The Consumer Rights Bill tackles inconsistent consumer legislation by putting in one place the law on consumer contracts for goods, digital content and services.

The Consumer Rights Bill was introduced in the House of Commons on 23 January 2014 and is making rapid progress though the legislative process.

The Bill has two aspects - consumer protection and competition policy.  It will apply to all consumer contracts for goods, digital content and services. Consumers should find it easier to claim compensation for anti-competitive practices and the new Competition and Markets Authority (CMA) will be given powers to tackle unfair practices.

For consumers the Bill represents a vast improvement.  Written in clear English, it avoids the legalistic language of earlier legislation, which should make it more accessible to consumers. It tackles the problem of overlapping and inconsistent consumer legislation by putting in one place the law on consumer contracts. Until now the law on consumer contracts was spread across a baffling array of legislation, mainly:

  • Supply of Goods (Implied Terms) Act 1973
  • Sale of Goods Act 1979
  • Supply of Goods and Services Act 1982
  • Sale and Supply of Goods Act 1994
  • Sale and Supply of Goods to Consumers Regulations 2002
  • Unfair Contract Terms Act 1977
  • Unfair Terms in Consumer Contracts Regulations 1999
  • Unfair Terms in Consumer Contracts (Amendment) Regulations 2001
  • Competition Act 1998

However, the original plan to include for the EU Consumer Rights Directive (CRD) in the UK's Consumer Right Bill was abandoned. The Directive required national legislation by 13 December 2013 and for it to be in force by 13 June 2014, so there was not time. Although some provisions were implemented early by the Consumer Rights (Payment Surcharges) Regulations 2012, most was done by the Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013.  To ensure all the legislation is accessible to consumers in one place, some of the Regulations will be repealed and replaced in the Consumer Rights Bill.

What does the Bill do?

Goods: In addition to the usual terms on quality, description and fitness for purpose, the Bill clarifies that the consumer has 30 days in which to inspect goods and require faulty goods to be repaired or replaced.  If a repair does not fix the problem the first time the consumer can seek a refund.

Digital content: The Bill applies to digital content including downloadable content, computer games and apps. Digital content must also be of satisfactory quality and be fit for purpose. If it is defective the consumer has a right to have it repaired, replaced or receive a price reduction.

The consumer can make a claim if content bought causes damage to a device or other digital content, which could have been prevented if the trader has exercised reasonable care. What may be difficult for the consumer is proving that the trader failed to take reasonable care. Also, many of contracts will be low value and may not justify the time and expense involved in bringing a negligence claim.

Services: The Bill requires services to be performed with reasonable care and skill and for a reasonable price to be paid for services and no more.

Unfair terms in consumer contracts: The Bill consolidates the law on unfair terms in consumer contracts.  A term is unfair if it puts the consumer at a disadvantage.  Examples of unfair terms are set out in of Schedule 2 of the Bill. This is a long list so that consumers can find out for themselves what might be unfair; it will also give guidance to judges who now have a duty to consider whether a term is unfair or not. 

All terms must be transparent, legible (the end of small print!) and in plain and intelligible language.

Investigatory powers and enforcement:- As well as consolidating the law, it introduces new powers for public enforces to allow Trading Standards to work across local authority boundaries.

Comment

Consumer contracts will always be assessed for fairness.  Under the Bill, the court will have a duty to consider fairness even if the consumer has not raised this in the complaint.

As traders cannot contract out of the remedies provided to the consumer under the Bill, we recommend that standard terms of business should be reviewed to ensure that consumer terms comply and that training is given to staff so that they understand the new rules.