Consumer Rights Bill formally introduced to House of Commons

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Following extensive consultation, detailed impact assessments and further amendments throughout last year, the Consumer Rights Bill (the Bill) was introduced into the House of Commons on 23 January 2014. The Bill contains some substantial changes compared to the Draft Bill published for pre-legislative scrutiny in June 2013.

Successive governments have long expressed a belief in the need for reform of UK consumer law, with the overall intention of simplifying and consolidating legislation in this area. In September 2011, the Department for Business, Innovation and Skills (BIS) announced it would put forward a Consumer Rights Bill to this end and a draft was issued, to enable consultation and pre-legislative scrutiny before introduction of the document for parliamentary approval.

A number of key amendments to the Bill have been made, in comparison to the earlier Draft Bill. These include:

  • goods manufactured or produced specifically for the consumer will still fall within the definition of ‘goods’ in a sale of goods contract
  • even where a consumer has ‘accepted’ goods, this does not automatically negate the consumer’s short-term right to reject them in the first 30 days. The parties cannot agree that the consumer loses the short-term right before its expiry
  • conformity with the contract will not have ‘failed’ for the purposes of remedies for defective goods, where non-conformity comes due to problems with materials supplied by the consumer
  • a consumer can require that a trader repairs damage to a device or other digital content, where caused by the trader’s digital content. Alternatively, the trader may compensate for the damage
  • every contract to supply a service will contain, as an implied term, anything said to or put in writing to the consumer by the trader (or on his behalf) about the service or the trader, if the consumer took this into account when deciding to enter into the contract or making a subsequent decision about the service. This is subject to any written or spoken qualification made contemporaneously
  • traders will no longer need to highlight onerous or unusual terms in a consumer contract, to bring them to the consumer’s attention
  • certain provisions from the Consumer Rights Directive have been retained, such as those relating to delivery and risk. It seems these will eventually replace equivalent rules in the Consumer Contracts Regulations 2013, which have been used in the interim to ensure the EU Directive implementation deadline of 14 June 2014 is met
  • the only current private enforcer is Which? (the Consumers’ Association), but private enforcers will now have the right to impose enhanced consumer measures on offending businesses. These powers will be subject to certain conditions
  • the clauses that provide for liability not being excluded in respect of goods and services
  • alterations to the enforcement powers of Trading Standards.

Perhaps most notably, the Bill does not include several of the BIS Committee’s previous recommendations – such as the idea that an outcome standard should be established for the supply of services and extension of the short-term right to reject during holiday periods.

While the Bill’s first reading passed without debate, the Opposition raised a number of concerns during the second reading. Particularly, it suggested the Bill fails to ensure consumers are provided with enough information so they can make informed choices or improve competition. In a subsequent press release, the Financial Services Consumer Panel claimed the “Consumer Rights Bill won’t work for consumers” and suggests further changes to the Bill in three areas:

  • exemption from the ‘fairness’ test should apply only to a price agreed with the consumer when the contract is entered into, not variable future fees or charges unknown at the outset
  • the set of circumstances provided for in the indicative list of unfair contract terms should be extended, to ensure that consumers unable to secure an alternative mortgage product are also protected by having the right to cancel
  • the concept of the ‘average’ consumer should be reconsidered, so social, cultural and linguistic factors are taken into account. This would reflect the fact consumers all have different characteristics and ensure continuity with the European Court of Justice approach.

The Bill has now been sent to the Public Bills Committee for further scrutiny before 13 March 2014. It will be interesting to see what further comments arise and changes are made as the Bill continues its progress through Parliament. Certainly though, as the Consumer Panel notes, “given this is the most radical overhaul of consumer law for more than three decades, it is important we get it right“.