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Guest opinion: Law change sees increased pressure on car dealers to 'fix first time'

Philip Harmer Stormcatcher 2015

In 1932 legal history was created when May Donoghue poured ginger beer from a bottle bought for her by her friend in a local café into a glass, accompanied by a “partially decomposed snail”.

In instances like Donoghue’s where the consumer didn’t have a contractual relationship with the retailer (because her friend bought the ginger beer) a claim could only be made against the manufacturer unless the product was “dangerous.”   

Anyway Donoghue pursued her claim against Stevenson, the manufacturer, to the House of Lords on appeal and won, making legal history.

However, rather than create a solution in consumer contract law, the premise seemingly developed to create a potential problem or, perhaps more accurately, an obstacle between the customer and the remedy - until now.

Currently in circumstances where, unlike Donoghue, the purchaser does have a contractual relationship with the retailer and goods purchased are found to be faulty, the retailer devolves all responsibility to the manufacturer.

If things go awry, the consumer returns to the retailer, the retailer makes a warranty or ‘goodwill claim’ to the manufacturer and subject to their agreement the repairs get carried out, in effect by-passing the retailer. 

If things become contentious the customer is left to the perils of an 0800 number requiring the patience of a saint and Herculean tenacity to permeate the realm of the manufacturer call centre. 

From the October 1, 2015, these hindrances will be no more.

If you sell it, you’re responsible for it.

This change of perspective has potentially hard hitting ramifications, putting the onus on dealers and retailers to get vehicles fixed first and try and claim off the manufacturer or warranty company later.

Failure to do so runs the risk of triggering claims for unreasonable delay and the nebulous significant inconvenience; which appears to reduce if not obviate the concept of ‘mitigation of loss’ and open up the possibility for standalone claims as opposed to being a corollary to claims for ‘repudiation’ under the Sale of Goods Act.

As a result dealers and retailers may be well advised to review their policy on customer service, vehicle recovery costs and courtesy cars, including the size and model range of their fleet.

Some are seeking advice on the inclusion of limitation clauses in their terms and conditions to try and ‘cap’ claims for financial loss and distress and inconvenience.  

While the motor trade faces a tumultuous 2016 they’re far from alone, with computer and home appliance retailers habitually expecting customers to contact and/or send it back to the manufacturer.

Whether or not the Consumer Rights Act will in reality reduce the £4 billion consumer detriment or merely lead to an increase in prices to accommodate the additional costs remains to be seen. 

Author: Philip Harmer (pictured) is a partner at Stormcatcher Motor Industry Lawyers. He is a practising lawyer, author and speaker on all aspects of employment, commercial and motor trade law.

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