Billions of pounds are spent each year at Christmas and businesses spend months preparing for the festive period. But what happens when a consumer is not happy with their order?
If disputes arise over the quality of a product or service, as a business you will usually be defending these claims. Therefore, it is important that you understand the requirements your products and services need to meet and the consumers’ rights when things go wrong.
The Consumer Rights Act 2015 implies terms into all contracts. Those terms are in addition to your own contract terms.
Products are to be:
- As described;
- Of a satisfactory quality, which means the appearance of the goods, safety, durability and whether it is free from minor defects; and
- Fit for the purpose known to you, whether expressly stated by the consumer or by implication from the product itself.
Services are to be:
- Performed with reasonable care and skill;
- At a reasonable price; and
- Performed within a reasonable time if your contract with a consumer does not specifically state a timeframe.
If a product or service does not meet the above requirements, the consumer has specific rights within certain timeframes.
Within 30 days a consumer has a short-term right to reject and, if they do so, the contract is treated as at an end, and you are to provide them with a full refund. The consumer has 30 days to exercise their short-term right to reject, which starts from the date the product was either delivered, ownership passed to them or the product was installed by you if relevant.
After 30 days, the consumer has the right to repair or replacement. This must be done by you within a reasonable timeframe, without significant inconvenience to the consumer and at your cost. You will need to show that the product was not faulty when the consumer bought it to avoid the obligation of repair or replacement.
If repair or replacement does not solve the issue, the consumer is entitled to a refund or price reduction.
If the issue with a product is raised six months after purchase, the consumer will need to prove the product was faulty when they bought it, to be able to use their rights under the Act.
Where a service provided does not meet the requirements of the Act, the consumer will have the right to repeat performance or a price reduction. If you are to perform the service again, this must be done within a reasonable timeframe, without significant inconvenience to the consumer and at your cost. If repeat performance does not fix the problem or is not possible, a price reduction must be provided to the consumer within 14 days of entitlement to a refund being agreed.
Orders from a distance
If you do business online or over the phone, the Consumer Contracts Regulations 2013 also apply.
A consumer placing an order at a distance has cancellation rights under the regulations. They have 14 days from when they receive the product to cancel their order. If multiple products are ordered, the 14 days runs from the date the last product was received. A consumer has 14 days to decide whether to cancel and then a further 14 days to send the product back.
If the product’s value has been reduced as a result of handling the goods, you can make a deduction.
With services, under the regulations, the consumer can cancel within 14 days of entering into the contract. Therefore, work should not be started within the 14-day cooling off period unless the consumer has agreed for you to start straight away – they can still cancel within 14 days but will need to pay for the services provided in that time.
Disputes
If you end up in a dispute with a customer and just cannot resolve it, taking expert legal advice as quickly as possible can be essential.
At Christmas, most of the products or services in dispute are likely to fall within the small claims track, which is for claims up to a value of £10,000 and where fixed costs apply. If the value of a claim is above £10,000 the Court will allow recovery of legal costs to some extent.
We can assist you with bringing or defending claims, both before and after proceedings have been issued. It is always worth considering mediation or other forms of Alternative Dispute Resolution with disputes of this nature, as proceedings can be a lengthy process and costly if you are not recovering your legal costs in full in the small claims track.
Our top tips for dealing with consumer issues:
- Make sure your own terms and conditions of business are up to date and reflect the way you choose to sell your products or services – if these have not been looked at for a while get them reviewed and then issue them to customers.
- Put a complaints procedure in place and make sure your sales team know how you want issues to be dealt with.
- Keep an accurate record of conversations with the consumer and a log of all action taken to resolve the issue i.e. any repairs agreed and actioned. If conversations take place over the phone, it is easier later to evidence what was said if this is confirmed in writing after the call.
- Speak to a lawyer if you cannot resolve a dispute – it is far better to take early legal advice than to find yourself embroiled in a legal claim that has not been presented properly to the Court.
For advice on reviewing your terms and conditions or dealing with any commercial dispute, however large or small, talk to Howes Percival.
Contact Gary Pitt at gary.pitt@howespercival.com or Rachel Leatherland at rachel.leatherland@howespercival.com or visit www.howespercival.com/services/dispute-resolution-and-litigation/
