Business Law: Dermott Thomas highlights new rights of redress for consumers
- Credit: Archant
The Consumer Protection (Amendment) Regulations 2014 which came into force on October 1 2014 introduced new remedies for consumers against traders who use misleading or aggressive commercial practices, and a A new Consumer Rights Bill is also currently going through Parliament.
The Consumer Protection from Unfair Trading Regulations 2008 control the descriptions used between traders and consumers and create criminal liability for traders who breach them by unfair or aggressive practices. Under those regulations, however, consumers had no private right of redress against rogue traders.
The amendment regulations were introduced to give consumers important new private remedies against traders using misleading or aggressive commercial practices. They cover situations where a consumer enters into a contract with a trader to buy or sell goods or services to or from the trader and consumer payments. Importantly the scope of the mischief targeted has been enlarged to include civil recovery (such as wheel clamping charges).
A consumer must show they made the decision to contract (or make the payment to the trader) because of the misleading or aggressive practice. It must have been a “significant factor” in the consumer’s decision.
This new law is bound to create tension with what most people consider a legitimate aim of civil recovery. The amendment regulations only apply if the “average consumer” would have entered the contract or made the payment. However, vulnerable consumers are given special consideration in appropriate circumstances.
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The amendment regulations give consumers new standardised remedies against traders as follows:
1) The right to unwind the contract and get their money back if they complain within 90 days of delivery/performance of the service; or
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2) The right to a discount on the price paid where it is not possible to undo the transaction.
Importantly, there is no need for the consumer to demonstrate any loss. The standard remedies apply on a strict liability basis.
Where a consumer’s losses exceed the price paid for the goods or services in question, the consumer has a right to damages for any additional losses suffered as a result of the actions of the trader, including distress and inconvenience.
Unlike the standard remedies, consumers have to evidence actual loss to get damages. Traders also have a due diligence defence against claims for damages if they can show that they took all reasonable precautions to avoid committing misleading and aggressive practices.
: : Dermott Thomas is a partner at law firm Barker Gotelee.