Dr. Julie Nixon, solicitor at MBM Commercial writes about recent changes to UK consumer law.

Currently, UK consumer law is a mix of EU-derived and UK-specific rules. The Consumer Rights Bill will replace some, but not all, of the UK’s current legislation with regard to business to consumer transactions, including the Sale of Goods Act 1979 and the Supply of Goods and Services Act 1982 (these two acts will still apply to business to business transactions).

What’s New?

Digital Content

For the first time rights on digital content will be set out in legislation. The CRA will give consumers a right to repair or replacement of faulty digital content where the digital content is supplied for a price or is supplied free with goods and services which the consumer has paid for, and the digital content would not be otherwise available to the consumer. The existing law was not clear on consumer remedies for defective digital products, having been conceived some time before the digital era.

Supply of Services

The CRA provides new rules where a service is not provided with reasonable care and skill or as agreed. Consumers now have a remedy of “repeat performance” and price reduction if a service does not conform to the contract agreed with a trader. Pre-contract statements (oral or written) made by a trader about their service and taken into account by the consumer when deciding to enter the contract will also be treated as contractual terms.

Unfair Terms

The CRA also reforms and consolidates the unfair contract terms in consumer contracts regime. Written “relevant” terms (those terms specifying the main subject matter of the contract or setting the price) will not be subject to the fairness test if they are transparent (in plain and intelligible language and legible if written) and prominent so the terms are brought to the consumer’s attention. The fairness test is now extended to include consumer notices such as announcements and other communications made orally.

New terms have been added to the “grey list” (terms in consumer contracts which may be regarded as unfair) as follows: allowing a trader to decide the characteristics of the subject matter after the consumer is bound, allowing disproportionate charges or requiring the consumer to pay for services which have not been supplied when the consumer ends the contract, and allowing the trader discretion over the price after the consumer is bound.

Anti-Competitive Behavior

The CRA introduces a new “opt-out” collective action in the Competition Appeal Tribunal (CAT) akin to the US class action system, so claims regarding anti-competitive behavior can be brought on behalf of a defined group without the need to identify all the individual claimants. The opt-out aspect will only apply to UK domiciled claimants.

So the CRA introduces a number of important changes requiring businesses to review their T&Cs to ensure “relevant” terms are prominent, and to review the way in which consumer complaints are handled. Pre-contractual information may form part of a contract so information and literature provided to sales staff must be accurate.