New Consumer Rights Legislation – What Will It Mean for Businesses and Customers?    

The new Consumer Rights Act 2015 (“the Act”) will see an overhaul of consumer protection laws in the UK. This means various existing pieces of legislation are being brought together and included in a new framework. It's also claimed that the updated law will simplify the rules for consumers obtaining refunds and any replacements consumers will be entitled to.

With most provisions of the Act coming into force from 1 October 2015, it's essential for companies in East Anglia to take action and ensure they bring in the consumer protection measures stipulated. If you are a business affected by the changes, reviewing your procedures now can help to guard against potential problems later.

At the same time, customers also need to be aware of their rights under the new law and make sure they apply for repairs, replacements or refunds within the relevant time limits. Here is a brief look at some of the main areas covered in the Consumer Rights Act 2015. However, if businesses or customers do run into legal problems over the new act or any other consumer issue, then it is essential to obtain expert legal advice from an experienced business lawyer, such as Marcus Croskell, who has clients in the Essex, Suffolk and East Anglian region.

Supply of Goods

The law sets down requirements for the expected standard of goods, which must be of “satisfactory” quality. This means they have to meet the expectations of a “reasonable” person in light of relevant circumstances, such as the price and product descriptions (sections 9 to 11 of the Act). This is nothing new, but it is now codified and condensed into one piece of legislation.  The Department for Business, Innovation and Skills (“BIS”) has issued guidance to businesses, which explains that, for instance, budget items are not necessarily expected to be of the same quality as more expensive alternatives – but they are still expected to work and to be fit for the purpose they were sold for.

For goods sold in a shop, there is normally a right for consumers to reject the item within 30 days if it is faulty or unsatisfactory and receive a full refund (section 22 of the Act). If a fault develops after the 30-day period but within six months, the consumer has a right to a replacement or repair. However, if the item can't be repaired or replaced, then in most cases there is still the right to a full refund.

Between six months and six years after purchase, if a fault develops, the customer could still be entitled to a repair or replacement, or to some money back, depending on how long that type of product is normally expected to last. 

The same time limits apply for faulty goods bought at home, for instance via the internet which are sometimes referred to in legal parlance as goods or services subject to distance selling. However, with most types of product, there is also a 14-day window or ‘cooling-off period’ where customers are allowed to send goods back if they change their mind, even if they aren't faulty – for instance, if clothes don't fit.

Supply of Digital Content

This is a relatively new area, but has become increasingly popular over recent years, with many goods, such as apps and games, being provided via the web and to our smartphones, tablets, consoles and computers.  With the further expansion of video on demand (“VoD”) from providers like Netflix, Yahoo, Amazon, etc, this is an expanding area of law and litigation.

Companies supplying digital content need to be aware of consumer rights under the new law, which lays down that, as with physical items, the digital goods must be of satisfactory quality, as described and fit for purpose.

If digital content is faulty, the customer is entitled to a repair or replacement, and if it cannot be put right within a “reasonable” time they could be able to claim part or even all of their money back. Under some circumstances, there could also be a right to have their device repaired and get compensation if the digital content has damaged it (sections 42 to 45 of the Consumer Rights Act 2015).

Provision of Services

The new law also sets down expectations for provision of services, saying they need to be carried out with “reasonable care and skill”, and that if this isn't the case the contractor can be asked to put things right or give a partial refund. If a delivery time and/or price hasn't been agreed in advance, then these too have to be “reasonable”. In addition to this, for services paid for at home rather than in a shop, in most cases there is a right to cancel within 14 days.

This section will likely have wide ramifications as section 48(1) of the Act states that it applies to “a contract for a trader to supply a service to a consumer.”  Therefore, this will equally apply to the provision of supplies of all trades such as builders, plumbers, carpenters, decorators and professionals.  However, it is important to note that the supply of services to a business is excluded.  Business leaders are expected to essentially know better and enter into any business relationship with their eyes wide open.

Under the old legislation, Marcus Croskell recently acted for a builder that constructed a large extension to a property.  The consumer was unhappy with the build quality and she used the similar provisions under the old legislation including the Supply of Goods and Services Act 1982 to bring a claim.  Marcus assisted the builder bring a counterclaim for non-payment of his final invoice and the consumer ended up walking away with no further work done to her property and a bill for over £40,000 paying her own legal costs and damages to Marcus Croskell’s client.

What Should Businesses Do to Comply?

As a starting point, BIS is suggesting companies display its “point of sale” information to inform customers of their rights. This isn't an obligation but they are hoping businesses will do so. As well as this, companies need to go over all their terms and policies to ensure they comply with the new Act. This includes contracts, since the new law also covers unfair terms in contracts. Key terms must be clearly displayed and staff must be trained in what's required.

The BIS guidance to help small business owners implement the new law includes a lot of detail, but if you are in doubt about anything, it's a good idea to seek legal advice. In practice, no matter how careful you are to comply, various types of dispute could arise. For instance, the BIS guide says that it will be “ultimately for the court” to decide whether goods are satisfactory.

If you are involved in a consumer legal issue or contractual dispute which needs resolution, direct access barrister Marcus Croskell can help. As an expert business lawyer, he has represented many clients in Essex, Suffolk, Norfolk, Cambridgeshire and London. He can provide advice and legal representation, both via mediation and negotiation and if a case ends up in court. 

Contact him for a free initial legal enquiry on 0843 8862603 or by EMAIL HERE.