A long and overdue reform of consumer law is currently being considered by Parliament through a new Consumer Rights Bill. This Bill seeks to consolidate and reform consumer law in a number of areas, the most important of which for businesses includes changes to consumer rights and remedies in respect of goods, services and digital content and also changes to unfair contract terms.
At the moment the present UK consumer law is over 100 different pieces of legislation. The New Bill will consolidate these laws which should make it easier for businesses to understand the laws which they must operate within. The Bill also seeks to address some of the deficiencies in the law relating to digital sales. It is anticipated that the Bill will become law by October 2015.
The Bill will only concern business to consumer contracts and will not apply to business to business contracts which will continue to be regulated by the present law. The main changes which are being proposed and which are worthy of note are the following:
- If a consumer is unhappy about the quality of the goods supplied they have a fixed period of 30 days to reject the goods. Presently, if goods are defective a consumer has a reasonable period of time to reject the goods for not being satisfactory. This change will bring some helpful clarity to what a ‘reasonable’ period of time might be.
- A business should be given an opportunity to repair or replace defective goods if they are not of satisfactory quality and the right to reject has been lost. The consumer may ask instead for a reduction in the price if they want to keep the defective goods instead of having them repaired or replaced.
- The Bill requires greater transparency between the business and consumer when contracts and terms are being prepared. Onerous terms will have to be brought more to a consumer’s attention so the current practice of hiding terms in a contract’s small print. This does not relate to any term relating to price but any default terms must be clear and transparent and brought to the consumer’s attention.
- Any term in a contract which a consumer alleges to be unfair and onerous (often contained in the small print) will be examined by the Courts by reference to a ‘fairness test’ rather than the current ‘reasonable test’ which is the current consideration. It is anticipated that this will assist the Courts to find in favour of the consumer against the business by applying a broader brushed ‘fairness’ test.
- Helpfully lists of terms which in law will be deemed unfair are going to be set out in the legislation. Once these are published businesses should review their current terms and conditions against these lists to identify any areas of non-compliance and ensure their terms are redrafted.
We shall provide an update on the Bill once its final provisions have been agreed upon by Parliament.