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Consumer law is currently undergoing reform; the Government considers aspects of consumer rights legislation as complex, confusing and archaic. A Consumer Rights Bill (CRB) has been drafted to consolidate and modernise the mass of piece-meal legislation.
In June 2013, the Department for Business, Innovation and Skills (BIS) published their final response to a series of Government consultations surrounding consumer rights (this also took into consideration recommendations made by the Law Commission and the EU). The Bill was then introduced into Parliament on 23 January 2014 by the Secretary of State for Business, Innovation and Skills, the Rt Hon. Dr Vince Cable MP, supported by the Prime Minister and Government.
The Bill has now entered a ‘Ping Pong’ phase in the Houses of Parliament (commenced 12 January 2015) where further amendments made by the House of Lords will be considered in the Commons. BIS have predicted the Bill will come into force on 1 October 2015; however this will be determined on timely passing of the Bill by Parliament. Guidance material will be available for businesses as of April 2015.
The CRB has been designed with five key objectives in mind, to streamline, clarify, modernise, deregulate and enhance consumer rights. Some of these key features are addressed below:
Consumer Rights Directive
The Bill will implement the EU Consumer Rights Directive (2011/83/EU) (CRD), for example, defining ‘goods’ and ‘digital content’ and provide default rules on the delivery of goods within 30 days.
Clause 2 CRB will provide definitions, such as ‘trader’, ‘consumer’, ‘goods’.
Rights and Remedies
In the event that a consumer’s statutory rights are breached, the Bill will enable the consumer to:
UCTA and UTCCRs
The Bill also looks to consolidate the existing Unfair Contract Terms Act 1977 (UCTA) and the Unfair Terms in Consumer Contracts Regulations 1999 (UTCCRs).
Parts of UCTA will remain where the Act specifically addresses issues outside of direct business-to-consumer contracts, however the UTCCRs will be revoked in their entirety.
‘Cooling off Period’
The CRB will provide an extended ‘cooling off period’ for distance selling (over the phone, via the internet or where a trader visits the consumer’s home), of 14 days where a consumer has bought away from a trader’s place of business; the ‘cooling off period’ is a CRD implement.
The CRB will enable industry trade associations to take representative action on behalf of members on competition law issues.
The motor industry has continuously expressed concerns over clause 24 of the CRB which provides for only one attempt by a trader to repair or replace faulty goods. The NFDA has been working alongside the Society of Motor Manufacturers and Traders (SMMT) and Finance and Leasing Association (FLA) to lobby the Houses of Parliament for amendment to clause 24, to include in the definition of ‘one repair or replacement’ a process of repair or replacement.
An amendment to the wording of clause 24 was tabled to this effect by Lord Clement Jones and discussed in the House of Lords on 15 October 2014. The NFDA, SMMT and FLA have also engaged in various discussions with other members of the House of Lords, most notably Baroness Neville-Rolfe, to see if guidance material accompanying the CRB and outlining the issue of ‘one repair’ could be improved to ensure an effective and fair outcome for consumers, without giving rise to unintended adverse consequences on businesses. These discussions have covered, for example, the possibility of a time ‘cap’ in the context of a ‘process of repair’, however, no consensus has been reached on this issue or how ‘one repair’ should be defined.
Notwithstanding this impasse, in response to concerns put forward by the motor industry, the Government has tabled further amendments to Clause 24 (10 December) specifically focused on the motor industry, which clarify a dealer’s right to make deductions for a consumer’s use of a vehicle in the event that it is ultimately rejected in the circumstances covered by Clause 24. If this amendment is adopted, it will be a positive development for dealers and, indirectly, consumers – as it will limit the risk of disputes, encourage sensible and efficient repair practices and foster balanced and fair outcomes.
The NFDA endorses the above amendment and, alongside colleagues in the SMMT and FLA, is encouraging all MPs to support and accept it during the Bill’s Ping Pong phase.
The NFDA is still, nevertheless, concerned by the potential consequences of Clause 24 and accompanying guidance failing to refer to a ‘process of repair’, and the problems this may create for businesses (and consumers) when repairing complex high value goods if left unresolved.
In the NFDA’s view, it is important that a solution is found which ensures consumers have clear and easy access to redress in the event of faulty goods. This is an absolute priority for franchised dealers. At the same time, the solution must recognise the increasingly sophisticated nature of the product in question and the need to promote fair and transparent market conditions which will continue to encourage investment and innovation. In this vein, the NFDA will continue to work vigorously alongside other automotive industry representatives to ensure the dealer voice is heard and that a proportionate and practicable solution is achieved.
Sue Robinson, NFDA Director Email: firstname.lastname@example.org 0207 307 9122
Katy Recina, NFDA Policy Officer Email: email@example.com 0207 307 3422