On 1 October 2015 a number of important changes are being made to consumer law. Businesses that deal with consumers need to be prepared for the following:
1. In addition to the existing statutory terms that are implied into contracts for the sale of goods to consumers, such as a warranty that goods are of satisfactory quality, further terms will be implied such as a warranty that goods will be installed correctly (where installation forms part of the contract)
2. Where goods supplied do not meet the statutory standards, the consumer has a number of tiered remedies under the Consumer Rights Act 2015:
(a) Firstly, they may reject the goods within 30 days. If rejected, the consumer can ask the seller for a full refund. The refund must be given without delay and in any event within 14 days from the date that the seller agrees that the consumer is entitled to a refund
(b) Secondly, if a consumer chooses not to reject (or is too late to reject) the consumer can require repair or replacement of the defective goods
(c) Finally, if repair or replacement is not available, the consumer has a final right to reject the goods
3. In addition to the above, a consumer has a statutory right to compensation if the goods have caused personal injury or damage to other property, as well as compensation for the additional cost of purchasing equivalent goods if those goods are more expensive.
4. Where a consumer reports a defect within six months of delivery there is a presumption that the goods were defective at the time of delivery. After this period the burden of proof is on the consumer to prove that the goods had an underlying or hidden defect on delivery. Businesses therefore need to consider how their quality control procedures can be designed to rebut the presumptions if necessary.
5. The Consumer Rights Act 2015 implies the following into contracts for the supply of services:
(a) The service must be carried out with reasonable skill
(b) Information given to the consumer is binding where the consumer relies on it
(c) The service must be provided at a reasonable price
(d) The service must be carried out within a reasonable time
Where services are not carried out to the statutory standards the consumer can require the services to be repeated and if not repeated to the required standards, the consumer can require a price reduction and damages.
6. The Alternative Dispute Resolution for Consumer Disputes (Competent Authorities and Information) Regulations 2015 make it an offence if businesses fail to inform consumers, whose complaints they do not resolve, of the availability of an ADR service. Further EU regulations require businesses to put a link on their website, located alongside contact details, to a website being developed by the European Commission which is due to be functional in early 2016. The aim of the website is to help resolve cross-border disputes more efficiently. Failure to comply could lead to action from Trading Standards followed by a court order imposing an unlimited fine and up to two years in prison.
7. In addition to the above, there is a new requirement to ensure that the terms of the contract are both transparent and prominent.
For the reasons above we strongly recommend that all businesses who trade with consumers (i.e. any person who is not acting for the purposes of a business) review their procedures, terms and conditions and all other material used in communications with consumers. For further information regarding Consumer Law contact Farleys Solicitors specialist commercial team on 0845 050 1958. alternatively please complete an online enquiry form.