Consumer Rights Act 2015 – 2 Services & Digital Content

From 1st October 2015 there are fundamental changes to consumer rights introduced under the Consumer Rights Act 2015.  This Act replaces almost all existing consumer protection legislation.   It introduces significant new concepts and protections for consumers.  All businesses should be reviewing their Terms of Business for consumers, their procedures and staff training.

We are posting a series of brief summaries of the changes, highlighting their significance, and with links to further advice.  This is not intended to be legal advice upon which you should act, but awareness of issues which you need to consider.

For legal advice please contact Neil Howlett or Andy Hambleton

The legal standards and remedies for Services

As with goods, there is no fundamental change in the test for the quality of services, which must be provided with “reasonable care and skill”.

However, there are new specific remedies for services

  • Not performed with reasonable care and skill
  • Not performed in line with information given about the service.
  • Not performed within a fixed time given by the trader or within a reasonable time.

If services are not performed within the fixed time or a reasonable time, the consumer can demand a price reduction but cannot demand performance.

Where services are not performed with reasonable care or skill or in line with information given about the service the consumer can require repeat performance at the trader’s expense.  This must be within a reasonable time and without significant inconvenience to the consumer.  The trader can only refuse if it is impossible to re-perform the service.

The consumer can claim a price reduction at the consumer’s option.  There is no guidance on how to calculate the price reduction, but the Act does state that it may be the full price.

Consumers still retain a residual right to claim damages at Common Law (and also but less likely for Specific Performance).  The consumer also has the right to terminate a contract if there is a fundamental breach at any time.

Traders will also have to take into account the rights of Consumers to use ADR schemes.

See Business Companion – Services

Digital Content

In addition to goods and services the Consumer Rights Act introduces new rights for consumers purchasing digital content (including where no payment is made by the consumer).

Traders are obliged to use a reasonable skill and care, i.e. not to allow an App to be released unless it has been fully tested.

Where digital content is non-conforming, applying the test for Goods, the Consumer has a right to repair, replacement, a price reduction or refund.  The Consumer cannot reject digital content because it cannot be returned.  Traders are entitled to more than one attempt at repair or replacement.

The major new risk for suppliers of digital content is that if a consumers device or other digital content is damaged as a result of the traders digital product being non-conforming the consumer will be entitled to the repair of the damaged caused or compensation.  As that may be difficult to calculate and may be substantial traders should consider the availability of insurance against this risk.

See Business Companion- Digital