The Consumer Protection (Amendment) Regulations 2014 (“2014 Regulations”) come into force on 1 October 2014 (save for the provisions amending the Consumer Contracts Regulations which came into force on 13 June 2014). This marks part of a series of European backed changes to consumer law that have come into force since 2013 (the others being the Consumer Contracts Information, Cancellation and Additional Charges Regulations 2013 and the Consumer Rights Bill which, at the time of writing, is still awaiting its passage into law).
The main thrust of the 2014 Regulations is to amend the already existing Consumer Protection from Unfair Trading Regulations 2008 (“the 2008 Regulations”). The 2008 Regulations represented an attempt by the government to simplify the law relating to consumer rights and, in part, increase those rights. The 2008 Regulations amended the previous minefield of consumer legislation, repealing large parts of the Trade Descriptions Act 1968, the Consumer Protection Act 1987 and, in its entirety, the Control of Misleading Advertisements Regulations 1988.
The aim of the 2008 Regulations was to make unfair, misleading and aggressive trading practices, committed by an act or omission, “prohibited practices” within the meaning of the Regulations. For those traders or suppliers unsure of whether their practice may constitute a breach of these wide ranging provisions, Schedule 1 to the 2008 Regulations contains a ‘blacklist’ of 31 examples of conduct which would be considered prohibited practices under the Regulations. These range from a trader falsely claiming to be endorsed by an approved body, to employing intimidation tactics to secure a contract, to the setting up of pyramid or ‘Ponzi’ schemes.
There is nothing fundamentally wrong with the 2008 Regulations. In fact, one would find difficulty in immediately thinking of an underhand trading practice that the Schedule 1 ‘blacklist’ would not cover. However, the concern is that once a breach has been discovered, what rights of redress are available under the 2008 Regulations to consumers who have suffered loss because of a breach of those Regulations?
Before 1 October 2014, should a breach occur under the 2008 Regulations, then any action taken under these Regulations can only be taken by an association on behalf of the consumer. The two associations in this respect are Trading Standards and the Competition and Markets Authority (replacing the Office of Fair Trading from 2013). If a consumer wishes to bring an action privately against the trader who has committed an alleged breach under the 2008 Regulations, then their remedy would lie in one of the common law torts. However, it appears that some consumers, who have been the victim of bad trading practices, are often dissuaded from using the common law, as a form of redress, given that the remedies of misrepresentation and fraud, for example, can be fairly complex areas of law for the lay person to understand.
The 2014 Regulations give consumers the right to bring actions against the trader directly within the confines of the Regulations. The provisions are based on the requirements of the common law, but simplified so that in order for a consumer to bring a successful action they must prove the following:-
If a consumer is successful in proving the existence of the above, the Regulations make the following remedies available:-
The amendments made by the 2014 Regulations clearly fit the government’s policy of expanding consumer rights. In essence, the Regulations themselves are merely a codification of the already existing remedies available to the consumer under the common law, with the same principles applying i.e. damages are required to be reasonably foreseeable in order to be recoverable. Indeed the new Regulations do not supersede the common law and the aggrieved consumer can still pursue an action for misrepresentation, harassment etc. outside of the new Regulations. However, it is hoped that by codifying the available remedies in this way and attaching it to the substantive breaches under the 2008 Regulations, more people will understand the rights available to them as consumers. This, in turn, should further deter businesses from being tempted to adopt the prohibited practices defined in the 2008 Regulations.
As explained, the 2014 Regulations do not change the substantive law, which remains as it was under the 2008 Regulations. Therefore any advice with regards to the impact of the 2014 Regulations should necessarily encourage continual compliance with the 2008 Regulations. This is now more important than ever for traders and suppliers given that the effect of non-compliance is more likely to result in a claim being brought against them as a result of the remedies that the 2014 Regulations now provide.
As under the common law, the burden of proof will be on the consumer to establish any claim, over which the standard six year limitation period will apply.
The 2014 Regulations are drafted as amendments to the already existing 2008 Regulations, as opposed to being a form of stand-alone legislation. Clearly the applicability and scope of the new Regulations will be tested in due course by case law arising out of it, but there are a number of aspects of the Regulations which may be cited as concerns, in the first instance:-
Striking a balance between effective consumer rights and protecting against abuse of the position of traders is a difficult one. Knowledge is power, and whilst making consumers aware of their rights can only be considered a positive step, this inevitably increases the opportunity for some consumers to attempt to work their way out of contract by alleging bad practice simply because they have decided, in hindsight, that a better deal could have been had elsewhere. It will be interesting, however, to see the overall effect the 2014 Regulations have particularly working alongside the Consumer Protection Bill which, if passed through Parliament, should mark a new age of consumer power.