Teaching them a Lesson:

Transcription

1 Teaching them a Lesson: Self-help and the new consumer rights 36 Bedford Row London WC1R 4JH T +44 (0) F +44 (0) E civilclerks@36bedfordrow.co.uk Web address Presented by Joe Spicer and Kevin Barry

2 CONSUMER REMEDIES Previously CPR s provided no private right of redress Consumers had to rely on complex civil law claims of misrepresentation etc. That has (finally) changed So what do consumers need to know?

3 CONSUMER REMEDIES Now four routes to redress: 1. Criminal enforcement, leading to a compensation order under S. 130 Powers of Criminal Courts (Sentencing) Act Civil enforcement under the Enterprise Act 2000, [with enhanced consumer measures including redress under Sched.7 the Consumer Rights Act 2015] 3. Negotiated settlement with trader 4. Civil right of redress under the CPUT 2008 Part 4A

4 In what circumstances may a consumer seek private redress? Only consumers who took a relevant transactional decision following a misleading practice or aggressive commercial practice can get private redress under the Regs. Reg 5: Misleading Action by the trader - provision of false information, or information likely to mislead the average consumer Pure omissions do not trigger redress, however omitting material information which creates a misleading overall presentation.amounts to a misleading action!

5 Reg 7: Aggressive commercial practices Whether trader has behaved aggressively is a question of fact Will depend on whether average consumer s freedom of choice has been significantly impaired The Regs set out Banned Practices leading to criminal liability (Sched 1) - not directly enforceable by consumers however behaviour falling into those categories will very often amount to either a Misleading Action or an Aggressive Practice

6 Transactional Decision The misleading or aggressive action by the trader must be at least a significant factor in the consumer s decision need not be main cause. Definition of Transactional Decision is extended to cover demands for payments from consumer in full or partial settlement of liabilities to the trader Regs now cover demands for payment to avoid prosecution e.g.: car clamping, and alleged illegal downloading of digital content Excluded sectors include: real estate, financial services, most credit agreements.

7 What types of transactions are covered? Three types of transactions can qualify: 1. Business to Consumer contract: consumer enters into a contract with a trader to buy goods or services from trader 2. Consumer to Business contract: consumer enters into a contract with a trader to sell goods to the trader 3. Consumer payments (Reg 27A(2) (e.g.: car clamping)

8 CONSUMER REMEDIES Effect on other law: No right to damages under Misrepresentation Act 1967 if right to redress under Part 4A CPR s. (r.5 CPAR 2014) No double recovery (r.27l CPUT 2008)

9 CPUT r.27k Right to bring civil claims (1) A consumer with a right to redress under this Part [4A] may bring a civil claim to enforce that right; (2) [Scotland] (3) Paragraph 4 applies if in proceedings under this regulation the consumer establishes that the consumer has: a) The right to rewind b) The right to a discount, or c) The right to damages (4) The court must give an order that gives effect to a) That right, and b) Any associated obligations of the consumer under this part

10 STANDARD REMEDIES AND DAMAGES Standard Remedies Consumer Right to unwind contract and get their money back Regs 27F, 27G, 27H CPUT Consumer right to discount on the price paid Regs 27H, 27I Damages Damages for detriment caused Reg 27J

11 STANDARD REMEDIES Allow consumer to recover the full price paid for the goods or services, or a percentage thereof Remedies apply on a strict liability basis If traders actions were misleading or aggressive, then the remedies apply No need to demonstrate loss No need to demonstrate that trader acted recklessly, dishonestly or negligently

12 STANDARD REMEDIES If exercising the right to unwind and return goods or reject service, they can also terminate the contract (Reg 27F(1)(a) Or can choose to keep goods or service, but request a discount The right to a discount does not release the consumer from other obligations under a contract, but the discount can apply to previous payments and to future ones

13 DAMAGES Damages remedy applies where consumer loss / detriment exceeds the price paid Cover damages for distress and inconvenience, and consequent financial loss However: need to show evidence of loss Trader has a due diligence defence in respect of damages where it can be shown that the trader took reasonable care to avoid committing misleading or aggressive practice

14 Reg 27E Right to unwind Business to consumer contracts When does the consumer have the right to unwind a B to C contract? Consumer has right to unwind where consumer indicates to trader that consumer rejects the product within the relevant period and at time when product is capable of being rejected Indication can be said or done by consumer but must be clear

15 Relevant period is 90 days from the day of: first delivery of goods performance of service begins digital content is supplied the lease begins right is first exercisable (as case may be) Cannot reject where goods fully consumed, service fully performed, digital content fully consumed, lease has expired, right has been fully exercised No right to unwind where consumer has already exercised right to discount in respect of that contract and the same prohibited practice

16 Reg 27F Right to unwind B to C contracts How it works Where right to unwind applies: contract comes to an end both parties released from obligations trader has duty to give consumer a refund where goods have been supplied, consumer must make goods available for collection

17 Reg 27F (cont ) Refund: money paid / anything transferred under the contract is entitled to be refunded NO REFUND if no payment or transfer under contract where contract for sale or supply on a continuous basis AND period on rejection is greater than a month then refund is the market price of product at point of rejection deducted from the amount paid UNLESS not appropriate to apply deduction having regard to traders behaviour and the impact of the practice on the consumer

18 Reg 27G Right to unwind How it works Consumer to business contracts Where right to unwind applies: Contract comes to an end both parties released from obligations Consumer entitled to either goods back or money Consumer must indicate to trader that contract at an end MUST BE CLEAR

19 Reg 27G (cont ) If goods still available in same condition then consumer has right of return of them and consumer repays any money received from trader (Reg 27F(5)) If 27F(5) does not apply then consumer entitled to difference in market price of goods and the amount paid by trader

20 Reg 27H Right to unwind How it works Where payments demanded that are not due This applies in respect of consumer payments falling within new Regulations 2 (1A) and 2 (1B) of CPUT, if consumer not required to make all or part of payment Consumer has right to receive back the same amount as money paid to trader or where part payment has been made, an amount equal to that part payment which was not required to be made

21 Reg 27I Right to Discount How it works Right to discount applies whether money has been paid under contract or not BUT not where right to unwind has been exercised Where payments have been made, consumer entitled to receive back from trader relevant percentage of the payments made Where payments not made, consumer has right to reduce by relevant percentage as many of the payments as is appropriate to the seriousness of prohibited practice OR where paragraph 6 applies all payments by relevant percentage

22 What is the relevant percentage of discount? If prohibited practice more than minor 25%; If prohibited practice is significant, 50% If prohibited practice is serious, 75% If prohibited practice is very serious, 100%

23 Right to Discount How it works (2) Reg 27I Determining seriousness (27I (5)) assessed by reference to: behaviour of the person engaged in the practice impact of the practice on the consumer the time that has elapsed since the prohibited practice took place

24 (6) BUT para (5) does not apply where: amount payable under contract exceeds 5000, the market price of product at time the consumer entered into the contract is lower than the amount payable under the contract there is clear evidence of the difference between the market price and the amount payable for it under the contract In such cases: amount payable is percentage difference between market price and amount payable under the contract

25 Reg 27J Right to Damages Right to damages (from the trader) accrues where consumer: has incurred financial loss which would not have been incurred if the prohibited practice had not taken place OR has suffered alarm, distress or physical inconvenience or discomfort which consumer would not have suffered if prohibited practice in question had not taken place

26 Right to Damages (cont ) Damages for financial loss do not include difference between market price of product and amount paid under contract Damages only payable in respect of loss reasonably foreseeable at the time of the prohibited practice

27 Reg 27J Right to Damages (cont ) No right to damages where the trader proves that: (a) occurrence of prohibited practice was due to: - i. a mistake ii. iii. Reliance on information supplied to the trader by another person The act or default of another person other than the trader iv. An accident, or v. Another cause beyond the traders control (b) The trader took all reasonable precautions and exercised all due diligence to avoid the occurrence of the prohibited practice

28 36 Bedford Row London WC1R 4JH T +44 (0) F +44 (0) E civilclerks@36bedfordrow.co.uk Web address