The Consumer Rights Bill is a major piece of legislation that, when enacted, will strengthen consumer rights in a number of areas, and consolidate and simplify a range of diverse legal provisions. In many ways it is a thoughtful and welcome antidote to the complicated, knee-jerk, gold-plated law-making that is so often a feature of UK consumer law. In reality, simple rules help consumers and good businesses – firms looking to rip off customers thrive on complexity.
Goods, services and digital media
The Bill is ‘horizontal’, in other words applies to contracts with consumers across all sectors. The Bill would clarify a consumer’s rights when buying goods (satisfactory quality, fitness for purpose, matching any description etc), especially their remedies when things go wrong. Consumers will have stronger, clearer remedies including the right to reject to the goods or to insist on repair.
Similar clarifications will also be made in relation to contracts for the supply of services, including additional pre-contract information and a right to repeat performance or a price reduction where the service falls below standard.
For the first time, consumer rights under contracts for the supply of ‘digital content’ will be put on a statutory basis. Digital content is defined as data produced and supplied in digital form, and would include software and downloaded media such as music, computer games, ‘apps’ etc.
Unfair terms
Another important feature of the Bill is the part on unfair terms, which will consolidate relevant legal provisions and make a number of amendments to the law, following careful examination and recommendations by the Law Commissions. This will lead to an enhanced regime designed to ensure that terms in business contracts with consumers are legible and fair.
The Bill introduces a key Law Commissions’ recommendation that would exclude (from fairness assessment) the appropriateness of the price payable under a contract by comparison with the goods, digital content or services provided under it. But this exclusion would apply only if the term was “transparent and prominent”.
The practical application of this, and some of the other, provisions concerning unfair terms will require careful thought. In particular, we very much hope that key facts information, provided in accordance with rules in highly-regulated areas such as financial services, will suffice in terms of the provision mentioned above.
Statements made by firms
Overall, however, the changes that the Bill will bring about seem sensible. Indeed, even accepting that there will be implementational challenges for businesses, it would be tempting to award the Bill full marks were it not for one provision.
Clause 50 gives contractual status to anything written or spoken to a consumer, by or on behalf of the firm, which the consumer takes into account in purchasing a service.
The completely appropriate objective is to counter rogue traders and firms that do not wish to treat their customers fairly and, in some cases, positively aim to mislead them. In order to encourage purchase, such organisations will often make verbal statements to customers that contradict the formal contractual position. Clause 50 is designed to deal with this mischief.
But, it is unlikely that the provision would alter the behaviours of the firms that it is designed to address. Those firms are likely to calculate that, on balance, greater profits would be generated by adhering to the misleading status quo.
The end result could be the perception of a frustrating, stilted experience for customers at firms that were trying to comply with the letter and spirit of clause 50 and a ‘better’ customer experience with firms intent on mis-treating their customers.
As things stand, clause 50 could have the entirely counter productive effect of driving consumers into the clutches of ‘friendly’, ‘accommodating’ rogues who were happy to ‘have conversations’ and give customers what they ‘wanted’ – unlike the stuffy business down the road that insists on a ‘load of time wasting bureaucracy’.
A much better alternative would be proper enforcement of the many OTHER consumer protections already in the Bill – financial services now have very strongly enforced regulation: why can’t other sectors?