Consumer rights and remedies – an update

Goodman Derrick’s dispute resolution team has received a number of recent instructions to act for both consumers and businesses in relation to disputes involving the application and interpretation of the Consumer Rights Act 2015 (the “Act”). The Act came into force in October 2015 but it appears that both consumers and businesses are only now becoming alive to the rights and remedies afforded by it.

The Act was predominantly designed to modernise and simplify key parts of the UK’s consumer protection rules, particularly in relation to distance and online selling. It incorporates many pre-existing consumer rights but in our experience, it is the remedies that consumers are afforded under the Act which consumer claimants are starting to use to greater effect. These remedies incorporate a staged remedy system for addressing defective goods which is broadly comprised of the following:

  • Initial right to reject the goods – an automatic 30 day period from the date of purchase to return the goods and to receive a full refund if they do not meet the implied terms. This period is shorter if the expected life of the goods is shorter.
  • Repair or replacement – if the 30 day period has lapsed or during that time, the consumer elects not to exercise their right to reject goods, they will be entitled to claim a repair or replacement. This remedy will be deemed a failure if, after one attempt at repair or replacement, the goods still do not meet the necessary requirements.
  • Final right to reject or price reduction – if a request for repair or replacement has been refused or the 30 day period has lapsed, then the consumer can claim a price reduction or a final right to reject the goods. Any reduction or refund can be up to 100% of the product value.

The Act also affords remedies associated with the purchase of digital content. Unlike with the purchase of goods, there is no right to reject faulty digital content, in circumstances where there is no way to return the digital content but the consumer is entitled to repair or replacement or if this is not possible, to a price reduction. Similarly, the Act affords remedies to a consumer of services including: (1) repeat performance of the service; (2) reduction of price; and (3) appointment of a new supplier.

The rights and remedies under the Act are subject to a number of exclusions, for example where defects are brought to the consumer’s attention prior to purchase or where damage has been caused by the consumer. Notwithstanding these, the staged remedy system afforded by the Act is serving as a useful additional tool to a consumer claimant.  In our experience, a large number of businesses are either not aware of or have chosen to ignore the Act.  We have noticed in particular that requests by consumers to repair or replace outside of the 30 day initial right to reject period have either been refused or simply ignored.  By failing or refusing to engage in the process, businesses are then permitting the consumer to exercise their final right to reject or to a price reduction, in circumstances where the least expensive option might have been to repair or replace.

A further concern for businesses is that the interpretation and application of the Act is relatively untested in the courts. In particular, there remains a question over defective goods that have been installed or part installed and the impact that this might have on a consumer’s right to reject.  An additional uncertainty for businesses in relation to consumer law derives from Brexit. Much of consumer legislation, including the Act derives, at least in part, from the EU. It is likely that following Brexit, the UK will be free to repeal EU-derived consumer protection laws. However, after Brexit (depending on its form) the UK courts may not be bound by ECJ decisions and any argument that domestic law does not correctly implement an EU directive would no longer be available.  In the circumstances, even without repeal or amendment of the Act there may well be further changes in its interpretation. This is likely to again lead to further uncertainty for both consumers and businesses.

Despite this uncertainty there remain a number of pro-active steps that businesses can take to try to avoid disputes arising from and their falling foul of the Act, not least by ensuring that all relevant staff appreciate the basic rights and remedies afforded to consumers under the Act. Should you wish to understand more about the application and enforcement of the Act, please contact the Goodman Derrick dispute resolution team and we would be happy to discuss this with you.

This guide is for general information and interest only and should not be relied upon as providing specific legal advice. If you require any further information about the issues raised in this article please contact the author or call 0207 404 0606 and ask to speak to your usual Goodman Derrick contact.