The Office for Legal Complaints (OLC) has given up its attempt to become an alternative dispute resolution entity in compliance with the 2013 EU directive on consumer ADR.

The decision, announced yesterday, means that client care letters will need to signpost another ‘ADR entity’ competent to handle complaints.

In a statement, the OLC said it had decided that it will not proceed with its application based on changes to its scheme rules on which it consulted in September.

Instead it will ‘explore whether there is an alternative approach to operating as an ADR entity, such as introducing a parallel scheme or offering new “alternative” dispute resolution services that better mitigate the risk and issues it has identified, and that have been raised by stakeholders’.

The 2013 directive, intended to help the functioning of the EU internal market, has been transposed into UK law through regulations laid in March and June this year. Since 1 October it has required law firms to signpost consumers to an ‘ADR entity’ competent to handle any complaint.

The Law Society updated its guidance on the subject in September. 

The OLC, which runs the legal ombudsman scheme, had intended to seek certification under the ADR directive. However in July this year it admitted that its complaints-handling scheme would require fundamental changes in order to comply.

A consultation on the changes, which would extend time limits for accepting complaints and cut the number of grounds for dismissing them, ran from September to November. 

The ombudsman’s statement yesterday suggests that responses to the consultation were critical. The OLC’s chair Steve Green said the responses ‘have enabled us to give full and thorough consideration to how we should proceed’.

Green said that ‘given that the organisation’s key priority at present is to improve the efficiency and quality of its statutory scheme, it is not the right time to take on the additional risks and operational changes that would arise from proceeding with the scheme rules changes as proposed’.

He added that: ‘We are not giving up the ambition to become an ADR entity but we do want to explore alternative approaches to doing so. We will do this over the next six months.’