Draft Consumer Rights Bill Published

Draft Consumer Rights Bill Published

Published:

Author: Elisabeth Peene

The Draft Bill was published on 12 June 2013 and will represent the biggest overhaul of consumer law for decades.

It aims to consolidate and clarify existing consumer law, whilst at the same time updating it to keep pace with technological advances.

The result should be that consumers fully understand their rights and the heavy burden on businesses from prolonged disputes, additional staff training costs and the need to seek legal advice, is substantially reduced.

Contracts whether written, oral or implied by conduct for the supply of goods, services and/or digital content are all covered.

The Proposals

Goods, services and digital products

Some of the proposed changes are:

  • Any pre- contractual information about the main characteristics of the goods will form part of the contract.
  • The right to reject goods within 30 days (early rejection). For hire and hire purchase agreements, the period will run the day after the consumer obtains possession. If any repair or replacement is agreed between the parties, that period is paused (the waiting period) for the duration agreed by the parties. On return of the goods, the consumer has the remainder of that period or 7 days (whichever is longer) to still exercise the early right to reject.
  • The trader will have one opportunity to repair or replace, if that: 
    • fails; 
    • has been impossible; 
    • has been sought, but not carried out within a reasonable time/without significant inconvenience to the consumer,

then the consumer can either keep the goods and insist on a reduction in the price or reject the goods and obtain a refund.

If the goods are rejected within 6 months of delivery, the trader can't apply a deduction to the refund to reflect the use the consumer has had, unless there is a proven second hand value of the goods. If so, the second hand value will be the minimum the trader has to refund.

Goods must be delivered within 30 days after the contract is made, unless the parties agree otherwise. Where the delivery date is essential, if the date is missed, the consumer can treat the contract as being at an end. If not essential, a further period can be given by the consumer, but if the trader fails to adhere to that one, the same position applies.

Unfair contract terms

The main subject matter terms will only be exempt from review if such terms are "transparent and prominent". Transparent means plain and intelligible, readily available to the consumer and if in writing, legible. Prominent means presented in such a way that the average consumer would be aware of it ("average" meaning reasonably well informed, observant and circumspect).

The "grey list" has been updated and now includes 3 new terms:

  • Disproportionately high charges where the consumer decides not to conclude or perform the contract eg early termination clauses.
  • Terms which allow a trader to determine the characteristics of the subject matter after the consumer is bound.
  • Terms which allow the trader to determine the price after the consumer is bound.

The fairness test of the Unfair Contract Terms in Consumer Contracts Regulations 1999 will not be changed, but the Regulations' existing scope will be extended to include all negotiated terms.

Commentary

The proposals will apply to all contracts with consumers, including banking and financial services. As such, firms should be considering their existing terms and conditions, both those on paper and on line. The provisions will also be relevant when considering a credit card provider's potential liability under section 75 of the Consumer Credit Act 1974.

The reforms are likely to come into force in 2014. If you would like to provide any feedback on the proposals you can do so by 13 September 2013 either via the website at https://www.gov.uk/government/publications/draft-consumer-rights-bill or by email to [email protected].

If you have any queries in the meantime, please do not hesitate to get in touch.