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The customer is always right..?

Apr 5, 2018

The Consumer Rights Act 2015 (“the Act”) which came into force on 1 October 2015 has been billed as the biggest overhaul of consumer rights in a generation.

The Act consolidated eight pre-existing pieces of legislation, including rules in relation to consumer rights and remedies in respect of goods, services and digital content, and unfair terms in consumer contracts and consumer notices. The Act forms a major part of the government’s reform of UK consumer law.

A large proportion of the Act is based upon pre-existing laws and largely updated and clarified existing law.  However, there are some new areas of law which the Act introduced which will impact upon how businesses deal with consumers.

Definitions within the Consumer Rights Act 2015

A “consumer” is defined in the Act as “an individual acting for purposes that are wholly or mainly outside of that individual’s trade, business, craft or profession”. It is, therefore, likely that the Act will have an impact upon most businesses who sell to individuals.

With regards to the sale of goods, the goods being sold must, where appropriate, be of satisfactory quality, be fit for their required purpose, match the description sample or model, and be installed correctly.  If the trader fails to comply with these requirements then consumers have a range of remedies available to them.

The general remedy available to a consumer in respect of faulty goods is the short term right to reject the goods.  Consumers now have a 30-day period within which they can reject the goods and receive a full refund.  Within that same 30-day period consumers also have the right to ask for repair or replacement of the goods. Such repair or replacement will be at no cost to the consumer.  If the consumer elects for repair or replacement of the goods, the 30-day period is temporarily paused so that in the event that the repair or replacement is unsuccessful, the consumer has the remainder of the 30-day period within which to reject the goods or to ask for a reduction in price.  It appears that the right to ask for a reduction in price only arises once the consumer has asked for repair and the supplier has been unable to repair satisfactorily.

A consumer may also be entitled to compensation in respect of any losses incurred as a result of the trader supplying faulty goods under pre-existing rules on breach of contract damages.

There are exceptions to when these new remedies will available to a consumer. If the defect has been brought to the attention of the consumer by the trader before the sale, or the consumer has examined the goods and therefore should have noticed the defect himself, then a consumer cannot claim replacement, repair or compensation.  Similarly, a consumer cannot claim in respect of damage to the goods caused by him or the result of fair wear and tear, or if he changes his mind about the goods.

Under the Act, certain standards also apply in respect of the provision of services. A trader must carry out services under a contract with consumers with reasonable care and skill, that being the standard that would reasonably be expected of a competent person in that trade or profession. Where the trader has given the consumer oral or written information about the trader or the services upon which the consumer has relied, the consumer will be able to rely on that information and seek compensation if it turns out to be incorrect. If no price or timescale for supply is agreed the trader must provide the services at a reasonable cost and within a reasonable time.

If a trader breaches any of these standards then consumers now have two remedies available to them. They can request repeat performance of the services supplied in breach of the reasonable skill and care and information requirements, which shall be at no cost to the consumer and carried out within a reasonable time. If repeat performance is impossible or cannot be carried out within a reasonable time, then the consumer is entitled to an appropriate price reduction and in some circumstances this may be the full amount of the price.

There are again exceptions to these remedies. A consumer does not have the automatic right to instruct a third party to complete the work and then charge the original trader the full cost of this remedial work. The Act does, however, like general contract law, recognise that it may not be practicable for the original service provider to be used to remedy the defect and in those circumstances, a consumer can claim back the reasonable cost of the remedial work carried out by another trader.

Finally, a consumer cannot claim for the outcome of services falling short of a level that was not agreed between the parties at the outset unless that level was the consumer’s reasonable expectation. Neither can a consumer claim for any damage or problems caused by him, nor if he changes his mind, nor for fair wear and tear.

Digital Content

The Act is the first piece of legislation which specifically deals with the supply of digital content. The supply of digital content will be treated similarly to goods in that they must be of satisfactory quality, fit for purpose and comply with any description given. The supply of digital content will be regulated when it is supplied for a price, or supplied for free alongside goods and/or services which have been purchased, and would not generally be available to consumers otherwise.

Enforcement

In respect of the supply of goods and/or services and/or digital content, if a trader fails consistently to comply with the Act then certain enforcement bodies can seek an order of the court, and if the trader, or its managers fail to comply with the order then they could face a maximum penalty of an unlimited fine and two years’ imprisonment. In this connection it is important to note that the rules apply to any dealings with consumers, even if you usually only deal with trade customers.

If you are a trader and feel that your terms and conditions of business or the way in which you deal with consumers may need review in light of the Consumer Rights Act 2015, please contact Gemma on 023 8071 7466 or gemmabriance@warnergoodman.co.uk.

If you are an individual and need advice on whether your statutory rights have been infringed, please contact Daniel Coleman on 023 8071 7487 or danielcoleman@warnergoodman.co.uk.

ENDS

This is for information purposes only and is no substitute for, and should not be interpreted as, legal advice.