We understand the environment you operate in and the unique challenges you face.
Towards a Consumer Bill of Rights – Clarification of Your Rights
A review of the law has found that it is difficult for consumers to identify their rights in relation to the purchase of goods and services. This is hardly surprising given that the legislation identifying consumer rights is spread across 12 different statutes and regulations, all with varying degrees of protection. Further, the present law is out of date and makes no provision for digital content or the recent EU Consumer Rights Directive. In order to clarify, modernise and consolidate the law, the Government proposes introducing a Consumer Bill of Rights, making it simpler for consumers to locate their rights and insist that they be enforced.
Rights when purchasing goods
The current protection for consumers purchasing goods is set out in seven implied terms, which ensure that consumers get what they pay for and have recourse against the seller where goods do not comply with their description or are faulty. It is not possible for the seller to contract out of the implied terms.
The government is of the view that the current level of protection provided is high, but that consumers find the implied terms confusing, not least because the available remedies vary depending on the type of sale (hire purchase and/or conditional sale). As a result, the government proposes introducing a number of statutory guarantees which will, among other things, set out a clear time limit on the right to reject substandard or faulty goods for a full refund (30 days), clarify the number of times that faulty goods may be repaired or replaced and unify the remedies available so that they are consistent across all types of contract.
The Consumer Bill of Rights will also implement the EU Consumer Rights Directive, which requires a seller to provide a consumer with information about the goods prior to a sale, including the nature and main characteristics of the goods, the price and the name and address of the seller. The seller must also deliver the goods within 30 days of the sale, a higher level of protection than the current law, which simply requires delivery within a reasonable time.
Rights when purchasing services
The law presently provides only that services must be provided with “reasonable care and skill” and it is possible for a provider of services to limit its liability. In order to establish that services were NOT provided with reasonable care and skill, a consumer would need to show that the services were provided negligently, which necessarily requires the involvement of the Courts. There are no specific remedies available for a consumer who has received poor service – they are reliant on the basic law of contract/tort. Further, the consumer is not entitled to terminate the contract and there is no requirement on the service provider to “make things right”. The consumer’s only real remedy is in damages.
It is proposed that the Consumer Bill of Rights will apply only to services provided by contract and then, only in the course of business, where services are exchanged for something of value. The Consumer Bill of Rights will replace the implied term that services must be provided with “reasonable care and skill” with a statutory guarantee and clear remedies for breach of the guarantee. For example, the service provider will be required to repair, provide the service again or provide a discount. Further, the service provider will not be entitled to limit their liability in relation to the above statutory remedies.
Rights when purchasing digital content
It is hardly surprising that the present consumer legislation does not make any provision for digital content, particularly given that the most recent legislation dates back some 30 years. As a result, the purchase of digital content such as music, software and the like is surrounded with a degree of uncertainty as to how a consumer might be compensated if the digital content is “faulty”.
The government proposes introducing a bespoke regime for the protection of consumers purchasing digital content. The Consumer Bill of Rights will contain the following “rights”:
– the seller must have title to (or own the rights to) the digital content;
– the digital content must meet the description provided;
– the content must be of satisfactory quality, in that it meets the consumer’s expectations in terms of quality and fitness for purpose;
– the digital content must match the trial or demonstration version.
In terms of remedies, it is proposed that faulty or substandard digital content must be repaired or replaced. If this is not possible or causes significant inconvenience to the consumer, the price should be discounted, or refunded in full. These remedies are intended to be available for 6 years from the date of purchase (in circumstances where the fault was in fact present at the time of purchase, but not immediately visible).
The government has sought comment from the public in relation to the suggested Consumer Bill of Rights and the results of the consultation are expected shortly. We will provide you with further information regarding the Consumer Bill of Rights following publication of the consultation response.