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 - noting that there is a risk that telcos may be exposed to frivolous claims.

In a consultation paper released last Wednesday, the Infocomm Media Development Authority (IMDA) 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, noting that the formal ruling should be binding.

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

She and others said that countries with similar processes could offer a guide on how abuse can be minimised. Ms Tang 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.

These recommendations add to a safeguard the IMDA proposed - that the ADR operator could refuse to deal with a dispute that is "frivolous or vexatious". Britain's two existing ADR schemes for settling telco disputes have the same safeguard.

"Last November (2017), British regulator Ofcom said the current safeguards do their job but it agreed to monitor if there is a need to strengthen the rules for refusing vexatious complaints. We haven't heard the last word about this yet," said lawyer Jan Willem van den Bos, a partner at Dentons in Britain.

Overall, many agree the ADR scheme will serve the public good.

"The eccentricities of a few (vexatious customers) must not detract the policy decision-makers from serving the needs of a wider population," said lawyer Nandakumar Renganathan, a partner at RHTLaw Taylor Wessing.

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

The Small Claims Tribunal, for one, 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.

"Current resolution avenues available to customers are adequate," an M1 spokesman said.

A version of this article appeared in the print edition of The Straits Times on January 22, 2018, with the headline 'New way to settle telco disputes: Safeguards needed to prevent abuse'. Print Edition | Subscribe