12 October 2015 #Dispute Resolution
The Consumer Rights Act 2015 which came into force on 1 October 2015 marks one of the biggest overhauls of consumer law in recent years. The aim of the new Act is to make the law clearer and easier to understand. It should give consumers greater protection and more remedies but it should also provide businesses with a greater degree of certainty as to what they can and cannot do when faced with an unhappy customer.
The Act consolidates existing law and retains the familiar terms previously implied under the Sale of Goods Act and the Supply of Goods and Services Act; that all goods must be of satisfactory quality, fit for purpose and as described, and services must be performed with reasonable care and skill. It also adds some new implied terms, including a requirement that goods match any model seen before purchase. More significantly it extends the rights for consumers where there has been a breach of contract. Every business selling directly to consumers will need to be familiar with these changes.
The Act introduces a “tiered” approach to remedies where goods do not conform to the contract. A consumer has an initial 30 days in which to reject the goods and receive a full refund. This is known as the “short term right to reject”. After 30 days that right is lost but the consumer can instead ask for a repair or replacement of the goods and a business will be obliged to do so within a reasonable time and without causing significant inconvenience. Where the business then fails to repair or replace (or it if impossible) the consumer then has a further right to reject or to a price reduction. There are also significant limits on any deduction for use in the first 6 months: at present these can only be made if the defective product is a motor vehicle.
Where services have not been performed with reasonable care and skill or they have not been performed as agreed, a consumer can ask for a price reduction or, can ask a business to re-perform any part of a service. If it is impossible to re-perform the service or if the original performance or a re-performance of the service has not been provided within a reasonable time the consumer will then be entitled to ask for a price reduction.
The Act also brings digital content in line with goods and services so if digital content does not conform to the contract, a consumer can ask for a replacement, a reduction in price or repair. There is no right to a refund unless the consumer has been supplied with digital content which the business had no right to supply, for example, pirated digital content. However, digital content supplied on a tangible medium, such as a film on a DVD, falls under both goods and digital content so a faulty DVD will give rise to the right to claim a full refund. The Act also introduces a new right to compensation where digital content causes damage to a device (or to other digital content) which may even apply if the damaging digital content was provided free of charge.