The Consumer Rights Act 2015: getting your business ready. Mark Dewar Robert Allen

Transcription

1 The Consumer Rights Act 2015: getting your business ready Mark Dewar Robert Allen 14 May 2015

2 The Consumer Rights Act 2015 What New rules - new challenges New risks - new threats When 01 October / B_LIVE_EMEA1: v1

3 New rules, new risks Test of Transparency Test of Prominence Consumer notices Enhanced consumer measures Collective actions Contract terms Statutory rights and remedies Digital content 2 / B_LIVE_EMEA1: v1

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5 CRA 2015 application Applies to contracts entered into on or after 01 October 2015 Existing contracts Existing rules CRA not retrospective But variations of existing contracts? If enough variation to make a new contract, CRA applies Not our words, the words of BIS Anti-avoidance tactic in guidance Variation risk Will consumers challenge on the basis of better CRA rights? Case by case for courts to decide? 4 / B_LIVE_EMEA1: v1

6 Current regime for contracts & notices 5 / B_LIVE_EMEA1: v1

7 CRA 2015 regime for contracts & notices 6 / B_LIVE_EMEA1: v1

8 Contracts and notices Consumer contracts Negotiated and standard Test of Fairness Test of Transparency Test for core exemption on price/subject matter: Transparent & Prominent Consumer notices Negotiated and standard Test of Fairness Test of Transparency No core exemption No Grey List Three new Grey List Terms Penalty fees on termination Post-contract changes to subject matter Post-contract discretion to change prices 7 / B_LIVE_EMEA1: v1

9 Test of Transparency Not just plain and intelligible language ECJ imposing further duties Starring the Average Consumer Line of ECJ cases on Unfair Terms Directive Invitel, RWE Vertrieb, Kasler, Matei and now Van Hove Transparency Core exemption (price/subject matter) Can an Average Consumer foresee and evaluate the future potential economic effects on him? Average Consumer has lower level of scrutiny when entering suite of related contracts (Van Hove) Very challenging and demanding obligations Apply to UTCCRs and CRA 8 / B_LIVE_EMEA1: v1

10 Test of Prominence Core exemption (subject matter/price) Prominent if brought to consumer s attention in such a way that an Average Consumer would be aware of term Who is the Average Consumer? He is reasonably well-informed, observant and circumspect But he doesn t always read everything (CMA Draft Guidance) CMA Draft Guidance indicates challenging and demanding Test Awareness = AC can make an informed purchasing decision CMA (draft) vision of Test: Demanding layers of prominence Different levels for different levels of risk More if onerous or unusual term 9 / B_LIVE_EMEA1: v1

11 Consumer notices What is a consumer notice? Applies to a notice to the extent that it relates to rights or obligations as between T and C, or purports to exclude or restrict T s liability to C Not exhaustive definition Definitely will include End User Licence Agreements Anything that is not a contract term EULAs on regulatory radar Digital content Website terms of use CMA Draft Guidance suggests will apply Grey List 10 / B_LIVE_EMEA1: v1

12 Contract terms Rules for services in CRA Information about trader or services to be binding Oral or written From you or your agent Relied on by consumer to enter contract, or to make decision after entering Will be treated as contract terms Vary only if both parties agree Cannot exclude liability but can restrict But not less than contract price Practical challenges Scripting and marketing style Disputes over what was said 11 / B_LIVE_EMEA1: v1

13 Enhanced consumer measures Schedule 7 of CRA Amends Part 8 of Enterprise Act 2002 Who can impose? Public enforcers (Ofcom, CMA) Private enforcers (Which?) in future Measures to compensate consumers Option to terminate (but not vary) contract Compensation payments Measures to promote switching Measures to improve compliance 12 / B_LIVE_EMEA1: v1

14 Collective actions Schedule 8 of CRA Amends Competition Act 1998 Reform of UK regime for private actions for anti-competitive behaviour New collective proceedings regime Opt-in and opt-out Opt-out regime Automatically in, unless actively opt-out Future US style class actions? 13 / B_LIVE_EMEA1: v1

15 Consumer statutory rights Goods, services and digital content Goods Statutory right that comply with model Services Information about trader or service binding if consumer relies on it Digital content 14 / B_LIVE_EMEA1: v1

16 Consumer statutory remedies Services Right to repeat performance Right to price reduction Goods Short term right to reject within 30 days Poor installation of goods = remedies for goods (not services) Faulty digital content in goods = remedies for goods (not digital content) Digital content 15 / B_LIVE_EMEA1: v1

17 Digital content Data produced and supplied in digital form Downloaded (apps) or streamed Paid or bundled Must be a contract Paid Satisfactory quality, fitness for purpose and description Remedies of repair, replacement, reduction in price Free and paid Damage to device rule Because T was negligent Compensate or repair damage to consumer s device or other digital content Regular virus checks 16 / B_LIVE_EMEA1: v1

18 Also on the horizon Alternative Dispute Resolution for Consumer Disputes (Competent Authorities and Information) Regulations July 2015 Rule against penalties Parkingeye v Beavis in Court of Appeal Supreme Court this summer? 17 / B_LIVE_EMEA1: v1

19 Key Contacts Mark Dewar Partner Robert Allen Partner Sign up to elexica and receive TMT legal updates and resources: elexica.com FFollow us on 18 / B_LIVE_EMEA1: v1

20 The Consumer Rights Act 2015: getting your business ready simmons-simmons.com This document is for general guidance only. It does not contain definitive advice. SIMMONS & SIMMONS and S&S are registered trade marks of Simmons & Simmons LLP. Simmons & Simmons is an international legal practice carried on by Simmons & Simmons LLP and its affiliated practices. Accordingly, references to Simmons & Simmons mean Simmons & Simmons LLP and the other partnerships and other entities or practices authorised to use the name Simmons & Simmons or one or more of those practices as the context requires. The word partner refers to a member of Simmons & Simmons LLP or an employee or consultant with equivalent standing and qualifications or to an individual with equivalent status in one of Simmons & Simmons LLP s affiliated practices. For further information on the international entities and practices, refer to simmonssimmons.com/legalresp. Simmons & Simmons LLP is a limited liability partnership registered in England & Wales with number OC and with its registered office at CityPoint, One Ropemaker Street, London EC2Y 9SS. It is authorised and regulated by the Solicitors Regulation Authority. A list of members and other partners together with their professional qualifications is available for inspection at the above address. 19 / B_LIVE_EMEA1: v1

21 elexica resources relevant to this session Listen to our Dealing with Consumers 2015 conference calls on key parts of the Consumer Rights Act 2015 Visit the Events page for forthcoming seminars and training days and the Training page for video recordings, podcasts and slides Request a demo Contact elexica@simmons-simmons.com or speak to your usual Simmons contact to find out more. 20 / B_LIVE_EMEA1: v1