The Consumer Rights Act 2015

The Consumer Rights Act 2015 ("CRA15") is now in force,  regulating business to consumer contracts and notices across the UK.  It also makes significant reforms to the rules for bringing competition claims in the UK.  The CRA15 consolidates many existing rules, but also makes some significant changes:

  • Enhanced basic remedies: These include a fundamental consumer right to reject and claim a refund for faulty items or compensation up to the price for poorly performed services. There will be reduced scope for retailers to correct a problem before the consumer can claim a refund or compensation. This change may be more significant for high value consumer items than for low value goods which are already often replaced rather than repaired;
  • Digital content: This category of product, including  e-books, apps, music downloaded or a film streamed over the internet; or software, music or a film on a disk,  is brought fully within the scope of consumer law. This will increase certainty that consumer rights apply to digital content but the precise rules will depend on the individual context;
  • Enhanced consumer protection against unfair terms and notices: All written terms, even for complex products like financial services or life sciences, must be legible and in plain and intelligible language ("transparent") and will be subject to the fairness test, unless they are the "core" terms which relate to the main subject matter of the contract, or set the price, and are both transparent and given appropriate prominence. Even oral terms will now be interpreted in favour of the consumer if there is any ambiguity, which may drive increased scripting for telephone and front of house staff;
  • Reinforcement of consumer protection principles: The CRA15 reinforces existing principles but also introduces changes. Although the CRA15 contains some ambiguities, some of these changes have the potential to significantly increase the exposure of businesses dealing with consumers.  There are also some areas of uncertainty in the current version of the CRA15 around the extent to which businesses can exclude or limit their liability to consumers and potentially questions current risk management and insurance approaches;
  • Other key consumers laws which survive include: The Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013, which give consumers rights to pre-contract information and a right to cancel off-premises or distance contracts; the Consumer Rights (Payment Surcharges) Regulations 2012, which ban excessive payment surcharges; and some sections of the Sale of Goods Act 1979 will also still apply to consumers after 1 October 2015.  In addition, the old rules continue to apply to contracts which pre-date 1 October 2015; and
  • Encouraging UK competition litigation: introducing US-style class actions; a new fast-track procedure; and enhanced powers for the Competition Appeal Tribunal to stimulate claims by consumers and SMEs. The impact will likely be felt in particular by businesses that are dominant in their market or that are consumer-facing, which now face the reality of opt-out consumer class actions for the first time