Consumer Rights Bill

Debate between Earl of Lytton and Baroness Neville-Rolfe

Wednesday 22nd October 2014 Grand Committee

[Baroness Neville-Rolfe]

My Lords, first, I thank the noble Earl for his thoughtful and very clear contribution to the debate. I share his sympathy for the untimely death of Sir Sydney Chapman. I also agree that the vast majority of consumers and service providers are honest but, regrettably, there are some on both sides who would not meet that description.

Perhaps I may look at the three amendments by taking a step back. Clause 50 is the result of careful consideration, as I said. We have thought and listened hard, consulting on it and publishing it in the draft Bill. We have sought to achieve the delicate balance between giving consumers the right to have what they pay for and not overburdening traders. To do that, we have given consumers a clear statutory right: the right that information that they are given and which they take into account is complied with.

Crucially, there are three safeguards for traders. It may help if I set them out. First, this right does not cover every bit of information given to a consumer by a trader. It is limited to information that the consumer took into account when making a purchase or making a decision about it—for example, if a consumer contracted for a service specifically because the trader said it would be done in a certain way. Secondly, it would be for the consumer to prove that they took the information into account if seeking to enforce this right against the trader. Thirdly, we are allowing traders to qualify information given. The trader can qualify information as long as, where they do so after the occasion when it was first given, the consumer is happy with the new information. For example, if a salesperson gives information over the phone in good faith but later, as more details of the consumer’s circumstances emerge, they need to change it, then they can do so as long as the consumer agrees.

We think that those safeguards are enough to address concerns that noble Lords have mentioned. For example, we have heard concerns that sales advisers will have to speak strictly to a script. That will not be the case, because of the safeguards that I have just outlined. We are not restricting the trader’s ability to discuss options with the consumer or making them stick to jargon, in the words of the noble Earl. We are saying that when a trader gives information which the consumer may take into account in deciding whether to make a purchase or make a decision about it, the trader needs to comply with that information.

On spurious claims, we do not think that there is an assumption that consumers remember information. I know from my experience that you cannot assume that consumers remember information; one sometimes forgets things. That is not what the clause states. Clause 50 provides that where a trader has given information that the consumer has relied on, the trader must comply with that information. The consumer will need to prove that the information was given and that they relied on it. Those safeguards—that the burden of proof is on the consumer and that the consumer must have relied on the information—in my view protect traders from unreasonable claims. Unfortunately, some consumers will, as the noble Earl said, act unreasonably. They are not the vast majority. Most consumers of services simply want the service to be provided to the required standard, with access to redress if things go wrong. That is what this chapter provides.

Turning to Amendments 47 and 48, the safeguards that I have explained achieve a balance between traders and consumers. Adding a reasonableness test to the clause would, in our view, cause confusion and uncertainty. There are some places in legislation where reasonableness is an appropriate test. However, I fear that it would add complexity here, which would not benefit consumers or traders. When we consulted in 2012, the vast majority of respondents thought that the existing law on services was too complex.

That brings me to Amendment 49. As I explained a moment ago, we are allowing traders to make changes to information given. While subsection 2(a) allows the trader to qualify information on the occasion when he gives it, subsection 2(b) allows the trader to make changes at a later date if the consumer agrees to those changes. That achieves clarity for both parties, so we think it is an appropriate balance.

The noble Earl, Lord Lytton, also mentioned adjudication. We have already talked a lot about alternative dispute resolution in the debates on the Bill. ADR will be available in all sectors covered by the EU directive from next year. While I sympathise with much of what my noble friend has said, given the safeguards I have outlined, I ask that the amendment be withdrawn.

[The Earl of Lytton]

My Lords, I thank the Minister for that explanation. I will go away and think about it. The words about what the consumer takes into account when making a decision are pivotal. I would simply leave a question in the air: objectively, how would anyone know, other than the consumer himself? How would one test that? This is not the time to pursue this, even if we were not in Grand Committee. I will ponder what the Minister said and I may return to this at a later stage. I may well write to her with some more focused issues between now and the next stage, although I cannot guarantee that, for all sorts of reasons. That said, I beg leave to withdraw the amendment.