The Consumer Rights Act came into force on 1 October 2015 and provides consumers with easy to understand rights and remedies when they are supplied with goods and services. The Act amends or repeals swathes of consumer legislation, introducing new rights and mechanisms to provide both the consumer and businesses with clarity about what they should do if a problem arises in the delivery of goods and services.

Scope of the Consumer Rights Act (CRA) 

The CRA will only apply to contracts entered into after 1 October 2015. It covers the following areas:

  • Consumer rights when goods or digital content is faulty, when a business is not acting in a competitive way and when services do not match expected standards (for example when services are not provided with reasonable care and skill).
  • Unfair terms in contracts. The protections under Unfair Contract Terms Act 1977 (UCTA) and the Unfair Terms in Consumer Contracts Regulations 1999 (UTCCR) have been combined under the CRA to produce one set of rules.
  • The need for written notice for routine inspections by public enforcers (such as Trading Standards) and more flexibility for public enforcers to seek redress for consumers and respond to breaches of consumer law.

Other legislation altered by the CRA includes: The Consumer Protection from Unfair Trading Regulations 2008, the Enterprise Act 2002, the Sale and Supply of Goods to Consumers Regulations 2002, the Supply of Goods (Implied Terms) Act 1973, The Sales of Goods Act 1979 and the Supply of Goods and Services Act 1982. 

New rights and remedies 

The key provisions introduced by the CRA include:

  • A consumer right to the repair or replacement of faulty digital content, such as online films, music downloads and games. All digital content must be of a satisfactory standard and fit for purpose as described.
  • Rules for what should happen if a service is not provided with reasonable care and skill or as agreed. A consumer will have a right to a ‘repeat performance’ if the service is sub-standard to the contract, or a price reduction.
  • A consumer right to challenge terms and conditions that appear to be unfair in a contract. Core terms, such as exclusion in insurance contracts, remain outside the assessment for fairness. However, if a term is not deemed transparent or prominent, it can be assessed for unfairness under the CRA. A term is deemed transparent if it is expressed in plain and intelligible language and prominent if it was brought to the consumer’s attention in such a way that an average consumer would be aware of it. Prominence is a new requirement.
  • A change to the window for returning faulty goods to 30 days (shorter period for perishable goods with a life expectancy less than 30 days). The good must be repaired or replaced within a reasonable time. Should it fail again, the consumer can claim compensation.
  • Anything mentioned to the consumer during the process of sale of the goods will become a term of the contract if the consumer relies on it to make a decision on purchasing it.
  • The option for consumers and small businesses to seek redress where a business has breached competition law.
  • The ability for consumers to bring collective actions before the Competition Appeals Tribunal (removing the need for consumers to bring private actions in the High Court) and for such claims to be brought on an ‘opt-out’ basis.

Checklist 

The main considerations for insurers and their insureds include reviewing their:

  • Digital content is fit for purpose.
  • Pre-contract information is up to date and accurate.
  • Terms and conditions do not attempt to limit or exclude a consumer’s statutory rights and remedies.
  • Written terms and conditions, as well as consumer notices, comply with the requirement for fairness.
  • Contract terms that set the price, or which describe the subject matter of the contract, are transparent and prominent.

Transport sector: applying an exemption 

The provisions of the CRA that apply to transport users are due to come into force on 6 April 2016. The new law and existing compensation arrangements overlap in certain areas, which poses the potential for confusion over which provision should apply. 

Therefore, the Department for Transport has published a consultation seeking views on the proposal to exempt the transport sector from certain provisions of the CRA. The underlying objective of the proposal is to ensure clarity for transport users and providers in the rail, air and maritime sectors, in a way that minimises costs for the industry, whilst leaving in place the package of remedies currently available to transport users. The proposed exemption (from section 57 CRA) relates to levels of liability for operators under the CRA in the event of disruption, such as delays or cancellation. The consultation will run until 30 November 2015.