This has been set up by the CAA. Their plan is that this will be the future of 261/2004 claims in the UK, although they are having trouble getting airlines signed up.

The scheme draws on others already running in other sectors - in particular the FOS for financial services. Like the FOS:

• Complaints must be made to the airline in the first instance.
• Customers can then seek adjudication with CEDR.
• Proceedings are paper-based and informal.
• The result binds the airline if the customer accepts it, but if the customer doesn't like it he or she can go to court.
• The scheme is funded by the airlines (I think chiefly on a per-case fee).
• The scheme is overseen by the regulator.

The £25 fee for wholly unsuccessful complaints is interesting: the FCA certainly wouldn't allow that! It also looks like CEDR will attempt to apply the law: by contrast FOS is free to disregard the law (albeit that in practice it only ever does so to the benefit of consumers).

The CEDR is a well-known in the ADR space (e.g. they train mediators), and I don't think their independence should be in question. I think this is their first foray into work with consumers, though. That may show in the design of the website, which isn't as easy to use as it might be.

I don't think it's suspicious that BA CR recommended the scheme: I expect we'll see this in every case going forwards. It seems to be part of the scheme that the airlines will issue final response letters mentioning the ability for the consumer to seek CEDR adjudication.