This article was originally published by Lexis PSL.
Commercial analysis: Will the Consumer Rights Act 2015 (CRA 2015) tighten up consumer notices? Louise Workman, partner, and Hannah Batten, solicitor at Ashfords LLP, consider the effect CRA 2015 will have on consumer notices.
What is a consumer notice?
A consumer notice is any notice that relates to rights or obligations between a trader and consumer or where the trader is seeking to restrict their liability. CRA 2015 states that a notice will include an announcement, whether verbal or in writing, and any other communication or purported communication.
CRA 2015 reforms the law on consumer notices. They were not expressly covered in previous legislation but they are specifically covered in CRA 2015. This brings them within the fairness regime. Businesses will therefore have to be conscious of the content which is included in notices and ensure that this complies with the fairness test.
Do you have any examples of where these are used, say, in store and online?
A consumer notice includes announcements and other communications intended to be read or heard by a consumer. This will include renewal notices, customer promotions, product terms and notices disclaiming liability of premises.
Software and digital products are sold subject to an end user licence agreement (EULA). Where the terms of the EULA aren't clearly part of the contract, they are also likely going to be subject to the unfair terms provisions of CRA 2015 as consumer notices.
What do lawyers advising traders need to think about now to ensure their clients' notices are lawful?
To ensure your clients' notices are lawful, they must be fair. Under CRA 2015, unfair consumer notices will not be binding on consumers. However, the consumer can still rely on the notice if they wish to do so. Unfair in relation to consumer notices is defined as causing an imbalance between the parties' rights and obligations to the detriment of the consumer.
To determine whether a notice is fair, a court will consider the subject matter of the notice and the circumstances existing when the notice was distributed. There is a grey list at CRA 2015, Sch 2 which lists examples of terms which may be considered to be unfair. It is not an exhaustive list but is indicative only. The terms of a consumer notice must all be transparent. Transparent is defined as legible and in plain and intelligible language.
An example of fairness given in the drafting notes to CRA 2015 is where a magazine subscription contains a term which allows a publisher to cancel on short notice. If a refund is offered by the publisher in these circumstances or there is a clause which allows the subscriber to also cancel at short notice, the court may consider that the term is fair.
Business Companion has produced suggested point of sale wording - how does this work?
Business Companion has produced point of sale wording that can be used to inform consumers of their rights regarding digital content. Any information given to consumers about their rights must not conflict with the rights under CRA 2015. If businesses use the suggested wording, they are more likely to be compliant with the new regime under CRA 2015.
CRA 2015 has made some key changes to the law on the supply of digital content to consumers. The rights provided are broadly the same as when a consumer is buying goods. However, a consumer will also have a statutory right to request a repair or replacement and, if a replacement is not supplied or cannot be supplied, there is a right to request a price reduction. The suggested wording reflects this position.
The wording also works to help businesses and sales staff to understand the new consumer rights and be informed of their responsibilities at point of sale and to ensure they can be clear with customers, for example, when asking for a refund. The point of sale information is also useful for businesses to assist them in implementing the changes under CRA 2015.
Aside from digital content, Business Companion has also produced point of sale wording on goods and services which works in a similar way.
What do you think will be the uptake of such wording?
The wording is a simple, plain English summary of CRA 2015 which has been agreed by business and consumer groups. It is useful for businesses to display to assist both staff and customers in understanding the actions and rights available when purchases are faulty or not up to standard and should help to clarify the new position regarding digital content under CRA 2015. Based on this, the use of this wording should get a fairly high uptake. However, businesses will need to exercise some caution as CRA 2015 does go into more detail than what is compressed into this short summary.