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CIC provides advice on amendments to the Consumer Rights Bill

Posted: 5th November 2014

CIC (through its Liability Panel) was to please to provide advice to the Earl of Lytton for the introduction of amendments to the Consumer Rights Bill when the Bill reached the House of Lords on 22 October. Although these amendments were not successful, nonetheless it was useful to introduce them as it allowed a debate on the applicability of the provisions of the Bill to the construction industry.

The Consumer Rights Bill is a major piece of legislation which is intended to ‘clarify and enhance’ consumer rights. It is of interest to the Construction Industry Council in that it will apply to all contracts that involve a consumer, including consultants’ appointments. Although applicable to construction, there is concern as the construction process is often more complex that a normal straightforward consumer transaction (e.g. buying a television), and this complexity is not reflected in the Bill.

Clause 50 of the Bill states that anything ‘said or written’ to the consumer (e.g. during the briefing process) will become a binding term of the contract, if the consumer chooses to rely on it. CIC has always had concerns that the ‘spoken’ element of this provision may create significant problems and felt that some inclusion of an element of ‘reasonableness’ (i.e. that the customer’s reliance should be reasonable) would help to give some protection to a builder or construction consultant, particularly where the client was being deliberately obtuse. CIC also wanted to add an amendment to cover the situation in which it would be unreasonable for a customer to be able to hold a consultant to the original statement if the consultant set out to clarify that within a short period thereafter.

In the end both amendments were rejected. Baroness Neville-Rolfe, speaking for the Government, stated that she felt that the Clause as currently drafted placed the burden of proof on the consumer to show that he or she must have relied on the information provided. In her view she felt that this was sufficient to protect traders from unreasonable claims. Lord Lytton withdrew the amendment, but remarked that he intends to return to some of the points raised at a later stage.

It should be noted that the Courts when interpreting legislation can use debates in Hansard to determine the rationale behind a particular clause in legislation. Professor Sarah Lupton, Chair for the CIC Liability Panel, commented “The debate in the House of Lords may therefore prove useful to a consultant or contactor who is prosecuted under the new Act.”