New consumer rights in force on 1 October—are you ready? (Part 1)

The first of October.

Most years a flurry of new laws come into force on this date. This year is no different.

So what is on the legal smörgåsbord this autumn?

Pickled herring? Beetroot salad? Crisp breads?

Not exactly.

But if businesses sell any of these products to consumers, be warned: from the 1 October, if traders mislead consumers or sell goods or services to them in an aggressive manner, rules will be in force which will give customers significant new rights of redress.

The new law applies to contracts involving consumers in almost all industries (and not just to purveyors of Scandinavian, buffet-style foodstuffs).

So what is happening from a legal point of view?

The Consumer Protection (Amendment) Regulations 2014 insert three new remedies into the Consumer Protection from Unfair Trading Regulations 2008.

This means that consumers who have been treated unlawfully, may be entitled, depending on the circumstances, to rely on some or all of the following significant new remedies:

  • right to a discount
  • right to unwind the contract, and
  • right to damages.

The first two are known as the ‘standard remedies’.

The last one, the right to damages, is not a standard remedy and is only available if a customer can prove that, for example, he or she has lost money.

In today's post, we will concentrate on the first new right. We will look at the other two rights in future posts.

The right to a discount

rigthtoadiscount

As the above graphic shows, there is a new sliding scale available to consumers where they may be able to obtain a discount depending on the severity of the trader's offending behaviour.

At this point, it is worth acknowledging that the word ‘discount’ is perhaps a bit confusing.

This term is typically used to denote when a business says ‘thanks’ to valuable customers; when it wants to encourage sales; or if it is keen to get rid of stock. It is usually given before any money changes hands.

However, the discount under this law would occur after the contract is entered into. It is effectively a post-event ‘rap across the knuckles’.

Our advice? It is probably best to think of the discount under this new regime as a rebate: something bad has happened and now the business is obliged to ‘cough up’.

How do I know whether something is, say, '25% bad' or '50% bad'?

Until there are cases on this, it is not easy to say.

That said, the government has published guidance on it, using the example of double glazing:

doubleglazing

(© Crown copyright 2014, reproduced under the terms of the Open Government Licence.)

So do consumers need to demonstrate any loss to the trader?

No. The rights apply even if no loss has occurred.

What's more, a consumer does not need to show that the trader acted dishonestly, recklessly or even negligently.

In other words, the right to a discount is a strict liability remedy. Even if a trader has moved heaven and earth to put systems in place to avoid falling foul of the law, this won't matter. There is no ‘due diligence’ defence.

That said, even if there is no defence as such, businesses would be wise to ensure that they do have proper and robust systems in place to comply with the law as, self-evidently, this should mean they do not fall foul of it.

This means understanding sales processes, changing them where necessary, and training staff properly about the new regime.

Don't forget...

Customers may have other rights too (ie a right to damages or to unwind the contract or both—we'll be posting more about those rights in the next few weeks).

And there is always the right of the relevant regulators to bring enforcement action. This hasn't changed.

So, there you go, lots to think about.

To be fair, most businesses that currently treat their customers well and with respect shouldn't have anything to worry about, although it is certainly a good idea for them to double-check their processes.

As for traders that treat their customers poorly? Well, I think we know the answer to that question.

If you have any thoughts on this or related matters, let us know and keep an eye out for out next post on the right to unwind.

Area of Interest