450 Chapter 17The resolution of business disputes
might make recommendations to improve matters generally within the area concerned. It
is often the case that the awards of Ombudsmen cannot be legally enforced. However,
most traders will comply with any award because the publicity attached to not doing so
would be very undesirable. In England and Wales the following Ombudsmen operate in the
private sector: the Legal Services Ombudsman, the Housing Ombudsman, the Financial
Services Ombudsman, the Estate Agents Ombudsman, the Funeral Ombudsman, the
Investment Ombudsman, and the Pensions Ombudsman. There are also Ombudsmen oper-
ating in the public sector, including: the Parliamentary Ombudsman, the Health Service
Ombudsman, the Local Government Ombudsman and the Independent Police Complaints
Commission.
Complaint-handling bodies which do not involve an Ombudsman exist in relation to
complaints about HMRC, Social Security, the Child Support Agency, barristers, prisons,
subsidence and waterways.Essential points
n Civil disputes are first heard in either the county court or the High Court.
n Any UK court can refer a matter of EU law to the European Court of Justice to get an
authoritative opinion on the matter.
n Litigation in court has many disadvantages: the costs of litigation can be very high;
litigation is very stressful; it can take a long time; it can destroy business relationships,
and the public nature of hearings can lead to bad publicity.
n Alternative dispute resolution can avoid some or all of the disadvantages of litigation.
n The simplest form of alternative dispute resolution occurs when the parties agree to
settle their case out of court.
n Arbitration involves an impartial third party, an arbitrator, making a binding resolu-
tion of a dispute.
n A mediator tries to help the parties settle a dispute by seeking agreement on certain
matters and by communicating to the parties the position of the other party.
n A conciliator attempts to resolve a dispute by suggesting a compromise to which both
parties might agree.
n Ombudsmen investigate complaints arising within certain trades or industries.Practice questions
1 For many years a wholesaler has supplied a garden centre with flower seeds. The wholesaler
and retailer have always enjoyed good relations, but a serious dispute has now arisen over
the quality of seeds delivered last year. The garden centre say that many of the seeds did not
produce flowers and that customers have been complaining. The wholesaler has not received
any similar complaints from other retailers supplied from the same batch of seeds.
(a) List, in order of importance, the reasons why the parties might prefer to resolve this
dispute through arbitration rather than through the courts.