Consumer Rights Bill

Baroness Oppenheim-Barnes Excerpts

Wednesday 19th November 2014 Lords Chamber

[Baroness Hayter of Kentish Town]

My Lords, this is a different sort of amendment, which stands in the names of my noble friend Lord Stevenson and myself, and which seeks to protect the consumer who has had something done in their house and a faulty installation has occurred—not simply a faulty installation such as a table being put in the wrong way round, but where there is a risk to the person concerned. Instead of having to have the installers back in to try to put right whatever they have done wrong, it would give the person concerned the right to move to a refund without having to accept a repair first.

The rest of the Bill is very good where it says that there should be only one repair, and that, if that does not work, you can get the money back. However, there are circumstances in which we think they should not have to have a repair done first; they are in their own home and something has happened which makes them feel at risk. Examples of this sort of thing are where a trader has tried to install a dishwasher but floods the whole kitchen, a bathroom floods the kitchen below—which I have seen happen quite recently—or an electrician is sent to install a new shower, and manages to wire the shower to the electric light bulb rather than to the mains. Again, sadly, that is not just a figment of my imagination. A gas engineer may make a complete mess of putting in a new boiler and cause a gas leak, leaving the consumer thinking, “I don’t want these people back in my house—they don’t know what they’re doing. I want them out before they do any more damage, and I want my money back so that I can get someone in who’s a little more trustworthy”. However, as the Bill stands at the moment, the trader may say, “No; I’ve got the right to come in and sort it out before I give you any money back”.

Our amendment would provide clarity for both parties in those circumstances, allowing customers to say: “I no longer trust you because I feel at risk—I want my money back”. I know from Committee that the Government have some sympathy with our point and with our concerns about this, but they argued that in such cases—which I think the Minister understood—the consumer retains the option to seek damages in court. However, that is not what the Bill should require. Taking a trader to court is very difficult for a consumer; they have to instigate legal action, which itself is complicated, expensive and uncertain. More than that, it takes a long time, and if you want a hot shower the next day you probably do not want to wait until your case comes to court before you can get someone in to put the hot water in the right place.

A survey undertaken by Which? showed that nearly half of consumers thought that you should not have to give the trader the chance to fix the problem in those circumstances. We know that the aim of the Bill is to provide clarity on consumer rights, both to the trader and to the consumer, so surely any of these sorts of disputes should be kept out of court and dealt with in this way. If a kitchen fitter says, “I don’t need to give you a refund now; I have the right to come back and repair this”, we do not want that conversation to end with, “I’ll see you in court”. We want the Bill to make it clear that the consumer can get a refund at that stage.

I hope that the Bill will mostly avoid taking the legal route, but it is a shame that it seems the Government felt that that would have to happen in these circumstances. We therefore hope that the Government, having thought about this amendment again, and given that it is only about residential premises, will support it. I beg to move.

[Baroness Oppenheim-Barnes (Con)]

My Lords, the noble Baroness missed one sort of case. The plumbers, electricians or whoever they are make a charge for coming in the first place, and when they get there, say, “This will need a part that we’ve got to order”. You have already paid for the visit, they demand the money for the parts before they go any further, and they sometimes never turn up again. The noble Baroness can add that to the list.

[Baroness Jolly]

My Lords, this Bill sets out for the first time in statute what remedies consumers are entitled to request and traders must offer if traders provide a substandard service. That is a real increase in consumer protection. Consumers of services, from hairdressing to plastering, will have access to statutory remedies if those services do not meet the consumers’ statutory rights. I am very proud of this part of the Bill and believe it will lead to real improvements for consumers on the ground.

To help consumers use these new remedies, we have set out clearly in the Bill how they will work in practice. This will also be set out in guidance, which will be available for traders and consumers well in advance of the Bill coming into force. To give an example, if a service is not provided with “reasonable care and skill”, the consumer can ask the trader to re-perform the service so that it does meet that standard. In practice, it may not be possible to re-perform a service, or the trader may cause significant inconvenience for the consumer in doing so. In those cases, the consumer can ask for a price reduction. If the consumer has already paid more than the reduced price, the difference must then be given to the consumer within 14 days. That is a practical process designed to work for both consumers and traders. We have discussed this extensively with stakeholders and businesses overwhelmingly support this way forward.

Importantly, these new statutory provisions are in addition to, not a replacement for, common-law remedies that consumers can currently pursue. We are not taking away a consumer’s current access to redress through the court system. Quite the opposite: we make clear in Clause 54 that these remedies are still available. Clause 54(7) is a non-exhaustive list of those remedies. Guidance on the Bill will also explain that these remedies are still available. Moreover, we are not restricting consumers and traders to the remedies in this Bill. The consumer has a right to ask for what is in these provisions. However, if the consumer so chooses, they can negotiate a different remedy with the trader. For example, they could negotiate to reduce the price of a service without exercising their right to a re-performance. There is support available to enable consumers to do this, notably through the Citizens Advice service. The service provides advice over the telephone, face to face and online, including practical tools such as template letters.

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Consumers are protected from receiving unsafe services as they retain access to the common-law remedies. My noble friend Lady Oppenheim-Barnes made a point about traders who charge for a repair visit and then do not carry it out. If the trader agrees to do a repair and takes money but then does not carry out the work, that is a breach of their contract. Consumers should complain to trading standards about sharp practices such as that.

[Baroness Oppenheim-Barnes]

That is not what I said. I said that they charge to come in the first place—not to carry out the work but just to come and see what has to be done. They charge for that and then they say, “It needs an expensive part, so I can’t do anything for what you’ve already paid me in coming here”. They then come back, possibly months later, with a very expensive part.

[Baroness Jolly]

I thank my noble friend for that explanation but I think that I will have to drop her a note to clarify that situation. I ask the noble Baroness, Lady Hayter, to withdraw the amendment.

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Moved by

[Baroness Oppenheim-Barnes]

28: After Clause 58, insert the following new Clause—
“Display of point of sale information about rights
(1) Suppliers of goods and services to which this Part applies shall be required to display at the point of sale essential information in plain and intelligible language and in a reasonable format which explains to customers the relevant rights and responsibilities of consumers under this Part.
(2) This information shall be proportionate to the transaction.
(3) The detail shall be developed by the British Standards Institution.”

[Baroness Oppenheim-Barnes]

My Lords, Amendment 28 concerns point of sale information. I do not want to bore noble Lords who have heard me say this on many occasions during the passage of the Bill but I consider this to be crucial. At the beginning of the Committee stage in the other place, four special witnesses were called from all the major consumer organisations. They pointed out that 75% of all consumers, before making a purchase, still do not have any idea of their rights or what course they can follow in order to bring a case to court if necessary.

When I think of all the pieces of consumer legislation I have been involved in over the years since 1970 they are as good as nothing. None of them is any good. They are hopeless when only 15% of consumers might benefit from them. This is a marvellous Bill. The Government have been very generous with time and facilities in all the proceedings that have taken place, particularly in the other place where experts were invited and all sorts of pre-legislative scrutiny took place. Nothing was spared. It would be a tragedy if this Bill, which is costly for the Government and costly indeed for a great many people, should prove to be worthless.

We still have a situation where such a large proportion —75%—of consumers still do not know their rights. That is why I consider this amendment to be so important. It states:

“Suppliers of goods and services to which this Part applies shall be required to display at the point of sale essential information in plain and intelligible language and in a reasonable format which explains to customers the relevant rights and responsibilities of consumers under this Part … This information shall be proportionate to the transaction … The detail shall be developed by the British Standards Institution”.

I think it is a pretty good amendment and covers everything. I was preparing a much longer speech. However, I discovered only a couple of days ago that there is legislation already passed in the relevant EU directive that was laid before this House on 13 June this year. I point out to my noble friend the Minister that this was four days before she came into her department so she may not have noticed it. However, all the subsequent items under the directive on consumer rights have come in following her going to her present department. They are now part of the directive and part of what we have agreed under the directive on consumer rights. This is the Consumer Rights Bill. You will hear me saying this possibly more often. It seems not unreasonable. I might say that other countries which are also party to this directive have already introduced legislation of this nature.

What the directive says is actually very short. In Chapter II, which I note we have accepted, core information is to be provided by traders prior to the conclusion of consumer contracts which are not distant from the premises. It is a bit of a funny way of putting it but it means at the premises. Member states may add on further information requirements in their national law. But we do not have it in our national law. We have it only in an EU directive.

When the directive was accepted by the right honourable Dr Vince Cable in the other place it was highly recommended and he said what a good thing it was. I am paraphrasing at the moment. It seems to me not unreasonable to want to see it in legislation in this House. This is the Consumer Rights Bill. This is the directive on consumer rights. The argument is very simple. BIS adds one thing. It also says the information should be given on paper unless you agree to set it out in regulations; by email, for example, if that is what is required. I rest my case. I beg to move.

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[Baroness Hayter of Kentish Town]

If I have understood the noble Baroness, Lady Oppenheim-Barnes, correctly, it was probably the noble Viscount who, on 13 June, signed into law those rights. I congratulate him on that and on writing into law that all these rights should be made available. That is very welcome and I thank him on behalf of consumers that he does want them in law, although, at the moment, I think he is saying that he does not. Anyway, we congratulate him on what he did on 13 June.

The noble Baroness, Lady Oppenheim-Barnes, is absolutely right that this amendment is crucial to whether the Bill will work. It will not work if consumers do not know their rights. The little placard that is often next to the till which says, “This does not affect your statutory rights” is completely meaningless. We know from work by BIS that two-thirds of consumers do not know that if a major appliance breaks down 18 months after purchase they still have a right to have it repaired or replaced, even though they did not purchase an extended warranty. So we know that people do not know their existing rights.

The difference is that we agree with Citizens Advice that these rights can be set out briefly and simply. You do not even need to say, “Under the Consumer Rights Act”, although it is very nice to give credit to those who put it through. You can simply say, “You have 30 days to return this item if it is faulty”. That does not seem very difficult. I think people can understand it. I think it is all right if it is on the bottom of their till receipt rather than by the side of it. These things can be done quite easily.

There is a political difference here; it is a difference within the implementation group. The consumer groups want this information clearly written and available so that consumers keep on seeing it. Businesses do not want it. The Government are saying, “Let’s listen to business. They don’t want to do it”. I think if we listen to consumers, they would want to do it. The ongoing champion of consumers is right. Let us get this in the Bill and let consumers know what their rights are.

[Baroness Oppenheim-Barnes]

I thank my noble friend for his intervention. I knew that he laid those regulations under the EU directive in your Lordships’ House, so I hoped that he might be here and I am delighted that he is. My noble friends and the noble Lords opposite will realise that this is a great disappointment to me. I can see that the Government are not of the same mind. The objections which have been put forward are a bit punitive to what is a very simple—

[Lord Taylor of Holbeach (Con)]

I am sorry to interrupt my noble friend, but the Minister has not replied to her amendment at this stage. I have a feeling that she would like to hear from the Minister before she replies to her.

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[Baroness Oppenheim-Barnes]

I am grateful to my noble friend for going into so much detail and care. I will not say that “live wire” is the best description I would want to be remembered for. I think that the noble Baroness, Lady Hayter, has had some better ones than that in the past. However, I am nevertheless grateful that attention has now been drawn. I still think that it is very strange that your Lordships’ House has committed to a directive that other countries have now translated into their own legislation and which for some reason is still not right.

I take the point entirely that my noble friend made about well known and well loved. I cannot imagine Heinz tomato soup ever needing any recommendations, let alone anything else. Branston Pickle comes to mind. I am not sure if they are allowed to say that any more.

This remains an important issue. It is very important that we get a format which is reasonable, which is not going to form petrol queues and which is easily understood. I hope that the Minister will find the right words and put it into law. I beg leave to withdraw my amendment.

Amendment 28 withdrawn.