NEWS EXTRA: SETTLING DISPUTES


When DIY retailers and professionals should compensate in a customer dispute


The financial problems currently facing DIY retailers and service providers show little signs of slowing down, with the rising cost of materials continuing to be a leading challenge for 46% of tradesmen. Combined with a lack of skilled labour and persistent supply shortages, profitability is likely to be of huge concern to many businesses operating within this sector. By Ciarán Harkin, managing director of Dispute Assist


The home improvement market has yet to plateau after a £200 billion injection which consumers accumulated over lockdown. Although this is positive for DIY professionals looking to generate new revenue streams as it shows demand for their services is out there, the current financial roadblocks will make it more difficult for businesses to meet the demand. DIY retailers and professionals


are already feeling the strain in the form of customer disputes – in the last year, 44% of UK customers have filed a chargeback to recoup their finances. In this sector, disputes with customers over products, installation and costs occur, and home improvement professionals across every part of the supply chain must be prepared to deal with a larger pool of customer disputes as the economic environment becomes more fraught.


So just how commonplace


are disputes between customer and business within the home improvement sector, and when are businesses actually required to compensate?


Frequency of disputes Our recent research report, The Future of Home Improvement Disputes, discovered that only 7% of home improvement professionals do not spend any time resolving customer disputes, showing how commonplace disagreements are in the working lives of DIY professionals. It also revealed that 62% of homeowners, which equates to around 15 million households, have had a negative experience with home improvement works. According to the homeowners in question, 30% of the time it’s because the professional didn’t do a good job, and 23% because they charged more than expected and the works failing to be completed on time.


8 DIY WEEK JULY 2023


before they reach the court. Although the most appropriate method will depend on the circumstances of the individual case, some of the mostly commonly used methods include mediation and conciliation, expert determination, and arbitration. In practice, ADR is a cheaper,


Customers would even consider filing a chargeback because they disagree with the company policy, rather than having an issue with a particular item.


Should one of these situations


occur, those in the DIY industry can usually come to an informal agreement to rectify the problem by maintaining positive communications. However, if they aren’t reactive to customers’ concerns and fail to offer a timely resolution, they may be required to offer a refund.


Informal resolutions Before reaching the stage where compensation becomes mandatory, there are a number of avenues for DIY professionals or retailers to explore. First, they should always have a detailed conversation with the customer to evaluate their concerns and establish whether they result from a misunderstanding, or if the fault does indeed lie with themselves. Depending on the severity of the problem, the appropriate solution will likely fall under a repair, a removal, or a replacement. For instance, an installer can easily repair a bathroom cabinet that was chipped during the installation, replace the cabinet


if the damage is too severe to repair, or alternatively, remove the cabinet entirely and provide the customer with a full refund. To reach a resolution in this manner is ultimately the best possible outcome as it increases the likelihood of preserving positive customer relationships. Given the volume of industry competition caused by the current economic pressures, building a trustworthy reputation is vital to combat the loss of future business streams.


Compensation: when is it necessary? Although the previous steps may have rectified the initial problem, sometimes the damage surpasses the physical works – in which case, the customer is likely owed compensation. Primarily, this would be due to issues that have caused problems beyond small inconveniences to their daily lives. For example, if they have been forced to leave their home because the mistake has created an unsafe environment, or they are unable to cook meals due to a loss of facilities.


The amount of compensation


awarded will take the extent of the disruption into consideration. However, the general position is


that a customer should be put back in the financial position they would have been in had the installer completed the job without mistakes. Financial impact aside, customers may also be successful in claiming for any emotional distress or suffering.


Alternative dispute resolution


When parties can’t settle on a compensation amount or reach an informal agreement, disputes can sometimes escalate to the courts. The Dispute Assist report found that 36% of home improvement professionals revealed that dissatisfied customers have filed a court claim against them. However, taking disputes to court often sees both parties investing a significant amount of time and money to potentially struggle to secure the outcome they hoped for. For DIY professionals and retailers, court proceedings also encourage the likelihood of reputational damage, which has the potential to cause further financial setbacks by repelling future customers and increasing the appeal of competitors too. Instead, alternative dispute


resolution (ADR) combines various processes to resolve disputes


faster, and less combative approach than court proceedings. However, according to our report, 28% of home improvement professionals don’t know what ADR is, and 42% of those that do are still not part of a scheme. This is concerning as 75% of homeowners would be more likely to use a business that was part of a scheme, suggesting that DIY professionals and retailers are missing out on valuable opportunities to boost customer loyalty. With 43% also spending between two and five hours a month dealing with complaints, it is clear to see that attitudes and awareness of ADR across the home improvement sector must be raised for financial protection.


Reasonable steps As DIY retailers, professionals and their customers attempt to maximise their finances and continue to battle uncertainties, it is inevitable that a greater number of disputes will occur, especially as the home improvement boom is yet to subside. In order to protect themselves and customers, DIY service providers should always manage customers’ expectations prior to commencing works. Providing robust contractual and warranty paperwork also helps to minimise their liability when the possibility of a dispute does arise. In a time when financial protection is paramount, utilising informal dispute proceedings and ADR is essential to avoid reputational damage and damaging customer relationships. Visit www.dispute-assist.co.uk for more help and advice.


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