New way to settle telco disputes: Safeguards needed to prevent abuse

A proposed alternative dispute resolution (ADR) scheme meant to help shift the odds in favour of customers when disputes with their telcos occur might go too far, say legal and industry experts.

In a consultation paper released last Wednesday, the Infocomm Media Development Authority proposed a two-stage process to settle disputes.

Mediation is to be carried out first by an appointed third party, and if the issue is still not resolved, another independent referee will make a formal ruling in a process known as adjudication.

If a consumer accepts the ruling, the decision will be binding on the telco. A consumer who rejects the decision can still turn to the courts or the Small Claims Tribunal.

"Allowing consumers to reject the ruling puts too much power in their hands," said lawyer Gilbert Leong, a senior partner at Dentons Rodyk & Davidson.

The common fear is that vexatious consumers could wear telcos down and impinge on the telcos' operational efficiency.

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Consumers pay only 10 per cent of the case fees - or as little as $10 for mediation and $50 for adjudication - with telcos bearing the rest.

Ms Tanya Tang, chief economic and policy adviser and a partner at Rajah & Tann, said there could be a risk of abuse and "forum shopping" when consumers under the ADR scheme reject the adjudicated decision and turn to other channels to hear their case.

Allowing consumers to reject the (adjudication referee’s) ruling puts too much power in their hands. Lawyer Gilbert Leong

She noted that in other countries, claimants who did not show good faith in resolving the disputes under the ADR scheme may be barred from commencing new proceedings to prevent abuse.

Still, some telcos have wondered why there is a need to duplicate existing dispute resolution channels.

The Small Claims Tribunal charges consumers only $10 for both mediation and adjudication for claims under $5,000. It has an e-filing system for such cases.

Ruling by a referee during adjudication in the tribunal, which hears about 10,000 cases a year on average, is binding on both parties.