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ADR case No 1

Having been in business for nearly 15 years, in 2012 we had our first case where a customer took us to ADR (Alternative Dispute Resolution). This is obviously a serious concern, and has led to some changes in the way we do business with customers including some more bureaucracy. Sorry about that.

This page explains a bit about the case, from our point of view. It does not name the complainant though.

What we provided?

A customer came to us wanting to do some live streaming of the Royal Wedding from a site in London. Using ADSL lines to do this was new for them and they came to us as we have some experience in bonded uplink of lines. It seems they needed around 8M uplink in total to stream four video streams. Obviously they needed it working in time for the event, and they did come to us a couple of months in advance. They needed phone lines, broadband and equipment.

The short answer as to what happened is that we provided a service with sufficient uplink in time for the event. This should be a success story!

What went wrong?

The long answer is that things did not go to plan. There were various issues, most of which related to the way we get lines from BT. For a start BT will not allow annex M on a new phone install as a simultaneous order, so this meant things being installed in stages. The phone lines took a while to install in the first place. For two of the lines BT managed to not record the DP details correctly so refused to even accept an order for annex M on the broadband. It was slow going and a lot of chasing BT. But we managed it.

There were a few cases where we were not very prompt in replying to emails from the customer as well. It is clear the customer had a lot of stress - and the final solution was only live 3 days before the event. I would be stressed!

What did the customer complain to us about?

It seems the service our customer was offering did not sell as well as they had hoped. One of the reasons, so they claim, was the delay installing lines meant they could not demonstrate the streaming. What does not quite add up is that they had 2 lines with annex M a month before, so could demonstrate the streaming, just not as many streams, so we are at a loss as to why this was a problem. We never did get much of a straight answer.

The complaint was simply that they should not have to pay the install price because of the time it took to install. I was quite blunt in my replies explaining that this made no sense. If there are actual losses, then work them out - they are unlikely to be the same as the install charges by some fluke. Also, the fact we contractually agreed to exclude consequential losses, and contractually agreed that we don't guarantee and install date, means that even if they have losses then we won't be paying them.

I appreciate it is a tough line to take - but this is a business to business contract and we don't hide anything. We only charge from when the services are each provided. However, we did feel a bit sorry for them and agreed (or I thought we agreed) a good will credit, refunding some of the charges for the services (over £270).

To be honest, we thought that was the end of it. This is where some of the bureaucracy comes in as we will be asking any customer to confirm the dispute is "resolved" from now on.

What next?

They paid for the services up to end of April, in full.

They were happy with the service provided, they said so.

In June we asked them to confirm they agreed the ongoing services being provided and the costs, and they said "We agree". Again in June, we said that if they did not need the services they could cease them on the on-line order form on the web site and they said "we want to continue with the service". They did not put in an order for a cease.

You cannot get a lot clearer than that, so we carried on providing the service, and they used it. The routers stayed on line. Some traffic passed from time to time. We invoiced them.

But they did not pay any more. They did not say why, and did not dispute the invoices or suggest that they had asked to cease the service or anything. They complained that we were threatening to take them to court, and they re-iterated their annoyance with the original install delays. They said they did not understand the account (which was simple - a long list of unpaid invoices and the one credit). They did not come up with an actual figure of any sort of "claim".

Annoying, but in August we ceased services for non payment. By January we were getting fed up sending letters and were ready to take them to court. We actually issued a county court claim just before the ADR provider took the case.

What they complained about to the ADR provider?

We don't know! The ADR company will not show us the full details of the complaint! All we have is a few paragraphs, which claim they were over charged by £6.69, and how unhappy they were over the install delays. They did not quantify any losses.

It seems they complained about the delay, and how we handled the dispute.

It seems they also claim to have asked to cease services end of May. We don't think they did, and the email replies in June are very clear that they wanted to keep the service and agreed the charges, so we are confused by this apparent claim.

It seems they complained that we were rude and dismissive in replies.

What did the ADR provider do?

They accepted the case, and billed us the £400 case fee. They asked for the case file. They then made a decision. We asked for the decision to be reviewed and they did not changed it. End of story!

They did not discuss the case with us. They did not allow us to see the accusations against us. They did not "arbitrate" the dispute to find an resolution. They just dictated their decision.

They agreed we were not in breach of contract but then demanded we pay £500 "good will" and write off all charges for services after May.

Legal advice was that we have no choice but to pay up, so we have.

What was wrong about this case?

Some of this may be my personal opinion as director, but I am trying to be factually correct here.

  • The customer is a communications provider - we have looked at their web site and they claim to operate microwave communications links, and do video transmission services. The case for which they were using the ADSL the live streaming of video which they were selling as a service. That makes them a communications provider by any definition and clearly by the definition in the Communications Act. The Communications Act makes it clear that ADR is for consumers and small businesses and that such definition excludes anyone that is a communications provider. This means the customer is quite simply not eligible to take a case to ADR. Yet the ADR provider took the case!
  • The claim was more than 9 months after they complained to us - a time limit in the ADR providers terms. The ADR provider say that the customer contacted them in October. It is hard to see how this is relevant as they did not make a claim in October, they made a claim in January. They even told the court in the defence they filed that they referred the case to the ADR provider in January! This is another reason the claim should not have been accepted.
  • At the time of complaint they had ceased being a customer - the Communications Act only requires us to provide ADR to customers, not ex-customers.
  • One of the few things the customer did say in the paragraphs we were sent by the ADR provider is that the customer would be happy simply to be released from contract without penalty. We immediately confirmed that not only did we agree that request but we already has done so in August - no penalties. They just have to pay until that point. We did not even charge the normal notice or cease charges. So the case should not have been taken as we had already resolved the dispute in accordance with the customer's stated requirements for doing so.
  • The terms of the ADR provider are clear they should consider a mutually acceptable solution first. They did not even try and find a mutually acceptable solution, and completely ignored the offer to cease the contract with no penalty - a solution proposed by the customer and agreed by us!
  • The ADR provider agreed were are not in breach of contract - that means we won the case, surely - but no! They demand we pay £500, which makes no sense. We are not in breach of contract so we are not liable to pay anything under contract law. They are meant to take in to account the law. They did not explain how the arrived at the figure of £500 either.
  • The contract we have with the customer limits our liability, and the ADR provided ignored this limit by awarding £500 which is in excess of the limits agreed. They are meant to take in to account the contract terms.
  • The case file we provided has clear emails in June confirming the customer wanted to continue the service and understood exactly what they were paying for - the ADR provider ignored these and demanded we cancel charges. That just means they ignored clear facts. Again, that is just wrong!
  • The fact that the supposed cease date and the ongoing invoices where not a complaint that had been brought to us in the first place, and clearly post dated the date of the complaint being considered (March) means that we had not been given the opportunity to resolve those disputes - yet the ADR provider considered and ruled on those issues. That is against their terms with us.
  • Even pointing out all of these issues to the ADR provider, they did not revise their decision.

At the end of the day we have a company (not a government body or a court of any sort) able to take any case they like (even when the law is clear the case cannot be taken to them); decide whatever they like (even ignoring facts); and force a telco/ISP to pay up. It is, in my opinion, totally mad.