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Guest opinion: the impact of the Consumer Rights Bill

Author: Philip Harmer (pictured), senior partner and international commercial arbitrator at Stormcatcher LLP and head of SCAS.

"The Consumer Rights Bill is expected to gain Royal ascent and become national law in October next year.

At first glance the Consumer Rights Act 2014 (as it will be known) doesn’t seem to be much more than a house keeping exercise, consolidating half a dozen pieces of existing legislation into a single statute; creating a ‘one stop shop’ for consumers.

But as ever, the devil is in the detail and logic dictates that ‘curing’ the consumer detriment which previous incarnations have failed to do, will require more than an administration exercise and that somewhere the new law has to have some bite; empowering consumers and guiding retailers.

The key ‘changes’ are not really changes at all, but a simplification and codification of existing remedies for breach of contract, which were previously almost exclusively the purview of lawyers, as follows;

1) short term right to reject (within 30 days)
2) right to repair or replacement
3) right to a price reduction or the final right to reject

What does seem to be clear is the intention by law makers to mitigate the 'moral hazard' which allows, or incentivises,  the sale of substandard or faulty goods, products and services’, relying on warranties and/or care plans to sort out prospective and/or latent problems.

The consecutive nature of these consumer remedies means problems aren’t going away. Just because a customer hasn’t exercised their rights under the short term right to reject, doesn’t mean  they can’t exercise the right to repair or replacement.

In turn this does not preclude the ultimate right to a price reduction or rejection.

While this will understandably send shivers down the spines of dealers throughout the country, it will provide a way for customers to make qualitative decisions between used cars and dealers which is currently almost impossible. 

As a result, currently price is the central influencer in customer decision;  making, allowing or propagating a subordinate market where one should not exist.

In simple footballing terms: Raise your game, play by the rules and your business will be promoted and grow, or stay the same and get relegated."



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