Draft Consumer Rights Bill - Business, Innovation and Skills Committee Contents


Consumer law in the UK is currently highly fragmented and, in places, overlapping and unclear. In 2012, the Government and the Law Commissions carried out several consultations on the reform of consumer law. The responses highlighted many areas of uncertainty and inconsistency and provided evidence of significant consumer detriment, particularly in relation to access to redress.

The Government published the draft Consumer Rights Bill in June 2013. The draft Bill is intended to simplify and modernise consumer rights, with the aim of empowering consumers and promoting growth through competitive markets. We fully support the aims of the reforms. However, we consider that the draft Bill raises many important issues which must be resolved before a final Bill is introduced to Parliament. In this Report, we make recommendations suggesting either modifications to the draft Bill itself or the policy underlying it.

Part 1 of the draft Bill sets out the minimum rights for goods and services and for the new category of digital content, to which bespoke rights and remedies would apply. We support the Government's initiative of seeking to modernise and improve consumer law to offer appropriate consumer protections, while driving up standards and competition in the digital sector.

We are concerned, however, that the Government does not appear to have given due consideration to applying an additional outcomes-based liability standard (that is, a satisfactory quality right) to services, and particularly to the flexibility of that standard. Applying an additional outcomes-based standard to services would considerably decrease consumer detriment. It would also remedy the serious inconsistency in the draft Bill's application of an outcomes-based standard to the services surrounding digital content. We recommend that the Government reconsiders this issue.

Part 2 of the draft Bill clarifies which contract terms may or may not be challenged in court for fairness. The proposals would make contract terms specifying the main subject matter or price of the contract exempt from being reviewed for fairness if they are "transparent" and "prominent". In order to take into account the practical realities of consumer behaviour, we recommend this is qualified by reference to what an average consumer would be aware of and appreciate the significance of, to ensure fairness for consumers and businesses.

Part 3 of the draft Bill would consolidate the powers of consumer law enforcers (such as Trading Standards) to investigate breaches of consumer law, which are currently contained in over 60 pieces of legislation. We recommend modifications to the safeguards that the draft Bill would apply to enforcers' powers, to ensure appropriate levels of protection while maintaining the deregulatory intention behind the measures.

Part 3 would also enable public bodies responsible for consumer law enforcement to ask the civil courts to require traders to compensate consumers where they have breached consumer law. We fully support these proposals which would address established consumer detriment, and recommend that they are extended to private enforcers, subject to appropriate safeguards.

The proposals in part 3 on private actions in competition law and collective proceedings would reform access to redress for victims of competition law breaches. We make recommendations designed to allow the proposals to engage with the practical realities of litigation, particularly in relation to costs and procedure, which will be vital to the effectiveness of the proposed regime. We also recommend strengthening some of the safeguards to ensure the appropriate level of statutory protections.

We have worked hard on the draft Bill in order to suggest significant, and, in some cases, crucial improvements to it, and we expect that the Government will accept and implement our recommendations.

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© Parliamentary copyright 2013
Prepared 23 December 2013