Important changes to UK consumer rights laws

01 Oct 2014
Two new pieces of legislation make significant changes to the contractual rights of consumers:

Consumer Protection (Amendment) Regulations 2014

From 1 October 2014, consumers have new rights against traders where:

  • they are caused harm by the trader's misleading action (but not a misleading omission) or aggressive commercial practice; and
  • this was a 'significant factor' in the consumer's decision to enter into the relevant contract

The new Regulations only apply if an 'average consumer' would have entered into the contract in the same circumstances. The Regulations have a wide reach - they apply to: (i) the sale or supply of; and (ii) demands for payment for the supply of products, goods and services (including digital content).

The Regulations provide new remedies:

  • the right to unwind the contract and claim a refund provided that the product hasn't been fully consumed and is rejected by the consumer within 90 days; or
  • the right to a discount the level of which, in respect of goods and services costing less than £5,000, will depend on the seriousness of the action/practice complained of. Different rules apply above £5,000 or where the consumer has paid more than market price.The consumer does not need to demonstrate any loss to take advantage of either of these remedies and doesn't have to establish that the trader acted negligently, recklessly or dishonestly. However, consumers must opt for one or the other of the above remedies. They can’t have both.
  • Consumers can claim damages where the consumer's losses exceed the price paid for the relevant goods or services. Damages can be claimed for both consequential financial loss (e.g. replacement or remedial works) and distress/inconvenience. The Regulations provide traders with a 'due diligence' defence in respect of damages (not the other remedies above). The trader will need to show that it had taken reasonable care to avoid committing the misleading or aggressive practice complained of.

These new regulations, combined with the Consumer Contract (Information, Cancellation and Additional Charges) Regulations 2013, have significantly increased the power of consumers. So, if you trade with consumers it may be time to revisit your terms and conditions, get them updated and ensure you have the maximum protection possible in your dealings.

The Department of Business Innovation & Skills has published guidance on how the Regulations will work. This guidance gives useful examples of behaviours and practices which are not permitted (including a 'blacklist' of practices which will always be considered unfair) and gives examples of how the remedies will apply in practice.