Commercial analysis: Liam Waine, consumer dispute resolution partner at Stephensons, provides the lowdown on the Consumer Rights Act 2015 (CRA 2015) in preparation for it coming into force on 1 October 2015.
This article was first published on Lexis®PSL Commercial on 29 September 2015. Click for a free trial of Lexis®PSL.
To what extent does CRA 2015 consolidate the previous law?
It has long been recognised by successive governments that there was a need to further protect consumers from unscrupulous or incompetent traders and prevent those people from being tied to unfair contracts.
Consequently numerous changes and supplements have been made to consumer rights legislation with the intention of providing an appropriate balance between the rights of traders to operate their businesses in a free and competitive manner and the rights of consumers to purchase goods and services without fear of unfair treatment.
However, such changes over the past 50 years have stopped short of any wholesale revision of the law in this regard. In effect, various governments have been filling in the gaps as they appeared. This has created two major difficulties.
Firstly, the provisions in place are to be found in numerous, disparate statutes, statutory instruments and regulations. Secondly, these provisions are often bundled with legislation that applies to non-consumer contracts making it unclear what action is to be taken in each case.
As a result, any cohesive form of consumer protection has been needlessly inaccessible for those who need it.
CRA 2015 aims to address these problems by taking the existing 'scattered' legislation and re-codify it in one more cohesive act. This is not to say that this effort has sought to repeal large swathes of existing law.
Instead, it has transferred the powers relating to consumer contracts, previously held by provisions such as the Supply of Goods (Implied Terms) Act 1973, or the Unfair Contract Terms Act 1977, into the new CRA 2015. These existing acts will continue to apply, but only to those contracts not covered by CRA 2015 (ie, non-consumer contracts).
CRA 2015 also takes a far more 'consumer friendly' approach in regards to its accessibility to those who most need it. It is framed in far less legal 'jargon' than the legislation it replaces. This can only be of benefit to consumers.
How does it dovetail with existing consumer contracts laws?
CRA 2015 uses the same definitions of 'consumer' and 'trader' as the Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013, SI 2013/3134 ensuring consistency throughout the legislation.
CRA 2015, s 37 relates to any contract regarding the provision of digital content and references obligations placed on the trader to provide information to the consumer prior to a contract becoming binding.
Does it apply to contracts which were entered into before 1 October 2015?
There is no indication that the act will be applied retrospectively, so a consumer will not be able to rely on the bulk of provisions in the Act--which come into force on 1st October 2015--for any contracts entered into prior to this date.
Is there anything in the new law which didn't exist in the previous legislation?
CRA 2015 makes some provisions for aspects of consumer rights law which were not properly covered by existing legislation. This is particularly true in respect of digital content which did not easily sit within the existing legislation.
Now, content such as apps, digital games, music, e-books, films, software and cloud computing services are subject to the same checks as traditional physical goods and services--in short, that they are of satisfactory quality, fit for purpose and as described.
CRA 2015 also brings clarity regarding the consumer's right of rejection. The consumer has a remedy of a 'short term right of rejection', lasting 30 days, and beginning either from the day after ownership or possession has been transferred, delivery of the goods, or notice that the goods have been delivered and that any installation or action has been completed. The consumer will lose this right of rejection if it is not exercised within the 30-day period. However, this right of rejection can be suspended for any waiting period in the event the consumer has requested a repair or replacement remedy within those 30 days.
In the event this 30-day period has lapsed then the consumer may still seek a full refund for the contract sum, provided there has been at least one repair or replacement attempt before the request is made. This is known as 'final right to reject'.
In the event the consumer exercises the final right to reject, CRA 2015, s 24(8) confirms their refund may be subject to a deduction, reflecting the use the consumer has had of the goods. Notwithstanding this, CRA 2015, s 24(10) confirms that there will be no deduction in the event the final right to reject is exercised in the first six months as it is treated as though the product was defective at the time of entering into the contract.
Looking at the flowchart in the government guidance there is a lot for traders and consumers to digest in terms of, for example, remedies. How ready are they for these changes?
CRA 2015 re-codifies the existing legislation. Therefore much of the content will be familiar to traders, though the re-codification ensures that the legislation is more accessible for consumers.
CRA 2015 is also drafted in a consumer friendly way, ensuring that it is comprehensible to the reader. The remedies are now much clearer and the manner in which the act deals with these means that these remedies are consolidated for various types of contract. Therefore, while there will initially be a period in which the traders and consumers will become accustomed to CRA 2015, once this period has passed, all parties will be dealing with a far more compact package of legislation which should be easier to understand and apply.