispute resolution that is legally binding on both of the parties in dispute. The dispute will be passed on to an independent arbitrator, usually legally qualified, who will then decide and explain their reasoning to both parties.  

While arbitration is an effective way of dealing with disputes, it can be time-consuming. Once a case gets to the arbitrator and a decision is finally made, the case notes then need to be written up and provided to those involved in the dispute. 

Allowing disputes to be resolved as quickly as possible 

Another ADR method, expert determination, takes all the best bits of arbitration to deliver a result quickly and efficiently. Expert determination is often faster than arbitration because it is a process overseen by an expert well-acquainted with the dispute field. Unlike arbitration, a decision made through expert determination will not be explained in case notes. This cuts administrative time and allows those in dispute to achieve a resolution and move on as quickly as possible. 

The ADR method required for a dispute will differ on a case-by-case basis. But overall, ADR offers a cheaper and faster route to a resolution which is just as effective as court action while being less combative. 

ADR in the renewable energy sector 

Many businesses operating within the renewable energy sector may already be optimising ADR to deal with customer disputes. But there are still swathes who remain in the dark about what ADR even is and how it can benefit their business. 

ADR has been around since the 1980s, but in 2015 it became a legal requirement for traders to signpost customers to an ADR provider in cases where they cannot resolve a complaint themselves. The UK government has also suggested that it will make it mandatory for home improvement businesses to take part in mediation or arbitration when a dispute arises. While a date for this legislation to come into force hasn’t been confirmed yet, businesses should start preparing now if they haven’t already in order to be compliant. 

By embracing ADR, businesses achieve peace of mind that they are being compliant with legislation. But they also know their business is protected financially and reputationally should a dispute arise. Utilising the services of an ADR provider means contractors can ensure the majority of their time is spent on profitable work rather than dealing with customer disputes or the complicated legal system. Every dispute takes up a huge amount of time, energy, and sometimes money. And despite the best efforts of hard-working tradespeople, customer disputes are unfortunately commonplace in this industry.  

Technical issues are the most common cause of disputes in renewables 

Technical issues are a common cause of dispute in the renewable energy sector, making up 43.4% of cases received by Dispute Assist and ranking as one of its worst-performing sectors in terms of the percentage of overall issues for a sector. Of those technical issues reported, 64% were due to system performance, 19.3% were due to generation issues and 16.7% were due to connection issues.  

Contractual issues also comprised over a quarter of cases received (27.5%), including problems with payment, misselling, variations from the agreement, incorrect or missing paperwork, cancellations, incomplete contracts, and servicing and maintenance issues.  

The good news is contractual issues are improving year-on-year according to internal data, suggesting contractual improvements are being seen generally across the renewable energy sector. 

The volume of cases received from the renewable energy sector is quite small in comparison to other home improvement sectors, but this is relative as renewable energy installation volumes are significantly smaller. But it is better to be prepared for every eventuality so that if a dispute does arise, it can be delegated to an expert. 

How to implement ADR in business 

ADR methods can be used to deal with many different types of customer disputes, from workmanship issues to concerns over products. Of course, these options can be explored once a business and customer are in dispute. 

But to capitalise on the cost-effectiveness of ADR, many home improvement businesses weave ADR provisions into their initial service contracts. For a small fee, both business and customer can rest assured that should a dispute develop further down the line, access to efficient and speedy resolution is already lined up. 

While ADR may seem confusing, speaking to an expert can help you explore your options, ensuring your business is as protected as possible. 

For more information, visit https://www.dispute-assist.co.uk/