Alternative dispute resolution (ADR) means settling your dispute without asking a court to decide on your issue. The ADR Directive is European legislation which required Member States to act to increase consumers' access to ADR.
When implementing the ADR Directive the UK government noted in particular that there was an unmet need regarding complaints from consumers that stemmed from aviation contracts. As the UK's specialist aviation regulator the CAA was appointed by the government to be the UK's competent authority to approve ADR providers as fit to offer ADR services to consumers of aviation services.
The CAA‘s role, as a specialist aviation regulator, combined with its strategic objective of empowering aviation consumers, means it is best placed to consider the competence and suitability of ADR applicants to provide alternative dispute resolution procedures to consumers of aviation.
From time to time the CAA will review and revise its policies regarding ADR. A consultation was conducted in 2020 to consider a number or amendments to its policy for ADR applicants and approved ADR entities, which it considers will make ADR work better for consumers and which will further encourage airlines that do not currently participate in ADR to consider the merits of the schemes on offer. Details of the decisions made in regards to these changes have been published: Amendments to the CAA’s policy for ADR applicants and approved ADR entities (CAP1324) CAA Decision (CAP2104). Where permission was granted by the respondent, the CAA has consolidated and published submissions received. These can be found here:
How to apply for ‘ADR entity’ status
Organisations wishing to gain approval from the CAA to obtain ‘ADR entity’ status will need to read our guidance on how to apply as well as our general guidance for ADR entities.
Guidance on how to apply
Guidance for ADR providers
- Issues underlying compensation claims under Regulation EC 261/2004 which the CAA does not consider to be complex or novel (CAP1324A)
- Information for ADR entities approved by the CAA including guidance on regulatory and additional information requirements (CAP1390)
- Consolidated UK Regulations
- EU Directive on alternative dispute resolution for consumer disputes
- ADR entity approval and appeals process (CAP1426)
- Withdrawal of ADR entity approval process (CAP1427)
Fees for ADR Providers
The CAA charges an initial application fee to those organisations who wish to apply to be approved by the CAA to provide ADR services to aviation consumers in respect of disputes stemming from a contract. This fee is non-refundable even if the application is unsuccessful or withdrawn. We also charge an annual oversight fee to approved ADR providers.
The initial application fee from 1 April 2017 is £5,684. This fee is payable at the time of submitting an application to be approved by the CAA.
ADR providers approved by the CAA are also required to pay to the CAA an annual oversight fee as a condition of their continued approval. The annual oversight fee is currently £13,642, payable on 1 April each year.
The CAA will raise an invoice in respect of the annual oversight fee which is payable by the approval holder on demand.
List of approved ADR providers
Under the regulations the CAA must maintain a list of approved ADR providers.
We also publish a list of airlines who have signed up to ADR providers.
An introduction to alternative dispute resolution for air passengers
ADR stands for Alternative Dispute Resolution.
It refers to a range of processes that can resolve disputes between e.g. a business and a consumer, without the need to go to court.
It is the CAA's view that the provision of quality ADR services for consumer disputes stemming from contracts for aviation services will benefit consumers and lead to quick, fair, low cost (if not free) and binding solutions to their problems.
The CAA has approved independent complaints handling bodies that consumers can call on to help resolve consumer complaints to airlines about air travel if their airline has agreed to participate in ADR.
Under ADR, if a passenger is in dispute with an airline - for example, they are claiming compensation for a delayed flight - and the airline's own complaints process has been exhausted, the consumer will be able to refer their case to an ADR body.
The ADR body will then assess the case in an efficient and timely manner and provide a solution, which, if acceptable to the consumer, the airline must comply with.
This means that if the ADR scheme provider says the airline should pay compensation, the airline must do so.
If consumers do not accept the ADR provider's solution the consumer can reject it and may pursue their legal rights through the courts (subject to the courts' time limits for bringing a court claim).
Once an ADR provider has all the necessary information to consider the claim, ADR bodies have to complete their handling of a case within 90 days. In practice, many cases will be dealt with quicker than this. Consumers should let the CAA know if approved ADR providers are not meeting these timescales.
EU rules do allow ADR bodies to charge a small fee for handling a complaint.
If ADR bodies do charge a small fee (the maximum is £25), this must be refunded to the passenger if the ADR body upholds the passenger's complaint in any way - even if this consists solely of an apology from the airline, if that is what the consumer was seeking. Consumers with complaints that relate to disability issues are not to be charged a fee
No, participating in ADR schemes is currently voluntary for airlines.
We believe ADR delivers the best outcomes to consumers that have disputes stemming from a contract with an airline.
However, the CAA's complaints service will continue to handle complaints for consumers flying with airlines that have not agreed to participate in an approved ADR scheme.
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