Consumer Rights Act 2015

The Consumer Rights Act 2015^[1] is an Act of Parliament of the United Kingdom that consolidates existing consumer protection law legislation and also gives consumers a number of new rights and remedies. Provisions for secondary ticketing and lettings came into force on 27 May 2015^[2] and provisions for alternative dispute resolution (ADR) came into force on 9 July 2015 as per the EU Directive on consumer ADR.^[3] Most other provisions came into force on 1 October 2015.^[4]

The Act is split into three parts:

• Part 1 concerns consumer contracts for goods, digital content and services.
• Part 2 concerns unfair terms.
• Part 3 concerns other miscellaneous provisions.

Background

The Act was introduced to parliament by Jo Swinson MP, then parliamentary under-Secretary in the Department of Business, Innovation and Skills, on 23 January 2014 with the aim of consolidating and updating consumer protection law and to therefore provide a "modern framework of consumer rights."^[5]

Among the pieces of legislation that have been combined into the Consumer Rights Act are, most notably:

• Unfair Terms in Consumer Contracts Regulations 1999
• Unfair Contract Terms Act 1977
• Sale of Goods Act 1979
• Supply of Goods and Services Act 1982

Definitions

Section 2 lays out the key definitions pertinent to the Act:^[6]

• A 'consumer' is "an individual acting for purposes that are wholly or mainly outside that individual's trade, business, craft or profession." This extends beyond any previous definition in UK or EU law as it includes contracts that are entered into for a combination of personal and business reasons.
• A 'trader' is defined as "a person acting for purposes relating to that person's trade, business, craft or profession, whether acting personally or through another person acting in the trader's name or on the trader's behalf."
• 'Business' is taken to include "the activities of any government department or local or public authority."
• 'Goods' are "any tangible moveable items, but that includes water, gas and electricity if and only if they are put up for supply in a limited volume or set quantity."
• 'Digital content' means "data which are produced and supplied in digital form."

Part 1

Goods

The Act requires goods to be:

• Of satisfactory quality.^[7]
• Fit for a particular purpose.^[8]
• As described.^[9]

Previously defective goods had to be rejected within a 'reasonable period' but now consumers have a minimum of 30 days in which they can reject goods that fail to conform to the contract.^[10]

Digital Content

Digital content includes not only content that is supplied for a price but also freemium software.^[11] The requirements are identical to those of goods, stated above.^[12] The main difference is that there is no right to reject digital content but rather the remedies include the right to repair or replacement, the right to a price reduction and the right to a refund.^[13] Consumers may also pursue other traditional remedies such as damages and specific performance.

Services

Services must be performed with "reasonable care and skill"^[14] and also "within a reasonable time".^[15]

The Act also ensures that any statement a trader makes when a consumer is either deciding to enter into the contract or making a decision about the service after entering into the contract is now a binding contractual term. Previously such terms may only have given rise to an action in the tort of misrepresentation but now a claim may be brought for breach of contract.^[16] This means that a claimant's case will generally be easier to prove and expectation damages may be awarded rather than compensation based on the principle of restitutio ad integrum.^[17]

On top of the usual remedies consumers now also have the right to repeat performance^[18] and price reduction.^[19]

Part 2

Unfair terms

The definition of an 'unfair term' remains the same as that originally outlined in the Unfair Contract Terms Act 1977; i.e. a term is unfair if, "contrary to the requirement of good faith, it causes a significant imbalance in the parties’ rights and obligations under the contract to the detriment of the consumer."^[20] However terms that express the main subject matter of the contract are not subject to this fairness test provided such terms are both transparent and prominent in the contract.^[21]

The Act also adds to the so-called 'grey list' that lists a non-exhaustive range of terms which are, in most cases, likely to be considered unfair by the courts.^[22] These include:

• Extortionate charges when a consumer decides to cancel a contract.
• Allowing the trader to make decisions about the characteristics of the subject matter after the contract had been concluded.
• Giving the trader a mandate to vary the price after the consumer is already bound.

Section 71 places a duty on the court to consider the fairness of contractual terms even where neither party raises the issue.^[23]

Part 3

Competition law

Schedule 8 amends the Competition Act 1998 and greatly expands the jurisdiction of the Competition Appeal Tribunal to the extent that it now has similar powers the High Court. The Act also now provides for collective proceedings, a form of class action, on an 'opt-out' basis on top of the present 'opt-in' system. There is also now a statutory scheme of voluntary redress in competition law; a form of ADR.^[24]

Duty of letting agents to publicise fees

Letting agents are under a duty to display a list of fees in each of their offices in a prominent position. Such a list must include:

• A description of each fee.
• Whether the fee relates to each dwelling-house or each tenant under a tenancy of the dwelling-house.
• The amount of each fee.

The notice must also indicate that the agent is part of a redress scheme and give the name of said scheme.^[25]

Secondary ticketing

Anyone reselling tickets for an event must give the following information:^[26]

• The seat (or standing area) that the ticket is for.
• Any restrictions on the type of person who may use the ticket (e.g. age restrictions etc.).
• The face value of the ticket.

The event organiser may not cancel a ticket or blacklist a seller for re-selling the ticket unless this right is contained within the original terms of the ticket.^[27]

Impact and reception

The official position is that it is hoped that by consolidating existing legislation the new Act will simplify consumer protection law for both consumers and businesses alike.^[28] Also,the government predicts that the Act will "boost the economy by £4 billion" over the course of the next decade.^[29]

Although claimed to be a "consolidation", the Act is nothing of the sort. Consumers and businesses had hoped simply for an update and consolidation of standard statutes like the Sale of Goods Act 1979 and the Supply of Goods and Services Act 1982. In the event, these older statutes (along with their updating mini-statutes) continue, with the massive new 2015 Act^[30] sitting unhelpfully on top of them all.

Notes

See also

• Consumer protection in the United Kingdom
• Office of Fair Trading
• Standard form contract
• Unfair Terms in Consumer Contracts Regulations 1999
• Unfair Contract Terms Act 1977
• Sale of Goods Act 1979
• Supply of Goods and Services Act 1982
• Unfair Terms in Consumer Contracts Regulations 1999