Lord Clement-Jones
Main Page: Lord Clement-Jones (Liberal Democrat - Life peer)Consumer Rights Bill
Lord Clement-Jones Excerpts
Lord Clement-Jones
“( ) the fact (if it be the case) that the digital content is computer software of a type which commonly includes defects when supplied,”
Lord Clement-Jones
My Lords, I beg to move Amendment 34 and speak to Amendments 36, 37 and 38. Clause 34 specifies that digital content is,
“to be of satisfactory quality”,
and requires that digital content must be free from “minor defects”. I very much accept, unlike the noble Lord, Lord Stevenson, that there is a different regime for digital goods versus physical goods, but while this notion of satisfactory quality works well with traditional goods, it is unfortunately open to broad interpretation if applied to digital content, such as complex internet security software.
I suspect that Professor Bradgate will be much quoted today; I am no exception. In his report for BIS, which I quoted on Second Reading, he said:
“Even with extensive testing, it is quite common, and an experienced computer user will be aware of the fact, that the complexity of modern programs is such that bugs in the program are likely to manifest themselves throughout the program’s lifetime. Modern complex programs therefore need regular updating and patching to correct bugs and/or other potential weaknesses in the program as they arise”.
Professor Bradgate also states that,
“the courts have shown themselves aware of the fact that new software cannot be guaranteed free from ‘bugs’ and the presence of bugs, especially in new software, does not necessarily make it unsatisfactory”,
because bugs are considered standard in digital content on issue.
It follows that, in general, the presence of bugs in software is not in itself regarded as a breach of contract. It seems from the impact assessment that it is not the Government’s intention to change the law in this regard. The difficulty with the new implied terms as drafted is that they do not appear to cater explicitly for the presence of bugs. There is a real danger that an ordinary reader of these provisions may well be led to conclude that digital content containing bugs is not of satisfactory quality, is not fit for purpose and is not as described.
As I have mentioned, one of the signs of satisfactory quality in Clause 34(3) is “freedom from minor defects”. The test under subsection (2) is what,
“a reasonable person would consider satisfactory”.
All relevant circumstances are to be considered. However, there is no evidence that a reasonable person would be aware that bugs are normal or consider this a relevant circumstance. The position would be clearer if the fact that the presence of bugs is normal was expressly mentioned as a relevant circumstance in subsection (5), but unfortunately it is not.
Some forms of digital content—music and e-books perhaps being the classic examples—are not expected to contain bugs. That is absolutely clear. That could be catered for by specific reference to those forms of content. In fact, the overwhelming majority of digital products are provided through and on top of an intricate underlying mesh of physical infrastructure, such as the broadband network; virtual infrastructure, such as a cloud server; hardware, such as a computer or smartphone; software, such as an operating system; and other products, such as the application needed to play a media file.
As a result, defects in complex software can rarely be identified in isolation from the context in which they are being provided. Therefore, the attribution of a defect or malfunction to one particular product will, in most cases, be at best ambiguous and sometimes outright impossible. The same product might perform flawlessly in one context and work poorly in another. For this reason, to require that complex software performs without minor defects in all circumstances would be unrealistic—the consequences of strict compliance are likely to be increased cost to consumers and slower product evolution from the increased time and resource required for testing. It would be preferable for consumers and businesses to require that minor defects or malfunctions that may surface as a product or service is used should be fixed as promptly as possible. I welcome the revised Explanatory Notes clarifying that it is common to encounter some bugs in complex software, but this should be expressly included in the Bill as it would provide greater certainty to both consumer and industry.
Lord Clement-Jones
My Lords, I thank my noble friend. She certainly came out fighting for Clauses 34, 35 and 36. I thank the noble Baroness, Lady King, for her very thoughtful contribution.
What we are trying to get at—and I do not think we are that far apart, actually, in substance—are the realities of supply of digital software. This is not an attempt to drive a coach and horses through the Bill or, to use another metaphor, to steal a march in this respect. As the noble Baroness, Lady King, said, we have to try to maintain a careful balance in these circumstances. Those who are propounding amendments to the Bill are a very responsible group of software companies, such as those represented by FAST and techUK. This is not some mirage that has been put up. They are seriously concerned about the nature of consumer expectations.
In reference particularly to Clause 35, my noble friend said, “No, no, we cannot have that amendment because it will not provide us with clarity”. We are all on the same page as far as that is concerned. What we want is clarity. Obviously, I will read what my noble friend had to say but actually an awful lot of what is in these amendments is a response to what Professor Bradgate had to say. But the Government are proposing to deal with this via consumer guidance rather than in the Bill. The big question is whether that is adequate to give sufficient clarity in the case of dispute. That is what it is all about.
We have spent many, many happy days in this House arguing whether having something in the Bill is better than having it in regulation or in guidance. In this case, with a very important industry such as the software industry, which is highly competitive—and if it cannot innovate, that will actually reduce its competitiveness—it is completely the other way round from the argument that the Minister used. Software companies need to be able to innovate and we must allow them to innovate. What concerns me is that if there is not clarity in the contract between the consumer and the software provider, that will have damaging consequences for a highly competitive industry.
I do not think that we are very far apart in our intentions but we differ over what we believe the remedy to be for the particular issues that the software industry has. I will consider Hansard. I hope that my noble friend will likewise consider what I have said with some care, particularly the issue about the changing nature of some of the software over a period of time, particularly security software. She was adamant about Clause 36 and the need for the content to be as described but we are dealing with—I do not know which Greek mythological creature changed over a period of time but it is rather akin to that. You think it is one thing but it has to respond to changing threats in security over a period of time and you may end up with a slightly different product. So it is not simply that you are going to get what is described right at the outset of the contract. That is too black and white a view. Nevertheless, the whole purpose of Grand Committee is to have a debate about these things and unpack some of the issues, and I very much hope that we can continue that discussion with the industry. In the mean time, I beg leave to withdraw.
Lord Clement-Jones
“( ) which is beyond the trader’s control (including third party software provided without warranty to the trader).”
Lord Clement-Jones
My Lords, I am very pleased to have the support of the noble Lord, Lord Sugar, for Amendment 34A. I do not know whether he is going to make a personal appearance today, which would excite us all, but let us see. I see that his name is on other amendments so you never know.
Traders often use third-party software in their digital content products. This software is usually provided to the trader on a no-warranty basis, meaning that the third party will not guarantee that the software works or is free from bugs. However, Clause 34 inserts a term into the contract between the trader and the consumer that the digital content is of satisfactory quality. This means that in effect the trader has to guarantee the first party’s content even when it does not have the same guarantee from the third party whose content it is. This creates a liability for the trader which is beyond its control. The clause risks stifling innovation as it would prejudice SMEs which have less negotiating power with third parties and may have to stop using third-party software that is provided without warranty.
Let me provide an example. An app provider creates a consumer-facing app using software that it has licensed in from a third party. The software licensor provides its software on standard terms which state that no warranty is given. The app provider must then make its app available to consumers subject to the provision in the Bill that the app is of satisfactory quality, even though it does not have that warranty upstream and even though it has no control over the software licensor’s portion of the app. If the app does not work because of the software licensor’s software which the app provider has no control over, and for which it has no recourse against the software licensor, the app provider will still be liable to the consumer. That is an illustration of the impact and I hope very much that my noble friend will take it into account when considering the merits of this amendment. I beg to move.
Baroness King of Bow
My Lords, this amendment would provide further exemptions to the providers of digital content, freeing them from the need to guarantee the third-party software they use. I understand the argument put forward by the noble Lord, Lord Clement-Jones; namely, that the trader may not have a warranty from the third party, and I am sorry that my contribution will be a disappointment to him. It appears to me none the less that it would reduce consumer protection, but after all, this legislation is called the Consumer Rights Bill. Again, this is a question of balance. The key point is that if the trader benefits financially from the use of the third-party software, surely it is inappropriate to load the risk on to the consumer. It is the trader’s decision to buy and use third-party software, so if that trader is unsure of its quality, it must be a risk that it undertakes and consequently should be liable for, not the consumer. The consumer cannot control the trader’s relationship with its suppliers; third-party software is very much the responsibility of the trader, and therefore we cannot support the amendment.
As I have already mentioned, if a business is selling digital content for profit, it is up to that business to ensure that all elements of the final product are of a reasonable quality. I hope to hear that the Minister shares this view.
Lord Clement-Jones
My Lords, this may be slightly unusual for me, but I thank my noble friend for an extremely well reasoned response, if I may say so. Pointing out that there is no right to reject is crucial in these circumstances.
However, my noble friend has opened a door. She talked about the Unfair Contract Terms Act. Of course, there is a big flaw in that Act: if there is no warranty about copyright between a small business and another business and it turns out that the copyright is not held by the licensing business, it is not covered by the Unfair Contract Terms Act, which leads to another amendment that I have later on in the Bill. I am sure that my noble friend will be extremely sympathetic to that when the time comes for precisely the reason that she has raised. Of course we want SMEs to be properly protected in these circumstances, and I entirely accept that in an ideal world the Unfair Contract Terms Act would be fully applicable. I look forward to the debate on my Amendment 57A. In the mean time, I beg leave to withdraw the amendment.
Lord Clement-Jones
Lord Clement-Jones
My Lords, in moving Amendment 34B I will speak also to Amendment 34C.
Under the current wording of Clause 35(1), a consumer can include in a contract for digital content a term that the content is fit for the purpose for which the consumer wants to use it without providing the trader with a realistic opportunity to evaluate, reply to, agree to or reject the consumer’s request. This means that the consumer can unilaterally include terms in a contract which go against the terms and conditions or the normal use of the content or even against the use of the content stipulated by the trader. Consumers should surely not be able to include a term in the contract on their own. A term should only be included if agreed by both parties. Clarity in a shared agreement as to contract terms is essential so that both parties understand and truly agree the contract. As currently drafted, the consumer may include a term in the agreement by implication. Contract terms should be expressly agreed, not by implication.
Surely if a consumer e-mails an online content store, saying that they intend to watch “Match of the Day” for a romantic night in, then that content would be deemed fit for that purpose under the current drafting. If it did not perform the stated purpose, the consumer would have a course of action against the store. As a second example, a consumer may e-mail an online content store saying they are buying a film to watch on a plane when they will not, in fact, be able to watch it because they need to stream the film over an internet connection and cannot download it. As currently drafted, unless the trader replies before the transaction takes place, the contract will, by implication, include a term that the consumer can use the content on a plane and the trader will be in breach of contract. I am sure there are many other possible scenarios that one might dream up, but it seems very strange that the consumer can, essentially, determine the nature of the contract in these circumstances as a result of Clause 35(1). I beg to move.
Baroness Neville-Rolfe
My Lords, I am grateful for the comments of my noble friend Lord Clement-Jones and for his constructive and telling contributions throughout this session. I note his comment about the consumer essentially creating the contract. I will answer, and try to cast light on the circumstances that we foresee for this provision, by looking at another scenario. Where a consumer e-mails a trader about their desired use for the digital content and then downloads it immediately—as is the case in the example proposed—it is highly unlikely that the consumer would be able to claim a remedy under Clause 35 from the trader if the digital content was unsuitable for that particular purpose.
This scenario would already apply to goods bought online. A consumer could e-mail a trader saying that they wanted to use the goods for a particular purpose that was not their usual purpose, and then order the goods without waiting for a response. However, there is no evidence that consumers are playing the system in this way, nor that it is causing problems for traders. The first key point is that the consumer must make known to the trader the purpose for which they intend to use the digital content. Secondly, the clause does not bite if the consumer does not rely on, or it was unreasonable for them to have relied upon, the skill and judgment of the trader.
In my scenario, we think it would be open to traders to raise a number of arguments. First, the consumer may not have made known their purpose to the trader, particularly if the time interval was such that the trader could not have been aware of the purpose at the time the contract was made. Secondly, the trader has not responded in any way and so has not exercised any skill or judgment. Finally, the consumer did not rely on the trader’s skill and judgment in these circumstances since their decision was made before the trader responded, and possibly even before the trader could have done so. So the clause is unlikely to apply in the scenario I outlined.
Amendment 34B says that we should remove the phrase “or by implication”. It is important to reflect that the requirement that a trader makes known the particular purposes for which digital content is intended implies that the trader must be aware of the consumer’s intentions. The phrase “or by implication” is to be seen in that context and may be more relevant in face-to-face sales than online ones. For example, a consumer may tell a salesperson that they are teaching their child to read when they are buying a particular piece of software but may not expressly say that they want to buy the software for the purpose of teaching their child to read. I do not want to deny consumers a remedy in such a case.
Amendment 34C requires that traders should expressly agree the purpose. Again, there are scenarios where the consumer may rely on the skill and judgment of the trader without their express agreement. For example, a consumer may e-mail a trader several times, providing the trader with an opportunity to respond to their request. The consumer may assume that the fact that the trader has not denied that the digital content is suitable for their purpose implies their agreement. Again, I do not want to deny consumers a remedy in such a scenario. Nor would I want to introduce additional steps into the purchasing process that were not necessary.
The clause replicates the related clause for goods, Clause 10, and also, crucially, that in the Sale of Goods Act. Keeping the wording consistent wherever we can retains the link with existing case law on fitness for a particular purpose, and ensures a close alignment between goods, digital content sold on a tangible medium and intangible digital content. While on the face of it, this amendment seems like a sensible clarification of the provisions for digital content, it could, as I have explained, have a perverse effect. I therefore ask the noble Lord to withdraw his amendment.
Lord Clement-Jones
My Lords, I thank my noble friend the Minister for her response. It is interesting and rather tricky. This is one of the trickiest areas that we have come across to date. I can understand my noble friend’s attachment to existing case law; that is what many lawyers would say in the circumstances. However, I want to innovate. The existing case law for goods in these circumstances could be extremely dangerous.
I accept some of the Minister’s points about the consumer having seriously tried to get the trader to respond and they have not, and about circumstances in which is entirely reasonable for consumers to rely on their skill and judgment. However, the digital world is different from the product world. The ability to communicate in one direction over e-mail without having a response adds a new dimension. It will not always be the case that it being unreasonable for the consumer to rely on the skill or judgment of the trader or credit broker will get the trader out of this particular situation, where there has been a unilateral statement that the product is required for such and such and, for some reason, the e-mail has not been received or the trader has not acknowledged receipt, or whatever.
Of all the clauses we have talked about to date, I do not think that this one is really the finished article yet. There is still some room for improvement precisely because the digital world is different from the product world. If you are buying a car on the dealer’s forecourt, you are in a very different position from that of winging e-mails and pressing buttons on purchasers’ websites. This clause does not yet reflect that adequately. I shall read what the Minister has said carefully and have further discussions. In the mean time, however, I beg leave to withdraw the amendment.
Lord Clement-Jones
“( ) the damage has not been caused or contributed to by an unreasonable use of the digital content by the consumer,( ) the damage is of a kind which the trader ought reasonably to have foreseen at the date when the contract was concluded,”
Lord Clement-Jones
My Lords, the rationale for this amendment is that Clause 46, which deals with consumer compensation for damage to a device or other digital content, fails to appreciate totally the complexities of security software products. Failures and malfunctions in software can occur for a variety of reasons, often without any connection to the design or development of the product itself. Improper use of the product is one common cause, while defects in the consumer's own equipment are another. The incompatibility of different pieces of digital content used simultaneously by the consumer is a third. In all these instances, the liability of the software provider can extend only to what is effectively in the sole control of that provider; that is, to cases where the cause of the damage sustained by the consumer is unambiguously and exclusively the product of that provider.
In the area of internet security products, urgent critical fixes for serious threats may sometimes get released before companies have tested the process extensively as there is generally a greater benefit for a greater number of consumers compared with a small number who may experience minor compatibility issues or false positives. These updates are developed with reasonable skill and care and they are tested against numerous possible known configurations. However, by their very nature the updates are a process that needs to be automated, and that is done under extreme time pressure. As a general rule, the faster an update is released to consumers, the greater the number of people who are protected from a new threat.
However, the current clause might encourage suppliers to slow down, delay or discourage the release of new security solutions or urgent critical fixes, to the ultimate detriment of consumers. Against that backdrop one must add the fact that the Bill does not allow the trader to restrict his liability under any circumstances. It then becomes apparent that the security industry will be confronted with a very real disincentive. Moreover, in the digital environment it is sometimes necessary to sustain minor damages that are unavoidable to protect the consumer from greater or further harm. A few examples may be helpful to illustrate this point because it is so specific to the digital environment.
It is better to delete a malware-infected e-mail from the consumer’s webmail account and to lose the content of that one e-mail than to have the consumer’s entire computer corrupted. It is also preferable as a precaution to temporarily block the consumer’s access to a website that is suspected of distributing malware rather than giving access and exposing the consumer to the risk of an infection. Similarly, it might be advisable in certain cases to take a service offline in order to address a security threat before making it available again to the consumer. In all these cases, the consumer or the consumer’s property may sustain damage, such as the loss of the content of an important e-mail that was deleted because of the malware that had infected it, the failure to receive a live video transmission while access to the service platform was blocked, or the inability to perform a particular online action at a precise moment because of a service outage. But in certain circumstances it has to be understood that this minor damage is a reasonable price to pay for the avoidance of much bigger harm, and Clause 46 should acknowledge that. I beg to move.
Baroness Neville-Rolfe
My Lords, I listened with great interest to my noble friend’s concerns. However, it is worth going back to the driver for this clause, which is to make it clear that all consumers of contractually provided digital content, free or paid for, may have a right to damages if the circumstances warrant it. Perhaps I can expand on that a little. The consumer already has the ability to bring a negligence claim in this area. If a consumer downloads some digital content that contains a virus, the consumer could seek to make a negligence claim against the trader if the virus caused loss or damage to the device or other digital content. However, excluding free digital content from the quality rights may leave consumers unsure that they have the ability to make a claim when free digital content causes damage, so Clause 46 clarifies the position. It is designed to reflect negligence principles and not to introduce any new burdens on industry.
On the question of consumer responsibility, I agree that traders should not be liable for damage that results from something the consumer has done with the digital content that it was not reasonable for them to do. Clearly, in this case, it is the consumer’s behaviour that has caused the damage and not the digital content. However, I do not agree that it is necessary to lay this out in the Bill. It is already implicit in the way the clause works. In order to prove a breach of the clause, the consumer has to show first that the digital content itself caused the damage to their other digital content or device. Secondly, they would have to show that the trader failed to use reasonable care and skill to prevent the damage. If the damage occurred because of something the consumer had done, then the consumer would not be able to prove a breach.
The concept of reasonableness in the application of this provision was referred to. I recognise that digital content operates in a very complex environment, as has been said often, and furthermore that no digital content trader can be expected to know every possible configuration of digital content on a consumer’s device. That is why we used the concept of reasonable care and skill in this clause. Reasonable care is part of the test of whether there was a breach in the first place. Even if the digital content can be shown to have caused the damage, there is no breach if the trader acted with reasonable care and skill to prevent the damage. This effectively protects the trader from expectations that they must have acted in every way possible to prevent the damage if it was not reasonable for them to have done so. It means that the trader would not be expected to test exhaustively for every possible scenario and that the trader’s activity would be judged against the normal standards in the industry.
The concept of reasonably foreseeable is slightly different. It addresses whether it was reasonably foreseeable that breaching this clause would cause the loss that the consumer suffered. However, expressly limiting the application of the provision to damage of a kind which the trader ought reasonably to have foreseen makes the provision more complex and creates an additional hurdle for consumers, making it harder for a consumer to secure a remedy.
My noble friend raised the issue of urgent updates and the need for them to be automated under the inevitable pressure of time. It is unreasonable—
Baroness Neville-Rolfe
My Lords, I had finished explaining the background to what we were seeking to achieve, which is important for the Committee to understand and for the record because of the original nature of the discussions on online. However, my noble friend Lord Clement-Jones was particularly concerned about emergency security updates. He rightly emphasised that they need to be carried out with great speed and that some consumers could suffer minor damage.
The position as the Government see it is as follows. The consumer has to demonstrate that the trader failed to use reasonable care and skill to prevent the damage. We would expect that all reputable traders in this area would use reasonable care and skill as a matter of course, even for security updates that obviously have to be released rapidly. However, what constitutes reasonable care and skill for urgent security updates would be judged against the normal industry standards in that context, not against the standards for regular updates.
I sympathise with my noble friend’s concerns about traders facing claims concerning minor damage caused to a few consumers during the process of an emergency update. However, if the trader has used reasonable care and skill, given the context, I would not expect that Clause 46 would be engaged. I therefore ask my noble friend to withdraw the amendment.
Lord Clement-Jones
My Lords, I thank my noble friend once again for a very clear exposition. If there is ambiguity when it comes to a court looking at some of the provisions of the Bill when it is enacted, some of the explanations may be quite useful in a Pepper v Hart kind of way. That useful exposition would give some assurance to anybody looking at the clause. I will read Hansard with great interest. I thank my noble friend and I beg leave to withdraw the amendment.
Lord Clement-Jones
Lord Clement-Jones
My Lords, in moving Amendment 43, I shall speak also to Amendment 44. Very significantly, the effect of Clause 47 is that liability under most of the provisions of Chapter 3 cannot be excluded or restricted. Broadly, the clause in its present form prohibits any exclusion or restriction of liability whatever, however reasonable it may be to exclude or restrict such liability. The intention of these amendments is to allow such exclusion or restriction of liability if it is reasonable. This is particularly important because, as we discussed earlier, software often contains defects and is known to do so. Increasingly, software is installed and runs alongside or on other applications or platforms. These are often refined and altered as new versions are released and indeed may have incidental defects as well. The performance of one software program may therefore often depend on other applications, interfaces and programs, and it is the resulting interplay that can expose unexpected defects, but these may not be evident or even exist when running the same program in another manner or configuration.
The appearance of a defect might lead to the conclusion that a software program is defective as an absolute and verifiable characteristic of that software, but many such defects may exist only in certain circumstances or in specific configurations. This is very different from a single consumer good which, operating alone, either functions in accordance with the marketed description or is defective. It may well be reasonable to allow the supplier to exclude liability for defects. It is important to stress that the amendment would permit the supplier to exclude or restrict liability only if a court thought it reasonable to do so.
The fact of the matter is that virtually all software contains defects. There are limited exceptions but they are highly specialised and tend to be found in application areas where the consequences of failure are so grave as to demand ultra-resilient and dependable software—for example, aircraft and automotive control systems, software for nuclear installations, software in surgical scenarios, or software to guide or launch weapons. To the extent that defect-free software exists, it will tend to be infinitely expensive.
Cheap consumer software is wholly different. It cannot be polished for ever and, if so, would be very expensive to buy a licence for. Apps are being developed all the time for the consumer at the cost of, for example, around 69p or free. Without the ability to limit such liability, this law could chill software development by micro-business and SMEs. Costs will be pushed up for such small developers as they will need to seek to mitigate or insure against such legal risks. It could end up by stifling innovation. It could make the developer think, “Why supply software under such a law to consumers at all? It’s too risky”.
In any event, this law is unnecessary as in practical terms the software industry will always find a workaround or fix to a problem. Such solutions happen each day and often very quickly. The rule will be divorced from reality. The remedy is not proportionate and, in the view of many in the software industry, is somewhat draconian. It is out of step with the way in which the industry works and looks after its customers, who are its lifeblood. A solution could be that such a rule under Clause 47 applies only if a workaround or fix is not implemented. Thus, unlimited exposure kicks in only if a fix fails.
The clause is too much of a blunt weapon to cure, at best, only a technical legal problem. Have the consequences been properly considered on developers? The effect of such potential unlimited or excludable liability can be foreseen as the near certainty of choking back innovation and the further distribution and take-up by consumers of advanced technologies in application areas where it is not reasonable for them to expect a perfect product—especially where the product is at zero or very low cost. In any event, it is reasonable to take into account any fix offered, together with a number of factors, in order to determine reasonableness.
In conclusion, as the Federation Against Software Theft suggests, a more equitable approach would be to permit the exclusion or restriction of liability to the extent that it is reasonable to do so, taking into account factors analogous to those under the Unfair Terms in Consumer Contracts Regulations 1999—SI 1999, No. 2083. That would enable the courts to develop a fair and equitable system on a case-by-case basis. I beg to move.
Baroness Jolly
My Lords, we have heard that this amendment seeks to introduce into the digital content chapter a right for businesses to be able to exclude or limit their liability for meeting the quality rights if doing so is “reasonable”.
We have chosen not to allow “reasonable” limitations on liability for the quality rights in any of the goods, services or digital content chapters of the Bill. This reflects the current law in relation to business-to-consumer contracts for goods. Clause 47 prevents a trader contracting out of the consumer’s statutory rights and remedies specified in that clause. This is because, in practice, the liability will for the most part be limited to the contract price of the digital content, as for goods. So there is a natural cap.
Clauses in consumer contracts that exclude liability entirely, or limit liability to significantly less than the contract price, are unlikely to be judged as reasonable anyway. I have heard industry concerns about the complex environment in which digital content works, and I know that contractual relationships between traders may be complex, as may the technical issues. Against this backdrop, it is difficult for a trader to have full control over the quality of the digital content that they supply, so traders have concerns about being liable for problems that are not entirely in their control. However, as I said earlier, is it right, from the consumer’s perspective, that traders can limit their liability? Surely if a trader offers to sell digital content for a consumer, they should take responsibility for the consumer getting what they expect.
Lord Clement-Jones
My Lords, I thank my noble friend for her response. In contrast to some of her earlier responses, I am not quite convinced by her analysis of the clause. This is a very serious potential issue for software suppliers in these circumstances. I noticed that she used the phrase “unnecessarily complex” again. That seems to me to be a splendid phrase to pop into a response when it is just too much bother to put in a clarifying phrase. Either it “does not provide enough clarity” or it is “unnecessarily complex”.
Although I am not wholly convinced by my noble friend’s response, I will consider it very carefully, particularly in the light of existing liabilities. My understanding of the law as it is at present is that it is not the case that liability is unlimited. I believe the clause is creating a new form of absolute liability in these circumstances. I may be wrong, but I need to check that. Therefore, I am not convinced by the Minister saying, “We do not want to alter the current legal regime and that is why we have got the clause as it is”. My belief is that the clause will add to liability and create a disincentive, and that it needs mitigating in some different respects. I have no doubt that we will come back to that at some stage in the future. In the mean time, I beg leave to withdraw the amendment.