The government has launched its long-awaited consultation on a Consumer Bill of Rights for the UK. The Consumer Bill of Rights was originally announced in September 2011. The consultation, which carries the strapline ‘confidence for consumers, clarity for businesses’, covers the supply of goods, services, and, of particular interest to SCL members, digital content. The government wishes to give consumers:
‘the ability and the confidence to assert basic consumer rights when faced with shoddy goods or services’
and to give businesses:
‘a simple framework of consumer law that they can apply by themselves without having to consult lawyers or refer cases to head office for advice’.
The consultation complements the government’s plans to strengthen UK competition law and the way that it is enforced; and its consultation of April 2012 on strengthening private enforcement of consumer law. The proposals also build on the BERR review of consumer law in 2008 and the Law Commission and Scottish Law Commission’s work on remedies for faulty goods.
Why the need for reform?
The government view is that UK consumer law has developed piecemeal and is complex and, at times, inconsistent. Consumers do not understand their rights and businesses find the law difficult to apply (while some take advantage of its complexity to deny consumers redress when things go wrong). Services are not dealt with to the same extent as goods, and the law has not kept up to date with developments in digital content.
The suggested changes to consumer law aim, therefore, to overhaul the core consumer rights regime on faulty goods and poor services, while updating the law to clarify rights in relation to digital content. The changes will also implement the Consumer Rights Directive (Directive 2011/83/EU) and, if it proceeds, take into account the proposed Common European Sales Law, which includes specific sale-related rules for contracts for the cross-border supply of digital content.
Summary of changes
The government says that its proposed changes will:
· remove unnecessary inconsistencies and clarify the law on the sale and supply of goods with clear rules where a principle-based approach is causing disputes and consumer detriment;
· introduce clearer statutory consumer rights and remedies for services to improve consumer protection when a service fails to meet reasonable standards;
· bring the law up-to-date by protecting consumers from faulty digital content, such as music or film supplied on disk or as a download.
The new legislation would relate to business-to-consumer arrangements, rather than to business-to-business or to consumer-to-consumer arrangements. The definition of consumers would be limited to individuals, rather than to companies or other organisations. Very small businesses would not be included in the definition of consumer. The government intends to adopt the definition of trader used in Article 2(2) of the Consumer Rights Directive: ‘any natural person or any legal person, irrespective of whether privately or publicly owned, who is acting, including through any other person acting in his name or on his behalf, for purposes relating to his trade, business, craft or profession.’
The proposals would make changes to various pieces of legislation including the Sale of Goods Act 1979 and the Supply of Goods and Services Act 1982, as well as various statutory instruments.
Goods
For substandard goods, the government proposes to:
· replace an opaque system of ‘implied terms’ with a clearer set of statutory guarantees to make consumer rights easier to understand;
· set a clear time-limit on the short-term right to reject, within which consumers can return substandard goods and get a full refund, so as to provide clarity for both parties;
· where the right to reject is lost, or where the consumer does not choose to reject faulty goods, clarify the number of times that retailers can repair or replace substandard goods before being obliged to offer a refund;
· limit the extent to which retailers can reduce the level of refund provided, to account for the consumer’s use of the goods up to that point;
· unify the rights and remedies available for different contract types, such as sale, conditional sale or hire purchase, as these are currently inconsistent.
Services
For poor services, the government proposes to:
· replace ‘implied terms’ with a statutory guarantee which can be easily understood so that business cannot avoid basic responsibilities to the consumer;
· set out basic statutory remedies which apply when services go wrong, and make clear what a service provider would always have to offer when the statutory guarantee had not been met.
The government is also consulting on whether it should go further to introduce a ‘satisfactory quality’ standard for some types of service (in particular, installation, repair and other services involving goods) in line with the goods regime.
Digital content
Recent research has found evidence of considerable consumer detriment in the area of digital content. The problems include access; lack of, or unclear and complex, information; quality; security; unfair terms and privacy concerns.
The government will use the definition of digital content in Article 2(11) of the Consumer Rights Directive: ‘digital content means data which are produced and supplied in digital form’. The government’s proposals will not change the law on copyright. Neither do they consider terms in end-user licensing arrangements, which are being separately considered as part of a unfair terms project http://lawcommission.justice.gov.uk/areas/unfair_terms_in_contracts.htm by the Law Commission and the Scottish Law Commission. The Commissions intend to publish their consultation on unfair terms shortly.
For digital content, the proposed reforms involve clarifying the rights that a consumer can expect for digital content and the remedies that are available if the digital content does not meet those expectations.
The government propose to treat digital content as a separate category from goods and services and to tailor the regime where necessary. The government does not intend to bring digital content within the definition of goods as it believes the disadvantages are too significant. However, it suggests that the rights and remedies for digital content should be aligned as far as possible with those available in relation to faulty goods to create a familiar regime for business and consumers.
The government is also asking for views on whether the remedies available should include a short-term right to reject for digital content and whether to apply specific rights and remedies to the services surrounding access to, and use of, the digital content, such as downloading or streaming digital content.
The government will not be addressing internet service provision in the proposals on digital content as it will be covered by the proposals on services.
Next steps
As well as the full consultation document, the government has issued a short form version http://discuss.bis.gov.uk/consumer-bill-of-rights/ to make it easier for a full range of people to respond. The consultation ends on 5 October 2012. The government plans to publish its response by 5 January 2013.
Helen Hart is a freelance legal journalist and editor. She has previously worked at Practical Law Company, Stevens & Bolton LLP, Palm, Centrica and Allen & Overy LLP.
