90% of ADR cases resolved within 120 days, despite shift to video call, states HMRC

90% of cases referred to HMRC for Alternative Dispute Resolution (ADR) so far have been resolved within 120 days and 90% of cases were resolved with a positive outcome.

ADR mediation has  maintained a high success rate, despite a permanent shift from face-to-face to video call, HMRC representatives claimed in an update on Wednesday.

The mediators employed in HMRC’s Alternative Dispute Resolution (ADR) cases are all fully impartial and question both parties fairly throughout the cases’ entirety, according to Fiona McRobert, who leads the HMRC ADR team.

HMRC published a new manual regarding its approach to ADR in February 2023, expanding transparency to users in what cases are suitable for the service.

Situations ADR can be utilised for include when there is a dispute in facts and when communication has broken down between a customer and HRMC, plus many more scenarios.

ADR involves a HMRC mediator who works alongside the customer and the HMRC officer dealing with the case I question. They will help you both explore ways to resolve your dispute, including helping you:

• focus on the areas that need to be resolved
• re-establish communications, if needed

Speaking at the HMRC ADR Update: Current and Future webinar, McRobert says while ADR does require collaboration from all parties involved in a case, it is a helpful method of resolving a matter especially when tax tribunal disputes can take in the region of 72 weeks and upwards to be solved.

“ADR meetings are conducted expressly on equal terms, recognising the dispute as a shared issue which the parties have a shared interest in resolving.

“A third party is brought in with the agreement of both parties to facilitate a bilateral agreement,” says McRobert.

Additionally, McRobert states that “if you have a desire for an equitable, efficient, cost-effective outcome, that quite often is when ADR can really help.”

The ADR mediators

McRobert highlighted that HMRC currently employ approximately 30 mediators who have all completed stringent training.

Each year, mediators participate in a core professional development with an external body. McRobert says the training is on various mediation techniques, values, qualities, and the last one they completed entailed crisis negotiation.

This type of training should produce a good level of “governance and transparency,” she adds.

“Without prejudice”

The guidance says HMRC’s ADR mediator will come “without prejudice”, meaning that parties can explore many possible resolutions, and any discussions had will not impact the case or be seen as an admission.

The manual does say that any ‘tax fact’ (a fact which has legal and technical implications for a taxpayer’s liability) that is relayed in a meeting will not be treated with the same leniency.

The parties in dispute will always be in control of the decision to settle or not and can work on finding their own agreement rather than leaving the decision to a tribunal judge.

ADR meetings conducted by video chat

McRobert says that mediator meetings are normally conducted by video chat, and this enables HMRC to “provide the most effective, efficient service to the greatest number of customers within the resources we have available to us.”

While the process has shifted permanently from face-to-face meetings to video, HMRC claim the resolution rate has remained “consistently the same.”

HMRC will consider requests for face-to-face meetings but will view them on a case-by-case basis as their default preference is video meetings.