As part of the Government’s programme of reforming consumer law, on 1st October 2015 the Consumer Rights Act 2015 came into force consolidating and reforming consumer law and UK consumer rights.
The UK’s historical consumer protection regime has often been criticised for being complex, inaccessible and obstructive for consumers trying to enforce their rights against traders. Some of the key aims of the Consumer Rights Act are therefore: –
- To consolidate key consumer rights in a single place.
- To make the legislation easy to read and understand
- To update the consumer protection regime for the digital age.
- To enhance measures to protect consumers (including the enhancement of the restrictions on unfair terms in consumer contracts).
While the Consumer Rights Act reflects previous consumer law to an extent, it does have wide-ranging implications for businesses who supply goods and services to consumers. The Consumer Rights Act also introduces a whole new regulatory framework for the supply of digital content which is outside the scope of this article.
One particular point of note is that the Consumer Rights Act defines a consumer as “an individual acting for purposes which are wholly or mainly outside that individual’s trade, business, craft or profession”. While this clarifies a previously confusing point namely by confirming that a company, LLP or other corporate entity can never be a consumer, it does however widen the scope of who may be a consumer to include professional individuals who buy goods/services for both home and personal use. Therefore, someone you consider to be a business customer may actually be deemed to be a consumer and therefore enjoy the associated enhanced consumer rights.
Perhaps one of the most significant changes brought about by the Consumer Rights Act is the introduction of enhanced and tiered consumer remedies in respect of the non-conformity of goods or services.
The enhanced consumer rights and remedies depend on the type of non-conformity and whether the non-conformity relates to the provision of goods or services as summarised below.
As per the previous law, under the Consumer Rights Act goods must be of satisfactory quality, fit for purpose, match their description and match any sample which has been given. The Consumer Rights Act also introduces a new requirement that goods must match a model seen or examined by the consumer and so care should therefore be taken if displaying and exhibiting goods to ensure they correlate with the goods actually sold.
If goods supplied to a consumer do not conform with these rules: –
- The consumer will have up to 30 days from delivery/transfer to reject the non-conforming goods and claim a full refund (which cannot be reduced for use of the goods by the consumer). This is known as the short-time right to reject. If goods are perishable then the right to reject lasts for the expected life of the product. As an alternative, a consumer can agree to a repair or replacement during this 30-day period (but cannot be forced to do so).
- After the 30-day right to reject period has expired, the consumer will have the right to a repair or replacement at the trader’s cost. It’s important to note that traders only get one opportunity to repair or replace a non-conforming product.
- If after repair or replacement the goods are still non-conforming (or repair or replacement is not possible), the consumer will be entitled to a final right to reject or price reduction. Only where goods are rejected after 6 months from when they were supplied is the trader able to make any sort of deduction for use of the goods.
As with the previous consumer law, services must be provided with reasonable care and skill. The Consumer Rights Act also makes any pre-contractual information given by the trader a term of the contract where the consumer has used that information in deciding to engage the trader. As a result, spoken or written statements given by a trader can be deemed to be terms of the contract and so care must be taken in any marketing material and discussions to make sure the consumer is not misled in any way.
Under the Consumer Rights Act, non-conforming services are services that are: –
- Not performed with reasonable skill and care.
- Not performed in line with information given about the service by the trader.
- Not performed in a reasonable timeframe where the timescales are not fixed/agreed.
A consumer can require the trader to re-perform the non-conforming services (or any part of them). Any such re-performance of services has to be undertaken within a reasonable timeframe, without significant disruption and at the trader’s expense. If repeat performance is not possible the consumer is entitled to a price reduction.
Consumers can claim a price reduction for non-conforming services where: –
- Services have not been performed within a reasonable timescale (where the timescale was not fixed).
- It is impossible to re-perform the service.
- The consumer requested that the services be re-performed but they have not been re-performed within a reasonable timeframe or without significant disruption.
- The services are not provided in accordance with the information given by the trader.
Rather unhelpfully, where the consumer is entitled to a price reduction for non-conforming services, there is no prescribed calculation but simply has to be by an appropriate amount. No doubt the determination of any price reductions will be hotly contested.
Consumer Rights Act 2015 – Practical steps to consider
If your business provides goods or services to consumers then there are practical steps you can take to ensure compliance with the Consumer Rights Act and mitigate exposure to additional liability including: –
- Review your terms and conditions to ensure that they: –
- Conform with the new enhanced consumer remedies for non-conforming goods and services.
- Conform with the new fairness test introduced by the Consumer Rights Act.
- Review and adjust if necessary your internal business processes and procedures to ensure that they comply with the new consumer remedies so that requests for refunds, repairs and replacements can be dealt with properly.
- Review all information and marketing material provided to consumers to ensure that any description or information given about goods and services is accurate.
The Consumer Rights Act is one of a number of key pieces of legislation which have been introduced in the last couple of years relating to consumer rights. If your terms and conditions have not been reviewed and updated for a number of years then you should have them revisited especially if you sell remotely to consumers (for instance by website or telephone) to minimise your exposure to potential liability and future claims.
If you would like to discuss compliance with the Consumer Rights Act 2015, please call Alex Clifton on 0116 289 7000.