Consumer Rights Bill

Lord Borwick Excerpts

Wednesday 15th October 2014 Grand Committee

[Baroness Hayter of Kentish Town]

We think that the noble Lord has brought an interesting issue to the Committee; I do not know whether the Government find it such. However, we are unconvinced that this needs to be detailed in the Bill as suggested. The Bill simply states that repair means making the goods conform to the contract, which means making them deliver what was promised. I do not think that it says “at one go”. Obviously, we look forward to hearing what the Minister will say on that.

However, the Committee will not be surprised that our worry is that the danger of the new wording is to allow a trader to make more than one repair and then claim that it was simply different stages of the same job, whereas actually they may have tried this, that and then something else—and want another go if they did not do it at first. I recognise that that is not what the noble Lord, Lord Clement-Jones, is aiming at, but the wording might allow for that. It is exactly to avoid such situations where consumers are fobbed off by a number of unsuccessful repairs before they can move to the next stage that we like the clarity of the Bill and would not want it jeopardised by these amendments, no matter how well-intentioned they might be.

As we are into personal stories, such as my clothes, let us take my new car. Of course, it got a great big problem and I took it back to Nick but rather than opening the bonnet all he did was to put a computer on top of the car, which seemed to tell him what was wrong. I do not know how that worked but 55 minutes later it was completely mended. Cars, which I no longer understand even if I once did, may be more complex but one does not want to have to keep going back to the trader. We worry that the amendment would lose the clarity that there is in the Bill.

[Lord Borwick (Con)]

My Lords, Clauses 23 and 24 as they stand seem to state that a consumer can have their money back if one repair does not fix the problem. That is reasonable for a product such as a television but it may cause problems where the fault is less obvious. Some products are incredibly complex; just as complex as consumers.

While we are telling personal histories, from my time in the London taxi industry I know that the clause would cause huge problems for car repairs. We had a customer bring in a taxi for repairs to his rear axle. My mechanics could not find anything wrong with it, and they therefore stupidly said that they had mended any problem that existed. However, the customer brought the car back, insisting that he was hearing dreadful noises from the back of the car. It turned out that the customer had spanners stored in the boot of his taxi that were slipping around. He removed them to bring the car to the garage, which is why no fault could be found. He then put the items back into the boot and so began hearing strange noises again as things slipped around, so he brought the taxi back in. Would the clause as drafted mean that we would have had to refund him because we did not fix the problem the first time around? You can have two problems—one masking the other—and you may need a process, as suggested in the amendment, to resolve some problems.

[Baroness Jolly]

I thank my noble friend Lord Clement-Jones for his clear explanation of the purpose of these amendments, and other Peers who have added their thoughts. The amendments reflect concerns that the motor industry in particular has about a single repair or replacement. Officials have engaged with the industry on this throughout the Bill process—I do not think that spanners came into the conversation. If it will help to allay the noble Lord’s fears, my noble friend Lady Neville-Rolfe or I will be happy to meet with representatives of the motor industry to discuss their concerns.

I am concerned, however, that these amendments would undermine the clarity of the Bill and the consumer protection that it provides. When the Law Commission consulted in 2008 on clarifying when consumers can move to a second-tier remedy, it concluded that the best and simplest way to make the law on repairs and replacements an effective protection for consumers was to create a cut-off so that after one failed repair or replacement the consumer was entitled to a second-tier remedy. In 2012 BIS consulted again on this matter and reached the same conclusion.

In both consultations, evidence was given by Which? and Citizens Advice of consumers becoming trapped in a cycle of repairs or replacements that failed to fix the problem but where it was not clear whether the existing triggers for the second-tier remedies were met. In fact, one of the examples given was that of a car. The limit of one mandatory repair or replacement before the consumer is entitled to money back mitigates this risk. The consumer should never find themselves without a clear route to a satisfactory outcome for them.

These amendments would entirely undermine that certainty. For complex goods, they would allow a single repair to be extended indefinitely over a number of attempts. The intention in the Bill is that after a single repair attempt, the consumer is entitled to a second-tier remedy if the goods are still faulty. Under the amendments, while the consumer would not be trapped in a series of failed repairs, they could easily become trapped in one ongoing repair without an end in sight. Just to be clear, the effect on the consumer would be the same, and I am sure that noble Lords can see that.

The noble Baroness, Lady Hayter, talked about one repair and there have been some comments about what “one repair” means. The Bill is clear that a repair is an attempt to bring the goods into compliance with the Bill’s requirements. One repair is complete once the trader returns the goods to the consumer in response to the consumer’s request for a repair.

Of course, it is also important to remember that the Bill does not prevent the consumer from agreeing to further repairs. If goods do not conform to the contract after a single repair attempt and the consumer would prefer the trader to carry out a further repair rather than rejecting the goods, they are entitled to choose that.

I know that the motor industry has an excellent track record in providing good service to consumers, and that rejection is rarely resorted to by consumers because of the warranties supplied for motor vehicles and the repairs that they provide. There is no reason to believe that consumers will change this behaviour under the Bill; they already have the right to reject under the current legislation but choose not to do so in many cases.

If noble Lords consider the consumer’s position when a fault occurs with a vehicle, they will see that a repair, rather than rejection, is often in the consumer’s interest. It makes sense that consumers take time to choose expensive items. It also makes sense that it is not very appealing to give up on something that one has spent a lot of time and money considering and selecting. Presumably, the consumer has the car for practical reasons such as going to work, the school run, or doing the shopping. If the consumer rejects the vehicle, they will have the inconvenience of getting another one to carry out these normal day-to-day activities. However, the industry says that repairs are generally completed quickly, and where there could be a delay a courtesy car is often provided to mitigate any inconvenience to the consumer.

I believe that repair will remain a crucial remedy that consumers want so long as business, such as the motor industry, continues to provide effective, convenient repair. Crucially, the consumer is protected in the Bill in the worst-case scenario of a series of repairs failing to bring the vehicle up to standard. These amendments would remove that protection.

Where the faith of the consumer in the trader is eroded following a repair, the consumer should have the right to exit the contract or get some money back. They should not be trapped without further recourse. On the basis that the amendments undermine a key consumer protection that the Bill establishes, I must ask my noble friend to withdraw the amendment.

--- Later in debate ---

[Lord Pendry (Lab)]

My Lords, I will talk to this clutch of amendments, but specifically to Amendments 26 and 27.

Protecting sports fans from ticket touts and being ripped off when buying tickets for leading sporting events is an issue that I and others have been working on for over 20 years. At that time the focus was of course mainly on disorder issues in football, which were highlighted by Lord Justice Taylor and his report after the tragic events at Hillsborough stadium in 1989. Way back in 1994 I led from the Labour Benches in the other place a campaign to have the then Government extend the provisions they were introducing to ban ticket touting at football events to other sports, in the Criminal Justice and Public Order Act 1994. We were partly successful in that we obtained reserve powers to be added to that Bill to allow a Home Secretary to designate other sporting events. The amendment to that Bill was added in this place—just to show that we often have greater wisdom here than in the other place—but sadly, the measure has not yet been used, by successive Governments.

Back then I was working with the noble Lord, Lord Moynihan, on this issue, and here we are today still battling away to protect sport and its fans. I hope that today we will be successful, as the amendments before us have the support of the Opposition Front Benches and eminent Peers with a long-standing interest in sport, including the noble Baronesses, Lady Heyhoe Flint—as we have just heard—Lady Grey-Thompson, and others. They know well the issues that arise from certain individuals and companies who try to rip off genuine sports fans.

Of course, the Government acted to ban ticket touting at the London Olympics—at the behest of the IOC—and clearly the noble Lord, Lord Moynihan, must have had a major say in that decision. It is a great shame that we did not learn from that experience. Everyone agrees that one of the joys of the Olympics was the ambiance and general good will of the Games. That was aided by the fact that the approach to sporting venues was not inundated with shady touts doing their business and adding the air of menace they often bring. Instead, we had smiling volunteers and a general ambiance as real fans entered the various venues.

We also saw the wonderful atmosphere that it generated at the sporting events, as the legislation restricted the secondary market and helped more fans to get tickets. What a shame that we did not learn directly from that experience and create a positive legacy for all sporting events. I know that we often hear about the legacy benefits that the Games created, but in that area we certainly have yet to learn from that past experience. Today, we have an opportunity to make a difference. The amendments before us would not criminalise ticket touting. That is a debate for another day, although I hope it comes pretty soon. Instead, we can today provide more protection for fans who buy tickets and introduce more transparency into the arrangements. As others have said, it is an extension of measures that the Government already have and, for that reason, I am hoping that the Minister will accept the amendment.

The proposed new clause builds on existing government regulations by making requirements of certain ticket details that must be provided. To my mind, this is sensible. It will enable a sports fan to know the exact location of the seat that they are purchasing, its original cost and whether or not it is in the terms and conditions for that ticket to be transferred. This is important, as we know that fans are often grossly overcharged for tickets with no awareness that this is happening. In the most serious cases, the fan may not even get into the event they have bought the ticket for. If it is against those terms and conditions for the ticket to be resold, they find it invalid.

Will the Minister address this particular question when she replies? Can she explain why it is not in the interests of the consumer for them to be made aware whether it is within the terms and conditions of a ticket for that ticket to be transferred? Clearly, the basic principle is that to sell something that does not actually exist is wrong. This proposal would place no extra burden on consumers. For the seller, it would probably add seconds for the information that they have to provide when listing a ticket for sale—or if they have the technical ability, which I certainly do not, to take a snap of it on their smartphone and upload that picture to the online sales process.

Finally, as we have heard from the noble Lord, Lord Stevenson, the amendments have the support of sporting organisations including the British Horseracing Board, the England and Wales Cricket Board, the Rugby Football Union and Wimbledon tennis. All of them have contacted me—and others, I am sure—to say how it would help them to meet their objectives of protecting their sporting events for the many and not the few. I urge the Minister to accept the amendments before her. In future all sports fans could have greater protection to see their favourite sporting events not being marred by the unscrupulous, who currently are content to see genuine sporting fans being ripped off.

[Lord Borwick]

My Lords, very few secondary markets are perfect but they are certainly welcome in that they provide liquidity to the primary market. These amendments on secondary ticketing platforms would get in the way of the primary market. When somebody buys a ticket for an event, they are investing in something that is often way into the future. Tickets for big shows are often released a year in advance or more, so buying tickets to such events strikes me as a rather entrepreneurial activity. It is risk-taking: you cannot know whether you will enjoy the show or event and there are no reviews to read or critics to listen to. Yet if you decide that you cannot go to the event or change your mind, it is a good thing that there are proper secondary platforms developing to sell those tickets. These amendments would mean that people would think twice about that risk of buying tickets in the first place. They would be distortionary.

The noble Lord, Lord Stevenson, mentioned botnets. I think they were also mentioned by the noble Lord, Lord Clement-Jones, with whom I entirely agreed on his earlier amendment. I am afraid that I disagree with him now because surely there are very good pieces of software that can stop the purchasing where computers buy automatically. Those aggravating things where you have to fill in a distorted word to prove that you are human can stop the botnets.

The noble Baroness, Lady Heyhoe Flint, talked about her aggravation that somebody was paying £4,000 for a ticket to a cricket match. I am aggravated that that £4,000 is not going to the cricket club but rather to somebody else. If somebody is prepared to pay £4,000 for a ticket to a cricket match, why is the cricket club not charging that figure? That money would then go to the sport rather than to somebody else. Of course, the real problem is the ticket touts outside railway stations or on street corners who are selling outright fake tickets or perhaps their electronic equivalents. Selling electronic tickets or trading on the street without a licence is illegal; there is already legislation to deal with this problem. The secondary platforms are already ensuring that resold tickets are valid. They usually insist that the face value of the original ticket is stated during the transaction. The market is providing solutions. We do not need new legislation and new burdens. In any case, these amendments would hit the good guys instead of the bad guys.

[Lord Moynihan (Con)]

My Lords, I shall speak to Amendments 28 to 31, standing in the name of my noble friends Lady Heyhoe Flint and Lord Clement-Jones. I see significant merits in Amendments 26 and 27, which I would support had we not tabled our own amendments to effectively the same objective.

In the spirit of the noble Lord, Lord Stevenson, and my noble friend Lady Heyhoe Flint, I begin with the question: what is a consumer? In the context of the amendments before us, the answer is a sports fan.

It is a rare occasion for the title of a Bill fully and concisely to reflect its intentions. On this occasion, the Consumer Rights Bill achieves that objective: it is a Bill about consumers and it rightly seeks to protect and, where appropriate, strengthen consumer rights. It is a Bill that addresses inadequacies in consumer protection and derives its strength from addressing malpractice against consumers, who can be exploited by loopholes in the law or interpretations of it which, without legal backing, can lead to the exploitation of consumer interests for commercial gain. It is therefore important in the context of these amendments to recognise that, in every sense, consumers are sports fans.

The amendments should be seen as a constructive step towards protecting the interests of fans. As my noble friend has said, they would make it a specific requirement that a fan buying a ticket must be informed of the terms and conditions of the transfer of the seat to them.

This was a key issue for us when hosting the Olympic Games. The subject of ticketing gained prominence for two reasons. The first was a decision made by the International Olympic Committee not to provide a ticketing platform, a platform that incrementally built on the experience of previous Games. The IOC Games department took the view that each host city should start from scratch and that the role of the IOC in this context would be purely advisory. I made my view very clear at the time: that ticketing each and every event at an Olympic and Paralympic Games, while taking into account the myriad contractual requirements of the IOC and the Olympic family for free tickets, required a platform built on experience and expertise that should be refined and improved by each host city, not one that is reinvented every four years. A pattern will emerge of the demand by the world’s athletes for free tickets, greatest—not surprisingly—after they have completed their events. I believe that, had that been in place, we would not have faced at the beginning of the Games the issue of empty seats in areas allocated for the Olympic family.

The second reason emanated from the legal framework for the Games and is directly relevant to these amendments. The Olympic legislation was introduced by this Government specifically to protect fans who sought to buy tickets for the Olympic and Paralympic Games. The Government were initially nervous about addressing this issue at the time. Historically, they had consistently taken a position that the resolution of any problems through voluntary action by the market participants was strongly to be preferred; that new regulation would be considered only as a last resort, even for the Olympics, and only where there was clear evidence that it was in the public interest; and that new regulation and the associated cost of enforcement were likely to impose greater burdens and restrictions of consumer choice as compared to market-led solutions.

However, the Government, along with the police, the fans and the organisers of the Olympic Games, collectively took a very different view after the Olympic Games were over and they had time to reflect on the effectiveness or otherwise of the legislation that had been put in place. In that context, I say to my noble friend in sport, the noble Lord, Lord Pendry, that I believe the Government learnt a lesson that I hope they will not go back on as a result of the experience that was derived from those Games.