Decision : Upheld
Decision date : 14 Aug 2017
The Ombudsman's final decision:
Summary: There was fault by the Council in the conduct of mediation carried out by trading standards officers. That led a suspicion of bias and a loss of confidence in the process. There was also fault in record keeping and the provision of information, but that did not lead to significant injustice requiring remedy.
- The complainant, whom I shall call Mr B, complains the Council treated him unfairly in connection with his complaint against a trader it had approved under its ‘Buy with Confidence’ scheme.
The Ombudsman’s role and powers
- We investigate complaints about ‘maladministration’ and ‘service failure’. In this statement, I have used the word fault to refer to these. We must also consider whether any fault has had an adverse impact on the person making the complaint. I refer to this as ‘injustice’. If there has been fault which has caused an injustice, we may suggest a remedy. (Local Government Act 1974, sections 26(1) and 26A(1), as amended)
- If we are satisfied with a council’s actions or proposed actions, we can complete our investigation and issue a decision statement. (Local Government Act 1974, section 30(1B) and 34H(i), as amended)
How I considered this complaint
- I considered all the information provided by Mr B about his complaint. I made written enquiries of the Council and took account of the information it provided in response.
- I provided Mr B and the Council with a draft of this decision and considered all comments received in response. I then made limited further enquiries of the Council.
What I found
- BWC is a national register of businesses vetted, approved and monitored by council trading standards officers to try to ensure that they operate in a legal, honest and fair way. The Council takes part in this scheme. Its website explains that while it cannot guarantee the businesses which subscribe to the scheme will never let a customer down, if this happens trading standards will offer support.
- Mr B engaged a builder to build a basement at his property. The builder he selected was registered with the BWC scheme. The work was finished around January 2013 but subsequently there was water ingress and the basement began to develop mould. Mr B tried unsuccessfully to work with the builder to get these problems resolved. The builder had offered a ten-year guarantee on his work, but by late 2014 the matter was not resolved and Mr B asked the builder for a refund.
Trading standards become involved in Mr B’s case
- In December 2014 the builder who had carried out the work at Mr B’s home contacted Trading Standards (TS) to say he had had complaint from Mr B. TS then called Mr B to talk to him about what had happened. As the builder was a member of the BWC the Council was able to offer mediation. Mr B and the builder agreed to a joint independent investigation of the work prior to the mediation meeting.
- The mediation meeting was facilitated by two officers from TS. I will return to this point later in this statement.
- A chartered surveyor had completed an independent report, with the agreement of both parties. The builder was unable to confirm he had taken the necessary steps to ensure the effectiveness of the tanking product he had used. The surveyor’s report concluded the water ingress and failure of the basement was a direct result of the builder using inappropriate construction details for the water proofing tanking system he had chosen. The surveyor considered both parties had been slightly naïve in their approach to the works: no architect had been involved. To remedy the water ingress, the only option would be stripping out the basement including removing stairs and any fixtures, followed by installation of a suitable tanking system by an approved fitter.
- The cheapest quotation for the necessary works to rectify the cellar was about £8,000. The notes from the mediation meeting record that while the builder agreed the basement needed to be stripped out, he reported he had suffered financial loss of £5,500 due to loss of profit from the original works, the costs of attempts made at repair, and the survey. The builder therefore offered to pay Mr B a settlement sum £4,000 to cover the cost of stripping the cellar and preparing it for damp-proofing.
- Mr B said he wished to consider the offer and he then initially accepted it. However when the builder sent the cheque he also sent a letter which imposed conditions on the settlement. Mr B considered the conditions meant the payment was not solely for what had been specified at mediation but also covered costs of possible future defects in the side extension the builder had constructed, effectively cancelling the 10 year guarantee on the works. Mr B consulted his solicitor and advised the Council the terms were unacceptable.
- Mr B asked TS to comment on the letter the builder had sent him. The Council said it had played no part in the drawing up of the conditions the builder was seeking to impose but it was prepared to suggest that the builder clarify the terms if Mr B wished it to do so. However it advised that if agreement between the parties could not be reached, the remaining option would be civil action.
- Mr B took the builder to the county court. The court made a judgment in Mr B’s favour, requiring the builder to pay him a greater sum of money than he had offered at mediation.
- The builder is no longer a member of the BWC. He failed to pay the county court judgment against him and so no longer satisfied the conditions for membership of the scheme.
What happened next
- Mr B complained to the Council about its role in what had happened. Responding, the Council advised Mr B that TS had only become involved because the builder was a member of its BWC scheme. Membership offers benefits to members such as advice and assistance and mediation and the builder in this case had asked for help and advice from the Council as he was entitled to do.
- Regarding the conditions the builder had attached to the settlement proposal, the Council said the builder’s letter referred to the basement project (thus excluding issues relating to the extension works) and indicated that he could not be held liable for any remedial works done by a third party. When responding to Mr B’s complaint later, the Council told him the builder had sought its advice about whether the letter was acceptable in legal terms, and said he had been required to seek advice due to his membership of the BWC scheme. In fact what happened was that the builder had sent the Council a copy of the offer letter he proposed to send to Mr B and had asked for its views. The Council has no record of any advice provided to the builder in response. If it gave advice and did not record it, that was fault in record keeping. If it did not give any advice, it was fault to tell Mr B it had done so. It was also fault to tell Mr B the builder had been required to seek advice because of his membership of the scheme when there was no such requirement. However these faults did not lead to significant injustice for Mr B. It was always a matter for the builder to make his offer with whatever terms and conditions he wished to impose, and for Mr B to choose to accept or reject what was offered. It was not for the Council to say what either side should do, and there is no evidence that it did so.
- The mediation offered by the Council under the BWC scheme is not a legally binding arbitration service. So ultimately in cases of dispute it will be for the court to decide where responsibility lies. The Council was not obliged to offer mediation but in seeking to provide this it was trying to assist the parties in reaching agreement. The Council’s aim was not been to identify the cause of the issues, nor to apportion blame, but to seek to reach agreement in respect of a compensation payment. The Council made clear mediation was not binding on either party, and when agreement could not be reached, Mr B was able to take legal proceedings. Ultimately this did not provide the outcome he had hoped for but that was not the fault of the Council.
- However, there was fault in the mediation process, which the Council has acknowledged. When Mr B arrived for the mediation meeting he saw the TS officer involved in the mediation talking to the builder. In its consideration of what had happened the Council acknowledged Mr B may have suffered a loss of confidence in the process, since they may have been thought to be talking about the case. The Council accepted that the mediation meeting had not been carried out by a trained mediator. It has since taken steps to employ a trained mediator, and they will be supported at such mediation meetings by a TS officer who has no prior knowledge of the case under review.
- The Council has confirmed this was the first case where a BWC member had requested that the TS team provide mediation to help resolve an issue, as they may do under the terms of the scheme. The evidence shows the Council was trying to assist with achieving resolution via mediation, but it was not properly equipped to do so. That was fault. While on balance I am satisfied that the fault did not lead to Mr B being given incorrect advice about his options, it did cause him a loss of faith in the process and concern that the Council was biased in favour of the builder.
- Regarding membership of the BWC scheme, before membership is agreed the Council carries out a number of checks. These include checks with Companies House, with credit agencies, and with the Disclosure and Barring Service (formerly the Criminal Records Bureau). Complaint history is reviewed and references are required from customers. The builder employed by Mr B had applied to the Council to join the scheme in 2009 and all relevant checks were made. The builder was accepted onto the scheme. In accordance with the terms and conditions of membership, the Council conducted re-audits periodically. In this case the Council’s records include re-audit forms from 2012, 2014 and 2015. The records from 2014 and 2015 are incomplete and this failure in record-keeping was fault. But I cannot conclude that fault led to significant injustice to Mr B.
- Mr B considers the Council was indifferent to his complaint because it was the first the Council had received against this builder. The Council has confirmed that Mr B’s complaint was the first it had received against the builder, but the Council’s actions do not evidence indifference.
- Mr B takes the view that the builder lacked the appropriate skills, knowledge and expertise to fulfil the requirements of the contract and ought not to have accepted it. But it is not the Council’s role to micro-manage the workload of traders, and failure by the builder is not evidence of a lack of due diligence by the Council. The builder continued to meet the conditions of membership of the BWC scheme until he failed to comply with the county court judgment.
- Mr B also has concerns about the terms and conditions of the builder’s contract, in particular a clause which states that any dispute arising from the works is to be referred (by either party) to a person nominated by the President of Arbitrators, whose decision will be final and binding upon both parties. Mr B considers this clause meant he could not use mediation or court proceedings. It was of course matter for Mr B whether he chose to enter into the contract with the builder, accepting its terms and conditions, and whether the wanted to seek arbitration as set out in the contract. But in any event he was not precluded from participating in the mediation offered by the Council and he subsequently took legal proceedings.
- In recognition of the loss of faith caused to Mr B by the failings in the mediation process described above I recommended that within four weeks of the date of the decision on this complaint the Council issues him with a formal written apology. The Council has agreed with my recommendation.
- I commend the action the Council has already taken to improve the mediation service it offers under the BWC scheme, set out at paragraph 19 above.
- The Council has also confirmed that in 2016 it reviewed the administration of the BWC scheme and appointed a new officer with responsibility for delivery of the scheme, leading to procedural improvements. The Council has undertaken to ensure all self-assessment review forms will be signed off by the officer. I therefore made no further recommendation in respect of the fault in record keeping identified by my investigation.
- The action agreed above will provide a suitable remedy for this complaint.
Investigator's decision on behalf of the Ombudsman