Draft Consumer Rights Bill

June 12, 2013

It may be a little too early to redraft all terms and conditions for e-commerce businesses, or indeed for all businesses dealing with consumers, but the legal landscape is set to change if and when the draft Consumer Rights Bill becomes an Act of Parliament. 

The draft Bill, which is available as a pdf here, has a long title that states that it ‘amends the law relating to the rights of consumers and the protection of their interests’. That rather understates its impact. It is a complete rewriting of the law on sale of goods and services to consumers. The stand-out feature – that Part 1, Chapter 3 make specific provision for digital content – should not obscure the fact that the use of new words and phrases to restate old principles on sales to consumers will create a need for fresh consideration of all contract terms affecting transactions with consumers where for goods, services or digital content.

The proposals for digital content have been widely covered in various trailers and have been subject to lengthy consultation. They will of course require special attention. It is worth noting that they apply to free ‘digital content’ supplied with paid-for goods and services.

If and when passed, the provisions will apply in England and Wales, Scotland and Northern Ireland.

The draft Bill includes the phrase ‘This Act may be cited as the Consumer Rights Act 2013’ as is normal practice. That ‘2013’ will certainly shift; the tricky thing is predicting by how much.

Consumer Minister Jo Swinson said:

For too long the rules that apply when buying goods and services have been murky for both consumers and businesses. The situation is even worse in relation to digital content. It is about time consumers knew what their rights are and businesses have clearer information on what is expected of them when problems inevitably do arise. That is why we have put clarity and fairness at the heart of the proposed Consumer Bill of Rights. We want to make sure consumers are confident about their rights in everyday situations be it their washing machine breaking down or an online game they purchased always crashing. This will also benefit businesses as they are going to spend less time working out their legal obligations when they get complaints from customers.

Which? Executive Director, Richard Lloyd, said:

The new Bill of Rights will bring consumer law into the 21st century at last, making it easier for everyone to know their rights and giving people more power to challenge bad practices. There are many welcome measures in the Bill, including reforming the law on unfair terms and conditions and giving consumers clear rights when digital downloads go wrong. This will be good for consumers and good for businesses that try to do the right thing by their customers.’

British Retail Consortium Director General, Helen Dickinson said:

We broadly welcome the attempt to clarify consumer rights when a product is defective; to introduce a proportionate system of redress for consumer protection issues led by enforcers; and in particular to define a consumer protection regime for digital content for the first time in the absence of a fully harmonised EU approach. Reputable retailers usually solve problems without the need for legal intervention but this Bill helps to clarify the law. We look forward to the discussion on the draft and to continuing to work alongside BIS as it undergoes pre-legislative scrutiny.

The BIS press release of 12 June which accompanies the published draft gives an example of a situation in which the digital content proposals will give ‘greater clarity’:

‘You play a ‘freemium’ computer game and have spent quite a bit of money on in-app purchases to improve your character. You’ve also earned some points through game play which you also used to build your character. Ever since you last upgraded your character, following an in-app purchase, the game has failed to work properly. You would be entitled to a repair or a replacement because even though the game was “free”, the in-app purchase was not working as expected. If a suitable repair or replacement is not possible then you would be entitled to some money back.’