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MILS Case Study: The Consumer Rights Act 2015: One Year OnBack

MILSLogo2Introduction

It is a year now since the changes were introduced by the Consumer Rights Act 2015. Consumers are now starting to become aware of the change in their rights and to more aggressively enforce them.  A year on are you sufficiently familiar with the changes and how they potentially affect your business?  We take this opportunity to re visit some of the issues.

Statutory rights; Goods

The Consumer Rights Act 2015 (CRA) consolidated previous consumer rights legislation incorporated within the Sale of Goods Act 1979 (SOGA), Supply of Goods and Services Act 1982 (SOGSA). The actual rights remained substantially the same.

The implied terms remain that goods must be of ‘satisfactory quality’, ‘fit for purpose’, and that they correspond with their description. These terms are already implied into every consumer contract and the act simply confirms that this position remains the same, unless any specific differences are brought to the consumer’s attention

  • Satisfactory quality – Section 9 (1)-(4) of the CRA re-order the current section 14(3)-(5) of the SOGA
  • Fit for a particular purpose section 10 CRA is substantially similar to the rights as provided by the SOGA
  • As described Section 11 of the CRA is substantially similar to the

rights as provided by the SOGA.

  • Goods to match sample Section 13 of the CRA is substantially similar to the current rights as provided by the SOGA
  • Goods to match a model seen or examined Goods have always had to be accurately described, and match any ‘Sample’ provided. Section 14 is a development of this for the CRA and goes one step further. Where a consumer is shown an example of goods to be purchased it will be an implied term that the goods purchased will have the same characteristics as any example unless the differences are sufficiently brought to the consumer’s attention prior to the contract.
  • Installation as part of the contract Section 15 of the CRA is a newly worded consumer protection for the CRA. However, this is commensurate with the most likely application of the old law and as such has not yet presented any difficulties.
  • Goods not conforming to the contract if digital content does not conform. Section 16 is new for the CRA. Digital content is now to be treated as any other goods when supplied. In application, this is unlikely to significantly impact on the motor trade.
  • Motor trader to have the right to supply goods. Section 16 is commensurate with the current application of the law.

Remedies

This is where consumers are becoming more aggressive. It is therefore vital that all motor traders have a thorough understanding of the remedies and when they will and will not apply.

Where goods are supplied in breach of the act, consumers will be entitled to the following:-

  • Short term right to reject– consumers will have the right to reject goods that are faulty or not as described within 30 days. If this right is not exercised within this time frame then the right is lost. The consumer can still agree to a repair. If the motor trader replaces or repairs goods during this time this limit is extended. The 30 day period is put on hold during the period of any repair and the consumer will retain the right to reject the vehicle for either 7 days from its return or the remainder of the 30 day period whichever is greater.
  • Repair/replacement– consumers will have the right to request that faulty or not as described goods are repaired or replaced even after the 30 day right to reject period has expired. The motor trader can require one opportunity to repair or replace the goods. However the parties can agree to any number of repairs. If the repair or replacement is claimed by the consumer, the motor trader must carry out the work at no cost within a reasonable time and without inconvenience to the consumer. The consumer cannot demand a full replacement over a repair if this would place an unfair burden on the motor trader. Thus the motor trader should always be able to argue that he can replace a defective part rather than having to replace an entire car.
  • Final right to rejection/ price reduction. In the event that the repair or replacement is impossible, or the motor trader’s one attempt at rectification fails, the consumer has a final right to reject the vehicle or claim a price reduction. Consumers will have the right to reduction in the price or to reject the goods after one unsuccessful repair or replacement. Where this rejection is outside of the initial 30 day period then motor traders are entitled to deduct an amount for the use of the vehicle.

Burden of proof

The onus will be on the consumer to prove that the goods do not perform to the contract if they are seeking to enforce their short term right to reject, however goods will be presumed to not conform to the contract if a consumer seeks to exercise their right to a repair or replacement, price reduction, or a final right to reject within 6 months of delivery.

Deductions for consumer use

No deduction can be made if the consumer exercised their final right to reject within the first 30 days. However a deduction can be made for use for motor vehicles rejected after the short term right to reject.

For anything other than motor vehicles no deductions can be made for any cancellations within the first 6 months

This advice is general in nature and it will need to be tailored to any one particular situation. As an RMI member you have access to the RMI legal advice line, as well as a number of industry experts for your assistance. Should you find yourself in the situation above, contact us at any stage for advice and assistance as appropriate.

 

Paul Carroll

Solicitor

Motor Industry Legal Services

Posted by Sue Robinson on 21/10/2016