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Dispute Resolution, often known as ADR (Alternative Dispute Resolution), refers to methods of resolving disputes without going to court and helps both parties avoid costly and lengthy legal proceedings.

ADR falls into two main categories:

  • mediation – where an independent third party will help disputing parties come to a mutually acceptable outcome (such as during divorce proceedings)
  • arbitration – where the independent third party considers the facts and takes a decision that is often binding on one or both parties.

The Code’s dispute resolution scheme is fully independent and run by award-winning dispute resolution experts, CEDR Ltd. CEDR is approved by the Chartered Trading Standards Institute (CTSI) as the ‘competent authority’ acting on behalf of the Secretary of State for dealing with disputes. Schemes such as our Independent Dispute Resolution Scheme (IDRS) and ombudsman schemes are designed to give consumers access to free and impartial redress which is relatively simple and quick to resolve.

The Code itself applies to most* builders under the insurance protection of one of the supporting Home Warranty Bodies:

  • NHBC
  • Premier Guarantee
  • LABC Warranty
  • Checkmate

Where issues are identified under the Code, buyers can use the Code’s IDRS to pursue their complaint.

A dispute may arise where a buyer believes the builder has failed to meet the Code’s requirements but it falls outside the home warranty body’s resolution scheme for defects or damage. For example, if a builder failed to refund a reservation fee when the reservation was cancelled, this would be covered by the Code.

The buyer may apply to the Code’s IDRS and a trained adjudicator will review written submissions from both parties before deciding whether or not the buyer has a legitimate dispute. Both the buyer and the builder will have the opportunity to review the adjudicator’s proposed decision to correct any misunderstandings or fill any gaps in evidence.  Once the adjudicator has made their decision the consumer has six weeks to confirm whether they accept it.

Under the rules of registration, the home warranty bodies require each registered builder to honour any award made against them under the IDRS.  If a builder fails to honour an award, the home warranty bodies can apply sanctions including financial penalties, re-training or suspension/removal from the new home warranty bodies’ registers.

In the UK, there are already several large and well-established ADR schemes in regulated sectors. The Code is approved under the Chartered Trading Standards Institute (CTSI) Consumer Codes Approval Scheme (CCAS). Having an ADR scheme is one of the requirements set by the CCAS in approving codes to join the scheme.  According to the CTSI over £2.2m was recovered through approved code schemes in 2022 alone. Our IDRS forms an essential part of the work we do to support new home buyers.

Further reading:

If you believe a builder has breached our Code:

*Excludes homes that at the time of reservation by the first buyer are covered by the New Homes Quality Code. Builders operating under the NHQC must still comply with Code requirements for new homes reserved prior to activation with the NHQB.

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