How does the Independent Dispute Resolution Scheme work?

Under the Code, home buyers can raise a claim using the Code’s Independent Dispute Resolution Scheme (IDRS) if they believe you have breached the Code. With the average small claims case now taking approximately 52* weeks to resolve through the courts, the IDRS provides a faster, more accessible option for home buyers and builders alike.

The Code’s IDRS is run by CEDR Ltd. CEDR Ltd is approved by the Chartered Trading Standards Institute as the ‘competent authority’ acting on behalf of the Secretary of State for dealing with disputes that are raised with the builder from the Reservation date until two years after the date of Legal Completion.

Claims can be raised through our IDRS where a home buyer believes you or your sales agent have failed to meet the Code’s requirements and their complaint falls outside their home warranty body’s resolution scheme for defects or damage. 

Some Code requirements and the maximum amount buyers can claim differ depending on when they reserved their home:

Stages of an IDRS Claim

• A claim starts when your buyer completes an application form and sends it to the Independent Dispute Resolution Scheme with their statement of evidence. Their statement should contain all the information relevant to their complaint and where possible identify the Code requirement(s) they allege has/have been breached. They should also provide copies of receipts or other evidence of expenditure if making a financial claim.
• The Independent Dispute Resolution Scheme will invite you to respond to the buyer’s statement.  At this stage you may resolve the complaint without a formal adjudication – this is called ‘early settlement’ and will reduce the case fee you have to pay.
• If early settlement does not happen, you must submit your response to the Adjudicator along with your case fee payment. Your buyer will be given a copy of your response and asked to respond if they wish. 

Have a look at previous cases and Adjudication Summaries

• The adjudicator will consider both submissions and decide whether you have failed to comply with the Code and whether the buyer has suffered financial loss as a result.  Both parties will be expected to have acted reasonably and to have controlled their costs
• The adjudicator will make a proposed decision and send it to both parties. Where a breach of the Code has been found the decision may be a performance award (where you may be instructed to do something) or a financial award (where you have to pay some money as determined by the Adjudicator) or a combination of the two. Both parties are invited to notify the Adjudicator of any inaccuracies or provide missing information before a final decision is made.
• The adjudicator may make a discretionary award for inconvenience. They will do so if, in their sole consideration and opinion, the buyer has been caused more than minor inconvenience as a result of the complaint and/or how you handled it. The buyer may not receive an award for inconvenience alone if the adjudicator does not find a breach of the Code. 
• The adjudicator’s decision cannot be appealed; it can only be accepted or rejected by the buyer.
• Under the rules of registration, the home warranty bodies require each registered builder to honour any award made against them under the IDRS.  If the buyer accepts the award, the courts will usually recognise this as evidence that their claim was valid should they need to take further action to enforce it.
• If the adjudicator makes a financial award and the buyer unconditionally accepts it in writing, the adjudicator must notify you of this in writing. Your organisation must pay the award to the buyer within 20 working days of the date of the adjudicator’s written notification.
• If the buyer refuses to accept the award, any subsequent legal action is likely to take account of the adjudication decision.
• Where a buyer accepts an award, you remain liable for it, even if you are removed from a home warranty body’s register.

Please Note: This Code’s IDRS is independent of the home warranty bodies and decisions made under the IDRS are not insured under the home warranty bodies’ home warranty schemes.

Need more information?

More details about the IDRS can be found in the Code Requirements and Builder Guidance documents for the fourth edition and fifth edition of the Code.

_{*Correct as at Jan-March 2023, Ministry of Justice}