DMCC Act 2024 comes into force

The Digital Markets, Competition and Consumers Act 2024 came into force in April 2024 and has revoked the EU derived 2015 ADR Regulations, according to a policy report published in October 2025¹. The 2015 regulations had implemented the EU Directive on Consumer ADR (2013/11/EU)¹.

The report states that the Act paves the way for secondary legislation intended to improve the current regime in terms of quality, consistency and visibility, but adds that it does not go far enough¹. It says clause 294 of the Act stipulates that ADR providers must not charge the consumer a fee for carrying out ADR, but that conditions allow fees to be charged, including approval by the Secretary of State¹. It gives the example of the Centre for Effective Dispute Resolution Airlines (CEDR), which it says charges a fee at the time of application even in cases of flight delays or cancellations¹.

The report sets out the scale of consumer detriment it says the system is failing to address. It cites a survey estimate that 72% of UK consumers, around 38.5 million people, encountered at least one instance of consumer detriment over the year, culminating in nearly 295 million individual problems¹. It puts the annual cost of these everyday disputes at £71.2 billion in consumer harm¹. The proportion of consumers reporting at least one problem with a purchase rose from 69% in 2021 to 72% in 2024; 78% took some form of action, 22% did not, and in 25% of cases the seller or supplier took no action at all¹. The report also cites findings that 22% of detrimental experiences had a negative or very negative effect on household finances, 24% had a negative effect on mental health and 14% adversely affected physical health¹.

On awareness, the report says just 20% of people recognise the term ADR, and cites Ofcom finding that signposting rates in regulated sectors are as low as 19%¹. It cites research by BEIS in 2018 finding that 70% of consumers who did not use ADR before going to court said it was because the trader refused to participate¹. On participation, it notes that Ryanair withdrew from the AviationADR scheme in 2018 following disputes over compensation claims for flight disruptions caused by staff strikes, that other airlines have also opted out, and that at that time around 20% of UK air passengers were not covered by any ADR scheme¹.

Why it matters for households

The change matters to any household in a dispute with a trader that has not been resolved directly. The Alternative dispute resolution landscape described in the report is uneven: some sectors have mandatory ombudsman schemes overseen by sector regulators, while a single authority oversees a wide range of schemes in unregulated sectors¹. Where a business is not required to participate, it can withdraw after an unfavourable decision, which the report says leaves consumers with a hollow victory and no real redress¹. Fees charged by some schemes, and lengthy or unclear timeframes, are identified as barriers that fall hardest on those already facing financial hardship¹.

For complaints about financial firms, the Financial Ombudsman Service remains the statutory route, and its time limits and award limits are unchanged by the Act. The report's recommendations, including a single ombudsman for high-complaint sectors such as aviation, home improvements and used car sales, and mandatory participation in high-detriment sectors, would require secondary or primary legislation and have not been enacted¹.

What happens next

The report says the government should use forthcoming secondary legislation under the Act to set criteria for selecting competent authorities, to ensure ADR is free for consumers, to require enforceable timeframes, and to mandate clear signposting of ADR options¹. It says that if mandatory participation cannot be established through that secondary legislation, new primary legislation should follow¹. Separately, it notes that a new ombudsman will be created in the water sector following the Independent Water Commission's final report, published on 21 July 2025¹. It also cites a CMA remedies working paper on the vets market investigation dated 1 May 2025¹. No dates for the secondary legislation have been reported.