From episode: 19. Travel Arbitration. With Marcus Rutherford
the most sort of highly asked questions that we get is what is arbitration? It's interesting because the traditional way of dealing with disputes over contracts or various claims is obviously to go to court but arbitration is a sort of private dispute resolution system so it allows people in dispute to avoid having to use the court system but still get a decision by an independent third party which is capable of being enforced by the courts. So it has the advantages of being a judicial type system, someone sitting there listening to both sides of the argument, but it's slightly more user -friendly, the cost can be less, and it can be quicker as well. So it's a useful way of privately resolving disputes. And in the context of the travel arbitration scheme, it's a documents only process which allows consumers to submit the documentation that they want the arbitrator to consider online or by post and means they don't have to go to court and stand in front of a judge and so on to go through the process. Yes and that helps bring the costs down because obviously if you're going through a court system and there's going to be a hearing in court before a judge, just getting people into court on the same day together is a costly process. If you can resolve disputes relating to contracts and simple disputes within the travel industry, if you can do that online by looking at documents and dealing with things in a modern electronic way, it dramatically reduces the costs for everybody involved. And let's look at costs now then because again people, it's a common ask question, how much does it cost? So there are two different elements to costing for consumers for using the scheme. For claims under seven and a half thousand pounds, which is by far the majority of claims that come under the scheme, the average claim value is somewhere between three and a half and four thousand. So for all of those claims the cost is 90 pound plus VAT, which is 108 pound. And for claims which are more than seven and a half thousand and under 25 ,000 and these tend to be big family holidays to big international resorts or cruises, you know worldwide cruises and things like that, the cost is 112 pound 50 plus VAT, which is 135 pound. So they compare very favorably to the costs associated with going to court, which can be significantly higher, especially once you've gone through the whole process of the court action. Yes and often in court people feel that they must have lawyers to help them through the process and the scheme is designed in a way to be simple enough for people to use on their own without lawyers. And of course one of the great benefits of the scheme is that if you make a claim and you win, you get more than the travel company has offered to settle the claim, you'll get your fee back.