Documente Academic
Documente Profesional
Documente Cultură
This article was first published on LexisPSL Commercial on 15 April 2014. Click here for a free trial of LexisPSL.
Page 2
The consumer can also claim damages for any additional losses or harm they have suffered as a result of the misleading or aggressive practice or for alarm, distress or physical inconvenience or discomfort. Although only damages that are reasonably foreseeable are recoverable. Under the new Regulations there are certain conditions that must be met for the consumer to claim any redress: o o o they must have entered into a contract (so adverts are not sufficient) they must show a misdealing or aggressive practice has been carried out (as defined in the existing CPUT) and that it is likely to cause the average consumer to enter into the contract they must show that the prohibited practice was a 'significant factor' in the consumer's decision to enter into the contract or make a payment
There are only very limited circumstances in which a deduction for use (from the refund) may be granted by the courts--ie only where services or goods are provided continuously for a month, such as a utility. In that case, the market price would be deducted from the price the customer paid for it. Finally the Regulations make it clear that there is no right to double recovery--so if the consumer has already been compensated under another law or equity they cannot claim under the Regulations and vice versa.
To what extent is the legislation helpful in clarifying the law in this area?
It is helpful in clarifying the law in a number of ways. Where remedies may previously have been unclear, these have become more standardised which can only provide more clarity to consumers and practitioners. I think the new rights make it clearer and simpler for consumers to take their own action in the civil courts, so the law should shift from public prosecutions to more consumers exercising their rights and taking action themselves. Also, at the moment, businesses (and practitioners) have to grapple with two different systems--both public regulation under the existing Consumer Protection Regulations and private rights of redress under misrepresentation and undue influence etc which use different terminology and concepts. The amendments will help to align the public and private systems more. Obviously, consumers can still bring claims under the existing doctrines of duress etc so the Regulations will not completely eradicate this but hopefully if more consumers use this right of redress it would reduce the need to refer to those existing laws. However, the effects of these amendments will depend on how well these new rights are publicised and made known to consumers. Changing the law is one thing, but I think the greater issue is the existing problem of a lack of consumer awareness--most people simply do not know what their rights are and so do not pursue them. Unless this changes, the Regulations may have little impact in practice despite the greater clarity and rights for consumers.
Page 3
It's also important to note that the burden is on the consumer to establish their claim. Ultimately though, these measures are part of a whole host of reforms that the government is making to consumer legislation. The Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013, SI 2013/3134 come into force on 13 June 2014 which (among other things) require businesses to be very clear about any and all charges payable by the customer, require express consent to such additional charges and remove the use of default/pre-ticked options. The Consumer Rights Bill will add even greater protection and clarity. Practitioners should already be aware of these changes and the even greater importance of ensuring that businesses are transparent and fair when dealing with customers.
Do you envisage any practical or technical difficulties or unintended consequences arising from the legislation?
I don't believe there are any significant unintended consequences although there are a few minor technicalities about the new legislation that may cause some confusion when first implemented. The Law Commission initially suggested that the legislation be drafted as stand-alone legislation. However, the government has chosen to implement it as part of the existing consumer protection Regulations and this adds a layer of complexity. For example the new rights refer back to existing CPUT provisions when defining aggressive and misleading practices and it isn't clear in the new section itself that the test for determining such practices will be an average consumer test. Also some of the definitions that have been introduced are slightly different in the new section to those that apply to the rest of the CPUT. The scope of the new section is also slightly different to that under the existing CPUT, eg it does not cover misleading 'omissions' (which the rest of the CPUT does) Another area that may give rise to confusion is that there are two different types of test.: o o when establishing whether something was a 'prohibited practice'--the test is an objective average consumer test, but when deciding whether it was a 'significant factor' in the customer's decision--the test is subjective
And lastly, the level of discount that may be awarded depends on whether the practice was deemed to be 'more than minor, significant, serious or very serious'. The Regulations do not define these terms (although the government has stated that they will provide guidance on this point). I expect that there will be concerns from a business perspective too. For example that spurious claims may increase, which will take time to manage, and also regarding the 90 day right to unwind which allows the customer to reject a product even if it has been used (often with no allowance for usage). I think it will be interesting to see how the courts will enforce the new rights. It is one thing to protect consumers against these misleading or aggressive practices. It is another thing to step in where a customer has simply made a bad deal and the line between the two may be difficult to establish. Interview by Fran Benson. The views expressed by our Legal Analysis interviewees are not necessarily those of the proprietor.