Online dispute resolution platform postponed

Businesses were supposed be ready to implement the new laws on online dispute resolution (ODR) by adding a link to their websites, and online ordering systems by 9th January 2016. The Department for Business, Innovation & Skills (BIS) has issued a statement delaying that which says :

‘We have been informed by the European Commission that due to a number of other member states not being in a position to implement the requirements of the ODR Regulation by 9 January, the ‘go live’ date of the platform has been delayed to 15 February. Businesses will now not be required to carry a link to the ODR platform until it is launched on this new date of 15 February.

‘We recognise that the decision to delay is not ideal as a number of businesses and consumer organisations have been gearing up for 9 January. However, we also acknowledge that as we have not been able to provide you with a link to the platform the six-week delay will give additional time to get ready for its introduction.

‘We can reassure you that although the date of 9 January remains in our Regulations, we fully understand that it will not be possible for businesses to meet this date as the ODR platform will not yet be launched. There will of course be no question of enforcement action before 15 February.’

See the ‘Alternative dispute resolution’ guide which has been updated to reflect these developments, and diarise for early February in the hope we will know more then.

Consumer Rights Act 2015 – 4 Off-Premises and Distance Sales, Variations, and Timing

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.

See the guidance issued by Business Companion – the sale and supply of goods from 1 October 2015.

For legal advice please contact Neil Howlett or Andy Hambleton

Variation of Terms

It will be much more important for traders to obtain the agreement of the customer before delivery to any changes in the goods to be supplied.  There is draft CMA guidance allowing minor technical adjustments or changes required by law or necessity which can be or not real significance to the consumer.  However, traders may have still an obligation to inform consumers of such changes.

If there is the likelihood of a need to make changes between the date of the contract and delivery it may be possible to do so fairly if the possible variation is clearly described, there is a valid reason for it, and the consumer will be given notice in advance and the right to cancel.

In principle a trader may be able to change any terms provided that the consumer is given the right to terminate without being left worse off, although traders will need to be wary of anything that may give rise to a claim for breach of contract and civil damages.

Timing and Delivery

Goods must be delivered without undue delay and in any event not more than 30 calendar days after the date of the contract, unless that period is varied by agreement.

Services must be performed within a reasonable time, which is a question of fact in each case, unless the time or a method for fixing the time is set out in the contract.

On-premises and Off-premises contracts.

One element of the current law not brought into the Consumer Rights Act is the requirement for giving Notice of Cancellation Rights for Off-premises contracts.  These remain the same as before.

See Business Companion – Consumer contracts – off-premises sales

Distance Selling

The Consumer Rights Act has not changed the law of Distance Selling – the sales of goods, services and digital content without face-to-face contact with the customer. This includes sales online, by mail order or by telephone. In our experience many websites are not compliant with this law.

See Business Companion – Distance Selling

Consumer Rights – all change again . . .

In May 2014 we wrote about the new Consumer Contracts Regulations. Consumer law is set for a major change later this year, and all traders dealing with consumers will need to prepare for that.

The Consumer Rights Bill is currently before Parliament. This will implement the EU Consumer Rights Directive and codify consumer law that is currently set out in a number of fragmented (and sometimes inconsistent) pieces of legislation, some of which date back to the 1970s. In particular, it introduces consistent definitions of key concepts (such as who classifies as a ‘trader’ or ‘consumer’), introduces new statutory rights and remedies for consumers, and updates and modernises the law, in particular for the digital economy.

The Bill sets out a series of tiered remedies for the consumer in the event the consumer’s statutory rights are breached. These comprise:

  • A short-term right to reject the goods, lasting 30 days. If the consumer requests that the goods be repaired or replaced (see below), this is extended by the time taken to repair or replace) or 7 days from the date of return (whichever is longer);
  • The consumer may also require the trader to repair or replace the goods at the trader’s cost, and within a reasonable time and without causing significant inconvenience to the consumer (unless this would be impossible, or the costs required would be disproportionate compared to the consumer’s other remedies).
  • If the trader refuses to repair or replace the goods or is unable to do so at the first attempt, or if the consumer cannot enforce this right as it would be impossible or disproportionate, the remedies move on to the next tier;
  • The next tier is a right to an appropriate price reduction (up to the full price paid by the consumer), or a final right to reject. The final right to reject is subject to a right of deduction for use, to take into account the use the consumer has made of the goods since they were delivered.

The Department for Business, Information and Skills (BIS) intends that the Bill will come into force on 1 October 2015 and intends to publish guidance on the Bill in April 2015. This will give businesses six months’ notice to make the changes required to inform consumers of their new rights in relation to faulty goods, services, or digital content.

The primary source of information will be the Trading Standards Institute Business Companion website, which will present general advice and also more detailed advice on the law.

Businesses will need to plan to review and update their terms and conditions for consumers once the Bill is passed and the Guidance issued, and review their sales processes and staff awareness so they are ready for the planned implementation in October 2015.

Contact: Neil Howlett

New Consumer Contracts Regulations

On 13th June 2014 the law changes on consumer contracts and distance selling. The Distance Selling Regulations and the Doorstep Selling Regulations are replaced by The Consumer Contracts Regulations 2013. The concepts remain broadly the same, but the difference is now between “on-premises”, “distance” and “off-premises” contracts. This doesn’t apply to commercial contracts or to normal over the counter shops sales where the customer takes the product away, and there are a series of exemptions.

There are new obligations which apply to all consumer contracts. These include:

  • Traders must, unless the consumer agrees otherwise, deliver any goods purchased within 30 calendar days.
  • Traders must not make the consumer use a premium rate telephone line to contact the trader about an existing contract.
  • Traders must not impose excessive payment surcharges when consumers pay by certain means, such as credit or debit cards.

There is a set of basic information that has to be given to all consumers for all contracts, plus enhanced information that has to be given for “distance” and “off premises” contracts. The definition of “distance” is complex, requiring “an organised distance sales or service-provision scheme . . . with the exclusive use of one or more means of distance communication up to and including the time at which the contract is concluded”. A trader selling via a scheme offered by a third party, such as an online platform is selling via an organised distance sales or service provision scheme. “Off premise” contracts may include contracts concluded at business premises if that followed an offer made at or is immediately after an “off premises” meeting. For these the Regulations:-

  • Extend the list of pre-contract information that a trader must give to a consumer (there are some differences between distance and off-premises contracts).
  • Introduce new rules on the cancellation of contracts for the supply of digital content not on a tangible medium.
  • Extend the statutory cancellation period (sometimes known as the cooling-off period) to 14 calendar days.
  • Where a consumer has a right to cancel a contract, require the trader to provide the consumer with a model cancellation form.
  • Extend the cancellation period to, broadly, one year if the trader fails to provide certain pre-contract information.
  • Require online traders to make it clear (for example by labelling the payment button with “Order with obligation to pay”), where proceeding with the transaction will trigger a payment.
  • Require a consumer to return goods within 14 calendar days of cancelling the contract.
  • Allow the trader to withhold a refund until the goods are returned (or evidence of their return is provided).
  • Allow the trader to deduct an amount for the diminished value of the goods when refunding payments.
  • Extend the list of ancillary contracts which will be automatically terminated on termination of a distance or off-premises contract.

This is a good time to check your contracts and processes comply. BIS has published Implementing Guidance which is worth reading to see if and how this will apply to you. However, we can’t understand how BIS can claim their horribly drafted Cancellation Notice complies with the Unfair Terms in Consumer Contracts Regulations 1994, which say that terms in consumer contracts must be in “plain and intelligible language”. Traders will have to make a decision whether to go for safety and use the BIS version or redraft it so that their customers might actually understand it. If you need it we can help.

Contact: Neil Howlett

New Year’s Resolutions

When Frome Chamber of Commerce ran the first year of Discuss & Do events for entrepreneurs Johnny Martin was one of the speakers, as well as doing his usual seminars at The British Library.

His newsletter this month says :
“January can be a pretty tough month for trading after the hump of Christmas – unless you happen to be a fitness coach or selling diet supplements…so as well as reviewing your marketing plans, use the time to make sure you have all your business arrangements properly documented.  In my experience more cash is lost because of unclear and undocumented business arrangements than any other reason.”

As lawyers you’d expect us to agree, but sadly it’s true. New contracts don’t have to be expensive. We can review what you have; if it is satisfactory we will tell you, if we think it needs upgrading we can do that and will give you a price for that.

If you’ve got a slow period post Christmas here’s something useful you can do that will pay dividends.

If we can help please contact us.

If you want to see more of what Johnny has to say (he’s not a lawyer) see his blog.

Social Media at Work – Who owns it?

Social Media accounts may be an important part of a business model. They will be part of the way a business communicates with customers and potential customers and the image the business presents to the world. They can be a valuable asset. They can also be used to damage a business’s reputation or to steal its customers.

Who owns social media accounts as between and employer and an employee? The lawyers answer is that this should be defined in the Employment Contract. In reality that doesn’t always happen. Many employers are willing to allow junior employers to set up accounts because they know how. They may monitor them, or not. They may not systematically collect logins and passwords.

So what happens when an employee leaves and none of these in place? All is not lost for the employer. In a recent case the High Court ordered one former employee of a publishing company to hand over business cards he had collected whilst an employee, and another to hand over the access details for LinkedIn groups that she had managed. Both ex-employees had taken steps while they were still working to set up a company whose business model was similar to their employees, persuaded other staff to leave and used the cards and LinkedIn groups to contact customers of their former employer. The employee who ran the LinkedIn groups claimed they were “personal”, which was rejected as they were done at work, and the employee who had the business cards was alleged to have purchased software to download them all before handing them back.

The judge did not have any difficulty in finding that there was a strong case that the employees had breached their duties of good faith before leaving. Having done that the judge granted the employers a “springboard injunction” to restrict the employees’ activities in their new business in such a way that they gained no unfair competitive advantage from their wrongdoing. That was effective immediately, and will last until a full trial. In most such cases the parties having had a first experience of litigation settle out of court.

Such “springboard injunctions” are well established, though not cheap to obtain. Employers need to find evidence of the employees’ wrongdoings, which here was fairly easy as they hadn’t covered their tracks. That’s why lawyers, if asked, will always advise employers to cover these issues in contracts, handbooks and policies, and also to negotiate post termination restrictions for key staff.

For advice please contact Neil Howlett or Andy Hambleton.

Can you trust legal advice on the internet?

There are some very good resources on the internet.  For instance, I often refer people to www.acas.org.uk for information about employment law.  The internet is an easy way for an organisation to publish information to a wide audience, which can be accessed 24 hours a day.   However, as with any publication, on the internet or elsewhere, the key questions are who is producing it and why.

Some years ago, when the internet was bright and shiny, Yahoo was a market leader and I was an “early adopter” I was asked by the Internet Newsletter for Lawyers to review the largest set of forms published on the internet for consumers to use, which was being made available through Tesco.   I looked at a small selection, in an area in which I knew what I was talking about.   I was very surprised to find that several of the forms were out of date, had incorrect statements of the law and were valueless.

A lot of “free” legal resources are primarily marketing tools.  Ask yourself who is providing the service and how are they paying for it.   That doesn’t have to be simply getting you to sign up for legal services, which may well be more expensive than using a solicitor.  In many cases these won;t be provided by the name on the Homepage but contracted to third party; Saga doesn’t provide legal advice, it comes through the Sga site from Paribas. Sometimes sites like this are basically adverts for claims management companies.   For instance, Law on the Web  is ultimately owned by DAS, a large insurance company, through a company that also owns a PPI claims management business.   The business model is opaque, but appears to be based on referral fees.

Although the site says prominently that it is “featured in” the Observer, a review of its advice on Evicting Tenants in the Guardian suggested that it was both wrong and out of date.   Do you have any remedy if you follow their advice?   Have you read their small print which excludes their liability for just about everything?    Although the front of the web site shows a serious looking man who used to be a solicitor, the Terms & Conditions make it clear that “the Proprietor is not a legal advisor” and that “none of the content of the Website is intended to be taken as advice or recommendation, professional or otherwise, and should not be relied upon by you in reaching any decision or conclusion”.   That rather raises the question what you can use it for?  Answers on a postcard please.

Their documents are “fully legally approved” but they disclaim any responsibility for their use – indeed they say “our online legal guidance can be very helpful, and it is certainly worth perusing it carefully before deciding to take the extra step of seeking professional legal advice.  However, reading about the law can never compare to truly knowing the law and having the guidance of an experienced solicitor…..”.  [my emphasis]

Neil Howlett

 

 

 

Dismissal for Comments on Facebook

Employees often fail to understand that comments made on social media are not always “private”.

When an employee in a call centre posted a number of obscene comments about a female co-worker on Facebook from home, he also mentioned the name of his employer.  A member of the public with access to his Facebook posts informed the company. The employee was dismissed for breaching the company’s policies on harassment and for bringing the company into serious disrepute. [Read more…]

Who are you doing business with?

Before you make a contract you should be confident that the other party is capable of completing their commitment.  That’s “Due Diligence” which, for a big contract, can be complex.  For any contract the essential is that you know who you are doing business with.  If things go wrong you need to know who you can complain to or, if you have to, sue.  You should give your customers confidence in you by making it easy for them to confirm who you are.

There are rules about this.  It’s right to be suspicious of businesses that don’t meet these rules.  They may just not be very competent administratively (which may be a risk) or they may have something to hide.  Rogues are experts at making it difficult to find out who you are actually contracting with.  That’s fundamental to any business relationship.

Whether your business is trading on-line or not, it is almost certainly affected by the E-Commerce Regulations.  Unfortunately a lot of website designers seem to be ignorant of them.  BIS issue a Guide on Compliance.

Similar rules apply to all business communications, i.e., letters, order forms, emails etc.  There is also a rule that the registered name is displayed at any location at which a company or LLP carries on business (unless used primarily for living accommodation).  For companies see The Companies (Trading Disclosures) Regulations 2008 2008/495 in force since 1st October 2008.

Those for partnerships they are slightly complicated;

  • Partners names do not have to be given where you are a Sole Trader using only the name of the Sole Proprietor or a Partnership whose name is the names of all the Partners (e.g., “Smith and Jones” if Ms Smith and Ms Jones are the only partners.)
  • Initials & surname are sufficient, though if full names are given for some they should be given for all
  • If there are more than 20 Partners it is sufficient for the notepaper to state that their names are available for inspection at the address given (this applies also to LLPs).

Businesslink is a good place to start.

Contact | Neil Howlett