On 23 January 2014, the Consumer Rights Bill, a bill "for a simple, modern framework of consumer rights" to quote the Consumer Rights Bill website, started its journey through Parliament.
Consumer law has not seen such a major overhaul in over 30 years, and has developed in a very piecemeal and confusing way ever since. The Bill seeks to address the Government’s concerns that consumer law is "unnecessarily complex, ambiguous in places" and out of touch with technological developments (parliament.co.uk). There are also numerous overlaps and inconsistencies between EU and existing UK legislation that it aims to resolve.
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In summary, the Bill:
- clarifies the standards consumers can expect when they buy something;
- introduces new rights in relation to digital content;
- sets out what to do when goods, services or digital content fail to meet required standards;
- clarifies the law relating to unfair terms and consolidates powers of enforcement and investigation;
- introduces easier routes for consumers to challenge anti-competitive behaviour;
- aims to reduce regulatory burdens for businesses.
The common perception is that consumers and businesses have struggled over the years to understand their legal rights and obligations in relation to consumer law and the Government believes this undermines competitiveness and growth in the economy as a whole.
It’s the Government’s view that reform of consumer rights will bring quantifiable net benefits, estimated to be around £4bn, to the UK economy over the next 10 years. Businesses should benefit by having fewer and less costly disputes with customers because rights are clearer. The revised regime should be much easier for businesses to navigate.At a time when the FCA is stressing the importance of putting the consumer at the heart of any business, it makes commercial sense for businesses to keep abreast of progress of the Bill. When the Bill eventually becomes law, consumers will be better protected and better informed than ever before. Businesses will need to be ready for a review of their terms and conditions and policies in general.
They should also be ready to check specific areas like their advertising material, disclaimers and exclusions and their standard sales practices (both online and offline) to ensure they remain compliant.Lenders in particular will need to ensure their contractual position with suppliers is correctly aligned to the provisions of the Bill once it becomes law.Particular focus for suppliers and asset-backed lenders are the onerous rejection provisions, essentially a consumer will have the right to reject the goods potentially for any reason, within a fixed 30-day period. The FLA is actively lobbying the Government on certain provisions contained within the Bill which place an onerous obligation on the finance industry, such as the early right to reject referred to above. The Bill was considered by the Public Bills Committee on 11 February and the Public Bills Committee is expected to report by 14 March.The Bill is expected to receive royal assent by the end of 2014.
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By GlobalDataJohn Perez is a partner with DWF
