Consumer contracts and cancellation rights: Allpropertyclaims v Tang

What does the decision in Allpropertyclaims v Tang (29 June 2015, unreported) mean for the enforceability of consumer contracts?

Below are extracts of our recent interview with Russell Kelsall, partner in the litigation and financial services practice group at Squire Patton Boggs (UK) LLP, who comments on the judgment and the issue of cancellation rights in consumer contracts, particularly under the Cancellation of Contracts made in a Consumer’s Home or Place of Work, etc Regulations 2008 (CCCH Regulations)*.

The case shows how vital it is to get the technical side of things right when contracting with consumers.

What is background to this case?

Allpropertyclaims Limited (APC) is an insurance claims management business. Mr Tang suffered water damage at his home and wanted to make an insurance claim. APC visited Mr Tang at his home. APC contracted with Mr Tang to deal with his insurance claim for him. Mr Tang’s insurers dragged their heels and were not co-operative with APC. In the end, Mr Tang got frustrated with APC and dealt with the resolution of his insurance claim on his own without any further involvement from APC.

The terms of the contract between APC and Mr Tang were that he agreed to pay APC £140 per hour for their services if he ended the contract. After Mr Tang terminated the contract, APC sued Mr Tang for what it claimed was due under the contract. APC calculated that this sum was £5,000. Mr Tang refused to pay APC anything. Mr Tang said APC had not complied in full with all the technical requirements of the CCCH Regulations and, correspondingly, that he had a complete defence to APC’s claim.

What do the CCCH Regulations say?

The CCCH Regulations implemented the Doorstep Selling Directive 85/577/EEC which is designed to protect consumers in respect of contracts negotiated away from business premises. The Doorstep Selling Directive provides cancellation rights for contracts made in similar circumstances during an unsolicited visit by a trader.

In particular, the CCCH Regulations, reg 7(2) deals with a consumer’s right to cancel. It provides that a trader must ‘give’ the consumer a written notice of his right to cancel the contract and such notice must be ‘given’ at the time the contract is made.

What were the key issues in this case?

There are two key issues in this case:

• was emailing the cancellation rights to the consumer sufficient to amount to ‘giving’ the consumer notice of his rights?
• where the cancellat