The draft Consumer Rights Bill (which contains proposals for sweeping reforms to UK consumer laws) has been highlighted again recently with the Trading Standards Institute publishing its comments on the draft Bill to the Business Innovation and Skills Commons Select Committee. The draft Bill is aimed at clarifying and simplifying consumer rights.
The existing framework for UK consumer law is contained in over 100 pieces of legislation, such as the Distance Selling Regulations, the Sale of Goods Act, Unfair Contract Terms Act and the Consumer Protection from Unfair Trading Regulations. It is widely considered unnecessarily complex, ambiguous and inconsistent in places (for example, as between contracts for goods and contracts for services) and out of date in relation to technological developments (for example around digital content). The government hopes that the proposed Bill will modernise consumer law, creating a better compliance framework for businesses and enhancing the rights of consumers of goods and services.
Key provisions of the draft Bill are:
- An early right to reject: consumers will have the right to a full refund if they return faulty goods within 30 days;
- A two-tiered remedial scheme and a final right to reject (not limited to 30 days): as a first tier of remedy consumers have the right to repair or to a replacement of faulty goods. The trader will have one opportunity to repair or replace faulty goods before moving to the next 'tier' of remedy. The second tier applies if repair or replacement is impossible, or the trader's one attempt to repair fails, or the first replacement is also defective. In any of these scenarios, the consumer is entitled to a price reduction or a final right to reject;
- A right to a repair or replacement of faulty digital content (including music downloads, e-books and online games). Also digital content must comply with certain standards, such as satisfactory quality, fitness for purpose and compliance with description;
- An implied term that the trader has a right to provide digital content to a consumer;
- A right to seek compensation if digital content causes damage to a device or other digital content owned by the consumer;
- A right to request a repeat performance of a defective service, or if not possible or not done within a reasonable time, the right to a price reduction;
- An implied term that the trader must perform services with reasonable skill and care, the consumer must pay a reasonable price and the trader must perform the services within a reasonable time;
- All written terms of a consumer contract must be transparent;
- Pre-contractual information about main characteristics of goods, and any information said or written to the consumer by the trader about the trader or a service, which the consumer takes into account when deciding to enter the contract or make a decision about the service after the contract, will be treated as part of the contract;
- Enhanced enforcement powers: Trading Standards will remain the key enforcer of the legislation with enhanced investigatory, redress and compliance powers. The draft Bill contains the need for Trading Standards to give at least two days' notice of routine inspections except in certain circumstances. This is the focus of Trading Standard's recently published response. Trading Standards consider that this would allow traders the opportunity to remove illicit goods or materials; and
- Consumer rights to take collective action for anti-competitive behaviour.
Businesses should be aware of and prepare for this new consumer legislation by ensuring their term and conditions as well as their complaints procedures, and processes relating to pre-contractual information and all customer communications, comply with the proposed legislation. Businesses should also prepare for the possibility of additional costs arising from the cost of repairing/replacing goods, repeating services and providing refunds or price reductions as a consequence of the two tier remedial scheme.