If true, it’s our view that AviationADR would have been breaking the law for failing to keep its records up-to-date, or alert the government of the change in ownership.
However, the adjudicator claims the entry on Companies House was made in error without its knowledge. Following the challenge from Which? Travel, it has updated its accounts again to state that it is not controlled by any other company.
Still, questions remain over the accuracy of the accounts. One Russian financier, who provided the scheme with an indirect loan of £500,000 in 2015, is still described on his Facebook page as a director of AviationADR - although he isn’t mentioned on AviationADR’s own website.
Which? has long called for an independent ombudsman in aviation, with effective oversight by the regulator, so that travellers who’ve been poorly treated by their airline can get the recompense they deserve.
What is an ADR scheme?
Since 2016, passengers fighting their airline for flight delay compensation have been able to use ADR - ‘alternative dispute resolution’ instead of taking costly court action.
AviationADR - formerly The Retail Ombudsman - is the largest of the dispute resolution schemes, used by thousands of UK passengers. It is authorised by regulator the Civil Aviation Authority (CAA) and its parent company has been audited by the Chartered Trading Standards Institute (CTSI).
Confusion about how many people worked for AviationADR
On top of confusion about its ownership, AviationADR has also been muddled about how many employees it had.
All private limited or public UK companies have to publish accounts on the government’s Companies House website, along with regular updates. These include details of ‘beneficial owners’ and also number of employees.
AviationADR is operated by a firm called Consumer Dispute Resolution Limited (CDRL). CDRL’s accounts for 2017 state that it only had two employees that year and two the previous year.
If true, it would make it difficult to see how it was able to run an adjudication scheme. It also contradicts 2016’s accounts statement that claims it had 43 employees the same year.
We contacted CDRL (see below), but it did not provide an explanation for this discrepancy.
What is CDRL?
CDRL is the not-for-profit company that set up The Retail Ombudsman in 2015.
It didn’t have the legal right to use the term ‘ombudsman’ at the time, but it was approved by the CAA to run the dispute resolution scheme for airlines.
In 2016 it became an official, legally approved ‘ombudsman’ by joining the Ombudsman Association - but left a year later.
The Ombudsman Association later issued a statement saying that The Retail Ombudsman ‘did not meet the OA’s membership criteria for independence, fairness, effectiveness, openness and transparency, and accountability’.
It rebranded as RetailADR for complaints about shops and AviationADR for complaints about airlines. ADR stands for ‘Alternative Dispute Resolution’.
It’s still authorised by the CAA to provide binding resolutions to airline complaints, particularly those relating to delays, cancellations and denied boarding. Twenty two airlines are now members, including easyJet, Ryanair, Virgin Atlantic, Tui and Wizz Air.
In 2018 it also became involved in ABTA’s holiday complaint adjudication scheme.
What is DDRT?
Its website says that DDRT provides software, data processing and consumer law support to some of the biggest brands in the UK - including AviationADR.
DDRT was set up in the same year as CDRL by the same directors - consumer lawyer and Daily Mail columnist Dean Dunham and his business partner Robin Tucker.
Both have since ceased being directors. The current directors are a former executive from one of Russia’s state-owned banks, Evgeny Novikov; Russian-Croatian investor Danilo Lacmanovic; and 81-year-old businessman John Seaton - who is also a director of CDRL.
What is the relationship between DDRT and AviationADR?
When The Retail Ombudsman launched in 2015, it stated on its website that it was funded by a £500,000 loan from DDRT, which had since been repaid.
DDRT had itself been loaned £500,000 by Evgeny Novikov, via another of his firms.
Evgeny Novikov was listed as part of an advisory board to The Retail Ombudsman, when it applied to the CAA to run its adjudication scheme in 2015. His Facebook page describes him as a director at DDRT and AviationADR.
More confusion over who operates AviationADR
Until recently an article on AviationADR’s EU website described AviationADR as being ‘part of DDRT’.
AviationADR told us that this was ‘clearly a typo’ and it has since amended the article to describe AviationADR as ‘part of CDRL’.
AviationADR and DDRT share the same building in Milton Keynes and it was described on a property website as being leased to ‘DDRT T/A The Retail Ombudsman’ - (DDRT ‘trading as’ The Retail Ombudsman).
It was also listed as ‘DDRT The Retail Ombudsman’ on VAT listing website VAT look-up.
CDRL response
CDRL forwarded us a letter from its accountants, who admitted making the errors on CDRL’s Companies House page.
When we asked its accountants, Harris and Co, how this happened, it told us that it could not comment because of rules on client confidentiality.
CDRL told us: ‘DDRT was originally incorporated to be the trading vehicle for The Retail Ombudsman. . . However, it was later decided to operate the ADR schemes via a “not for profit” entity (CDRL), leaving DDRT simply as a software development business and supplier to CDRL.
‘DDRT should therefore not be described as “t/a The Retail Ombudsman” and we have written to DDRT and asked for the records you have highlighted to be amended. CDRL is its own legal entity controlled and run solely by its board of directors. Beyond licensing software from DDRT, CDRL has no other legal connection to it.’
When Which? interviewed CDRL and DDRT director Dean Dunham in 2018 he told us that DDRT had never been intended to run its adjudication scheme, and was always purely involved in creating its software.
Civil Aviation Authority response
The CAA is the regulator for AviationADR and audited it when it applied to be an adjudication scheme.
We asked it whether there is any obligation on ADR schemes that it regulates to have transparent, accurate accounts but it didn’t respond except to say:
‘We do not comment on the corporate structure or financial situation of individual businesses’.
CTSI response
The CTSI (Chartered Trading Standards Institute), which is the regulator for the RetailADR scheme, told us that it audits CDRL every two years and last did this in 2021. It said that a review is scheduled in the coming months and that it would discuss our findings with the firm then.
It also said that it was appealing to the government to be given more powers to regulate dispute resolution schemes.
It said: ‘Competent bodies should have a greater range of sanctions available to help monitor the performance of ADR bodies. CTSI is currently very restricted by the law and we would like to see changes in future ADR reform.’
Which? calls for independent travel ombudsman
Eight years on, we are still reporting issues with AviationADR to the CAA - but it is yet to take any action.
source https://www.which.co.uk/news/article/who-owns-aviationadr-easyjet-and-ryanair-complaints-scheme-denies-russian-connection-ay2vR8D42FnB