Law essay question: Has the rise of consumerism and consumer rights recently, been adequately balanced with appropriate redress by the law as it stands? Support your answer with relevant statutory and case law examples.
CPA1987 – Consumer Protection Act 1987
GPSR2005 – General Product Safety Regulations 2005
SGSA1982 – Supply of Goods and Services Act 1982
SOGA1979 – Sale of Goods Act 1979
SSGA1994 – Sale and Supply of Goods Act 1994
SSGCR2002 – Sale and Supply of Goods to Consumers Regulations 2002 (SI 2002/3045)
UCTA1977 – Unfair Contract Terms Act 1977
UTCCR1999 – Unfair Terms in Consumer Contracts Regulations 1999, SI 1999/2083
This paper briefly outlines the rights available to consumers under recent amended legislation and through other channels, and asks whether these are balanced with appropriate redress for the consumer where they receive goods that are unsatisfactory.
The rights of the consumer are protected in various ways in UK Law. Where they are the purchaser of a product, they may have redress in contract law, which provides security for the recipient of a promise who has given something in return for that promise (Howells & Weatherill (2005) p.9). Certain terms may be implied into the contract by the SOGA1979 as amended by the SSGA1994 and the SSGCR2002, for example relating to description (Section 13: See Halsbury’s REF2) and quality/fitness for purpose (Section 14: See Halsbury’s REF1). The SSGCR2002 came into effect in the UK from 31 March 2003, implementing the EU Directive of 1999 on the Sale of Consumer Goods and Associated Guarantees (Directive 1999/44: O.J. L171/12) into English law following a comprehensive consultation by the UK Government (Singleton, 2003(A)). The Regulations made some significant changes to the rights of consumers by substantially altering the Sale of Goods Act 1979 (as amended). They introduced additional rights where consumers purchase goods that turn out to be defective, and included provisions on guarantees given to consumers without extra charge (Timewell, 2002). These remedies are in addition to the buyer’s traditional remedies under the SOGA1979 and at common law, i.e. damages, rejection, rescission for misrepresentation, etc (Harris, 2003).
Terms implied under the SOGA1979 are conditions provided that the Buyer has not accepted the goods, and so if the seller is in breach of contract, the Buyer has various remedies as defined by statute. If the Buyer has accepted the goods (Sections 34 & 35 SOGA1979), the conditions are treated as warranties and the Buyer may claim damages and treat the contract as repudiated, but may not then reject the goods (SOGA1979 s.11(4): Halsbury’s REF3). The Seller may seek to limit the type and extent of remedies available to the Buyer but may only do so as far as permitted by statute (i.e. UCTA1977 and UTCCR1999).
Prior to the introduction of the SSGCR2002, having purchased faulty or misdescribed goods, consumers were entitled only to either reject the goods and/or claim damages. There was no legal right to repair or replacement and further, the right to reject the goods had to be exercised relatively swiftly, or the consumer’s only remedy was damages, which were of limited value in a consumer context (Hamilton & Williams, 2001). Following the introduction of SSGCR2002, several new terms are implied into the contract under the SOGA1979, in addition to the rights it already afforded consumers.
Under the amended SOGA1979, where the goods do not conform to the contract, provided that the Buyer deals as consumer (per UCTA1977 Pt I (ss 1–14) (as amended)), he may require the Seller to repair (SOGA1979s 48B(1)(a); SGSA1982 s 11N(1)(a)) or replace (SOGA1979s 48B(1)(b); SGSA1982 s 11N(1)(b)) the goods, in which case the Seller do this within a reasonable time, without causing significant inconvenience to the Buyer. The Seller is also obliged to bear any costs incurred such as labour, materials or postage (SOGA1979s 48B(2); SGSA1982 s 11N(2)). These remedies were already widely used in the UK prior to the legislation being amended as many suppliers, in the interests of good customer relations, allowed customers to return goods – but of course this did not have status in law (Singleton, 2003(A)).
If the Buyer takes the option either to repair or replace, he may not then reject the goods and terminate the contract for breach of condition (assuming that the non-conformity amounts to a breach of condition) until he has given the seller a reasonable opportunity to repair or replace the goods (SOGA1979s 48D; SGSA1982 ss 11M(2), 11Q).
Where the Seller fails to repair or replace the goods within a reasonable time and without significant inconvenience to the Buyer (SGA1979 s 48C(2); SGSA1982 s 11P(2), or where the buyer is not entitled to require the seller to repair or replace the goods (for example, when to do so would be impossible or disproportionate), the Buyer may request that the Seller reduce the purchase price (SOGA 1979 s 48C(1)(a); SGSA1982 s 11P(1)(a)), or to rescind the contract (SOGA1979 48A(2)(b), 48C(1)(b); SGSA 1982 ss 11M(2)(b), 11P(1)(b)), although if the Buyer has had use of the goods, any refund may take this into account (SOGA1979 ss 48C(3), 48E(5); Supply of Goods and Services Act 1982 ss 11P(3), 11R(5)); Halsbury’s REF4). It is assumed that the right to rescission is still available even where the right to reject has been lost be acceptance (Howells & Weatherill, p.202). Of note, however, there is no test for refusing price reduction or rescission of the contract on the basis of proportionality, according to what is least burdensome. This is not a bad thing for consumers, who can demand rescission for a relatively minor defect where repair or replacement would be too expensive; however, the Courts have wide powers under the SOGA1979 to replace the remedy required by the consumer with one it considers appropriate (Section 48E(3)(4)) which may mean that the Consumer does not get the redress that he wants.
The Court also has power to make an order for specific performance (SOGA1979 Section 48E(2): Halsbury’s, REF4): arguably, specific performance compels the Seller perform exactly the obligation he undertook in the contract, and of note, the new remedy under Section 48E(3)(4) is revolutionary in applying to sales of ordinary goods which are readily available from other sellers (rather than unique or rare goods as used to be the case). However, it is unlikely that the Courts will use the remedy frequently where the difference in cost between the contract price and the price of available substitutes can be recovered as damages under Section 51(3) SOGA1979 (Harris, 2003).
The replacement remedy under Section 48B of the Act is welcome because, prior to the introduction of this, a consumer might find that even if he could obtain a refund, it would cost him substantially more for the same goods elsewhere (although the additional costs would arise as a result of the natural and probable consequences of the breach and could be reclaimed, but there should be no need to go to the trouble of claiming under the new provisions). However, so far as the repair remedy is concerned, Howells & Weatherill (2005) identify a weakness: they note that the law allows the consumer to chose between the remedies where they do not impose disproportionate burdens, but that in the first instance, this choice must be between repair and replacement. This may result in a consumer receiving redress that they are not satisfied with (Howells & Weatherill, p.201). The Buyer has to give the Seller a reasonable opportunity of repair and replacement, which may cause inconvenience to the Buyer who likely purchased the goods because he wanted use of them straight away.
The remedies under Sections 48A-D of the SOGA1979 are available when the goods do not confirm to the contract, and the burden of proof is favourable towards the Buyer – the goods will not conform where they are misdescribed, unsatisfactory quality or unfit for their purpose. If this happens within six months of delivery, Section 48A creates a presumption that the goods were non-conforming when they were delivered, i.e,. they were defective from the outset (Silberstein (2004) p.18). Consumers and business buyers alike also have a right of partial rejection under Section 35A SOGA1979 and they may accept part of the goods without losing the right to reject the remainder (Halsbury’s REF5).
The 2002 Regulations also make provisions as to guarantees that manufacturers and retailers offer to consumers, which need not be formal but may be contained in brochures, sales literature, materials provided with the goods, advertising and websites (Singleton, 2003(B)). Consumers may find they have further recourse against either a retailer, or the manufacturer of goods (despite the absence of a contractual relationship), where anything said amounts to a guarantee. The effect of this is that, since the guarantee will be legally binding on the person offering the guarantee, the customer can seek redress from the manufacturer (for example, for repair or replacement) or against the retailer unless, for example, at the time the contract was made, they were not, and could not reasonably have been, aware of the statement of guarantee (Singleton, 2003(B)).
Other areas of law have evolved to give consumers greater recourse where products are defective. For example, the GPSR2005 (SI 2005/1803) which came into force on 1 October 2005 intensified the level of protection from unsafe products, increasing the obligations on producers and distributors in respect of safety and risk management, and strengthening enforcement powers and the potential for civil actions (Lawson, 2005). A breach of the Regulations does not give an individual cause of action where they have suffered loss (Regulation 42), but other legislation covers such scenarios: Section 2 of CPA1987 provides a remedy to a person injured by a defective product, without the need to prove negligence, and of course where the consumer is the purchaser, they have all the remedies of the SOGA1979 outlined above.
Consumers still have the right to seek damages through the courts – there is a six-year deadline for court action in England and Wales (five years in Scotland). However, of note, after six months, the burden of proof returns to the consumer, although it will always be on the consumer if they seek an immediate refund if claiming within a ‘reasonable time’ (judged by reference to the nature of goods and purpose for which they were acquired: Howells & Weatherill, p.200) or seeking damages through the courts (Kidd, 2003).
In conclusion, it is notable that the complexity of the new system of remedies is in sharp contrast to the simplicity of the previous regime, and it may be that consumers, and their advisers, have difficulty adjusting to the new rules (Ervine, 2003). The remedies available have clearly been reviewed and strengthened alongside the development of consumer rights; although the right to have goods repaired or replaced merely formalises something that has been standard practice with reputable companies for many years. It is unfortunate that the consumer now has to give the supplier the repair/replace opportunity rather than demanding a refund if one of the options is proportionate and doesn’t cause unreasonable inconvenience. Arguably any delay causes at least some inconvenience to the consumer who wants use of his purchase straight away. Further, it has been noted that there is no proportionality test for the remaining options of price reduction or rescission: and although the consumer may pick what is preferably for him, the Court may intervene and pick the option they feel is more appropriate. Although the types of redress available to consumers have been expanded, consumers are now obliged to accept the additional options (or may have these forced on them by the Court) which may not reflect what they want.
- Ervine. W.C.H (2003) The Sale and Supply of Goods to Consumers Regulations 2002, Scots Law Times, SLT 2003, 8, 67-71
- Halsbury’s Laws of England (accessed via LexisNexis/Butterworths):
- REF1: Sale of Goods & Supply of Services 2. The Contract (10) Conditions and Warranties (iv) Sale by Description in Contracts for the Sale and Supply of Goods 72. Meaning of ‘sale by description’, 73. Conformity with description a condition & 74. Meaning of ‘description’
- REF2: Sale of Goods & Supply of Services 2. The Contract (10) Conditions and Warranties (v) Implied Terms about Quality or Fitness in Contracts for the Sale and Supply of Goods 81. Meaning of ‘satisfactory quality’
- REF3: Sale of Goods & Supply of Services 2. The Contract (10) Conditions and Warranties (i) Construction and Effect of Conditions and Warranties 64. Warranties, conditions and innominate or intermediate terms distinguished – also see 66. Buyer’s compulsory election.
- REF4: Sale of Goods & Supply of Services 6. Breach of the Contract (2) Remedies of the Buyer (iv) Remedies for Non-conforming Goods 307. Buyer’s remedies on breach
- REF5: Sale of Goods & Supply of Services (3) Acceptance of the Goods 200. Buyer’s right of partial rejection.
- Hamilton, J & Williams, J (2001) The Impact in the UK of the EU Directive on the Sale of Consumer Goods and Associated Guarantees (Part 2) International Company and Commercial Law Review, Sweet and Maxwell
- Harris, D R (2003) Specific Performance – A regular remedy for Consumers Law Quarterly Review L.Q.R. 2003, 119(OCT), 541-544
- Howells, G & Weatherill, S (2005) Consumer Protection Law (2nd Edition) Ashgate Publishing Limited, Hants
- Kidd, A (2 July 2003) Replace, repair or refund? Cabinet Maker Issue 5323, p8, 1p
- Lawson, Dr R (30 September 2005) Product safety – the new law New Law Journal 155 NLJ 1432
- Silberstein, S (2004) Consumer Law (4th Edition) Sweet & Maxwell, London
- Singleton, S (A) (1 January 2003) New Regulations on sale and supply of goods to consumers, Consumer Law Today, CLT 26 1 (9)
- Singleton, S (B) (1 March 2003) In Focus — Manufacturers’ guarantees and liability for statements – the new regime Consumer Law Today CLT 26 3 (9)
- Timewell, M (24 May 2002) New consumer rights due soon, New Law Journal 152 NLJ 794
Sources used for locating journals and for legislation: