The Consumer Rights Act 2015: what does it mean for your business? The Issue
Commercial E-alert October 2015
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The Consumer Rights Act 2015 came into force on 1 October 2015, bringing about a number of important changes to consumer rights in the UK. Whilst much of the Act is concerned with consolidating the vast, somewhat unwieldy, and often conflicting, body of consumer legislation which has evolved over the last 100 years or so, there are nevertheless some significant new issues for businesses to be aware of when trading with consumers. Alex Meloy
The Changes
A new definition of “consumer” clarifies that a consumer can only ever be an individual “acting for purposes which are wholly or mainly outside that individual’s trade, business, craft or profession”. Whilst this now excludes companies and LLPs, who could previously fall within the definition when dealing outside their normal business activities, it does potentially extend consumer protection to sole traders who purchase goods for mixed personal and business use.
Consumers will now benefit from a new tiered system of remedies when purchasing goods which do not conform to the contract, for example if they are faulty, not as described or delivered late. A short-term 30-day right to reject (less if the goods are perishable) is followed by a right to a repair or replacement. If repair or replacement is impossible or not carried out within a reasonable time, the consumer can opt for a price reduction or may reject the goods altogether.
Consumers who purchase services which are not provided with reasonable care and skill, or which are not provided in the manner or within the time agreed, have the right to a repeat performance of the services. If repeat performance is impossible, or is not carried out within a reasonable time, the consumer is entitled to an appropriate price reduction.
Digital content is now specifically catered for as a separate category of goods, bringing consumer legislation into the 21st century. There are now tiered remedies available in respect of non-conforming digital goods, with consumers being entitled to repair or replacement in the first instance, followed by a price reduction and, in very limited circumstances, a right to reject.
There are new rules on unfair terms governing what liability traders can and cannot limit or exclude in their written terms. In particular, there is a new fairness test and a new “grey list” of terms which are considered potentially unfair.
Solicitor, IP & Commercial T: +44 (0)20 3755 5602 E: alex.meloy@howardkennedy.com
Guidance for businesses The Consumer Rights Act is intended to be a “one-stop shop” for consumer law, consolidating and clarifying existing legislation and making it easier for businesses to understand their obligations to their consumer customers. However there are pitfalls for the unwary. Businesses dealing with consumers online or on written terms will need to review their existing terms and conditions to ensure they comply with the new legislation, particularly in relation to the remedies offered and any exclusions or limitations of liability. Businesses should also consider whether their terms comply with certain other related regulations:
The Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013, which came into force in June 2014. Perhaps most importantly, the Regulations imposed a new obligation on traders to provide consumers with certain pre-contract information and a model cancellation form and granted consumers an improved 14-day right to cancel “distance” and “off-premises” contracts.
The Alternative Dispute Resolution for Consumer Disputes (Competent Authorities and Information) Regulations 2015, the remaining provisions of which come into force on 1 October 2015. The Regulations provide that, where a trader dealing with a consumer complaint exhausts its internal complaints handling procedure, the trader must provide the consumer with details of an appropriate Alternative Dispute Resolution (ADR) provider and state whether it is willing or obliged to submit to ADR to resolve the dispute. Traders who have a legal obligation to use an ADR provider, or who have otherwise committed to do so, must also provide the relevant information about that provider in their terms and conditions and, if they have one, on their website.
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