Consumer Rights Bill

Viscount Younger of Leckie Excerpts

Wednesday 19th November 2014 Lords Chamber

[Viscount Simon (Lab)]

My Lords, it had been my intention to speak. However, I, too, have been briefed by the SMMT, so I shall not repeat what the noble Lord has spoken about.

[Viscount Younger of Leckie (Con)]

My Lords, my noble friend Lord Clement-Jones makes an interesting point about extending the law to allow multiple repairs beyond repair one but within a defined period of time. It is still not entirely clear what this time period would be. I noted that he said that it would be a determinate end-point of repair.

It is a laudable proposition but for the fact that it could put undue cost burdens on small businesses. I give the example of a local business selling a complex piece of machinery. It comes in for repair once and then on a couple of other occasions before it dawns on the trader that the repair is as a result of the customer perhaps not using it properly or misusing it. However, up until this point, it is the trader who by law, under my noble friend’s amendment, would bear all the costs of the transport and the re-repair.

Therefore, although the trader could make the sale contractual to pre-empt or prevent this, I believe that it is more proportionate and less prescriptive to retain the one-repair proposal as laid down in the Bill.

[Baroness Neville-Rolfe]

My Lords, following the discussion my noble friend Lord Clement-Jones described in Grand Committee, I recently met representatives of the motor industry to discuss their concerns about the issue of one repair and we had a constructive discussion that included other amendments. I am very pleased also to hear from the noble Viscount, Lord Simon, about his discussions with the motor industry and, of course, to see my esteemed predecessor, my noble friend Lord Younger, making a very good point about the costs on traders.

I understand—although I am not a huge fan of motor cars—that motor vehicles are very complex goods and there can be a tendency for faults to reappear after repair. However, a limit of one mandatory repair or replacement sets an important and appropriate balance. The Bill provides key simplifications, as we all know, which we expect to benefit both consumers and traders, including the motor industry. The Bill sets a 30-day period for consumers to exercise the short-term right to reject, whereas in the past, claims have been made in relation to motor vehicles some months after the car was bought. The amendments we have laid on deduction for use, which my noble friend Lord Clement-Jones referred to, recognise the particular nature of motor vehicles, being complex and subject to rapid depreciation. He also noted in Grand Committee that the issue of one repair is pertinent to the final right to reject. I am grateful to my noble friend for going away and amending his amendment.

To the extent that the Bill’s provisions regarding one repair may impact on the motor industry, I think that being able to apply a deduction for use in the first six months mitigates against that and is an important and complementary protection. I am not blind to the needs of the industry, but the revised amendments go too far. They would undermine both the consumer protection and the clarity that the Bill provides. The limit of one mandatory repair or replacement before a consumer is entitled to some money back follows consultation by both the Law Commission and BIS, both of which identified that approach as being the preferred option. The Law Commission recommended that there should be greater clarity as to when a consumer can move from repair or replacement to access some money back. The Bill’s one repair or replacement provision gives that clarity and I am concerned that it should not be undermined. Importantly, the Bill does not prevent the consumer from agreeing to further repairs. I think consumers—certainly a consumer like myself—tend to act reasonably with a motor trader, especially if they are treated reasonably in return. As long as the trader keeps them well informed I think most people would be willing to accept further repairs. If, however, the relationship breaks down, the consumer should, and will under the Bill, have the right to exit the contract if the trader has tried and failed to fix the fault.

I also feel that a time limit set by the power included in the amendment would fail to provide the necessary safeguard to protect the consumer fully. There is a real risk that such a time limit would become the default, leaving consumers stuck waiting. Without the certainty of being able to ask for money back after one failed repair, consumers would have to show that a repair process had caused them significant inconvenience or taken more than a reasonable time. While these are important protections within the Bill, we do not think they are sufficient alone for goods. This was the very issue on which the Law Commission recommended that there should be further clarity. The evidence submitted to the Law Commission’s consultation showed that it is unclear when the point of significant inconvenience is reached, allowing considerable scope for dispute.

All of these concerns are compounded by the fact that these amendments are so broad in scope. We believe that as drafted they could apply to all goods, even a table that needed more than one repair. Essentially, the amendment seems to cover both complex faults in simple goods and simple faults in complex goods. It would be unclear whether or not the consumer had to make the goods available to the trader more than once. It would also be all too easy for an unscrupulous trader to argue for repeated repairs—even on simple non-complex goods if they claimed that the nature of the fault justified it.

My noble friend mentioned guidance and perhaps, without commitment, I can come back to him on that issue.

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[Lord Stoneham of Droxford (LD)]

My Lords, in supporting the Government on this amendment I feel a bit like Pietersen, the cricketer, taking on the cricket establishment, but since I have always admired his bravery and foolhardiness, I shall have a go. I think there is a dangerous presumption in this debate that the secondary ticketing market is a bad thing and that people would like to do without it. Balancing that, I accept, there is a genuine belief that by increasing regulation, by demanding more information, we will eliminate fraud. I think that approach is misguided. I do not think that you necessarily end fraud by increasing regulation.

The secondary ticketing market fulfils a very useful purpose for people, particularly those who buy tickets and are often made to buy them a year ahead of the event. When they do not want to use them, they can dispose of them appropriately; 70% of people buying tickets want that secondary market to continue. We should be supporting recognised and established brand leaders that work in this market and do all that is required. They guarantee their tickets, and people should use them; we should encourage more people to use those established brands. If they did that, the market would work better; that is how to attack fraud.

If you are attacking fraud, where else do you look? You look first of all at the computer-operated systems that enable people to buy mass tickets. That is where you ought to direct your attacks, and there are some encouraging signs there. But you also need to question the sports operators. Too many of them are greedy. They give their tickets to people in hospitality, who then do not need them and try to dispose of them through secondary markets. If the sports operators want an improvement, the first thing that they could do is to improve the affordability of their tickets, so they are not forcing the price up, which encourages this sort of fraud.

Ticket sellers are already subject to the regulations, as we have heard. Is it a good Conservative or Liberal principle that, if the regulations are not working, you add to them? Surely you question them. Are we really saying that just adding a name to a ticket will eliminate fraud? I do not believe that either. We should encourage established secondary sellers, so that they can help us to undermine the bad sellers of tickets—the touts, if you like. Online selling and ticketing is actually a huge improvement in terms of control on the old idea whereby tickets were sold by street traders. So instead of having an emotional look at this issue—and I accept that there is a lot of emotion about it—we should look at it frankly and in great detail to see what we are doing here, rather than adding to regulation that is not working and not actually looking at the real areas where fraud is being perpetrated.

[Viscount Younger of Leckie]

My Lords, I agree with much of what the noble Lord, Lord Stoneham, has said. I was unable to be present for that part of Committee that focused on the emotive issue of secondary ticketing, but I have read Hansard, and my first point is that I have some sympathy in reading the anecdotes and anomalies raised, notably by the noble Lords, Lord Stevenson and Lord Clement-Jones, as well as my noble friends Lord Moynihan and Lady Heyhoe Flint, among others.

I admit that there is a range of frustrating issues over the sale and resale of secondary ticketing, which have been cited. I also note that the noble Lord, Lord Pendry, is in his place; he noted in Committee that these matters have been debated over 20 years, which shows that they are not easy. I was pleased to meet my noble friends Lady Heyhoe Flint and Lord Moynihan to discuss these matters, when in my role on the Front Bench, so I am aware of many of the issues.

I start by stating the obvious. As a principle, we should not legislate or regulate when either there is existing regulation in place—and I note the comments from my noble friend Lord Deben that that means good legislation—or there are solutions coming from the market. The question is whether safeguards are in place and whether they are being utilised. In the case of business-to-consumer sales of tickets, the Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013 set out clearly as a list what information must be provided on tickets. There are more than 20 pieces of information requirements to which the consumer has access, and there is guidance for consumers on how to apply them to tickets. If there is a breach, the whereabouts of your seat is important—for example, if you are unexpectedly placed behind a pillar when you are watching a cricket match. Here you have redress under the Consumer Protection from Unfair Trading Regulations 2008. Other potential breaches can come under the Fraud Act, as mentioned today, as an offence. The sanctions including fines or imprisonment are in place. Given the comments of my noble friend Lady Heyhoe Flint about the law being ineffectual, I would however ask the Minister if it would not be a good idea to do more, such as better publicising the sanctions and advertising warning notices for those traders, or traders posing as consumers, who might be minded to commit such offences. Of course, more offenders caught will act as a deterrent—or should do.

--- Later in debate ---

[Viscount Younger of Leckie]

My Lords, I rise to speak to Amendment 28 and I emerge once again from my long and deep perusal of Hansard, having not been present in Committee. I want to focus on the important matter that has been raised by my noble friend Lady Oppenheim-Barnes on the question of displaying rights at the point of sale.

I have read the amendment carefully, but I want to focus initially on a couple of issues. The amendment 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”.

How does one define “essential information”? I note proposed new subsection (3), which states:

“The detail shall be developed by the British Standards Institution”,

but I would like to point out that in proposed new subsection (2), which states that the,

“information shall be proportionate to the transaction”,

two issues arise. I would argue that it is very broad and not clear enough, as with proposed new subsection (1), to be on the face of the Bill. When one is talking about being “proportionate to the transaction”, one has to bear in mind that sales take the form of so many different types of products. There could be a very high volume of low-priced products, so there would be an immediate issue of how to tackle it.

I digress slightly and want to go back to the Committee stage, as I took a keen interest in the speech given by the noble Baroness, Lady Hayter. I am interested and glad to see that she has stepped back from promoting the idea of consumers’ statutory rights being read to them, or given to them at the point of sale. Perish the thought that this might happen and that on a busy Saturday long queues form at petrol stations while cashiers struggle to meet legal requirements in reading customer rights when selling non-petrol or non-food goods. I am sure that the noble Baroness did not necessarily think about that aspect, and she may well have thought at that stage that such information could be placed on a receipt. Then there was the matter of gaining consistency in this aspect of the law in tandem with effecting adequate training for cashiers and sales staff. I feel that, inadvertently, we may have prevented a gain in incidents on the shop floor as a result of consumers becoming somewhat impatient while waiting to be served.

The important point was made in Committee that communicating consumer rights is relevant for each product sold and could be open to confusion when a trader’s policies and terms exceed the statutory rights. There is a danger that reading out rights might act as a negative or chilling factor by implying, perhaps tenuously, that the product might just be defective.

I wanted to put this amendment in context because I am pleased at least that my noble friend Lady Oppenheim-Barnes has reduced that position in her amendment so that information on consumer rights should be displayed but only at the point of sale. However, as she might expect, I am not in favour of this being set in law either. I believe that it is proportionate to set firm guidelines, which came out of the implementation group, and to go for a voluntary approach.

I believe that this particular departure will undertake a number of key points. First, it will lead to a behavioural change for businesses to display information on the rights of consumers. Secondly, it will be pour encourager les autres; in other words, other businesses will do the same. Thirdly, consumers will become more attuned and astute, so that where businesses are not voluntarily displaying high-level information on their rights, they will be pulled up. There is a caveat that after a while consumers will tire of seeing the same old notices being displayed and looking even more tired than themselves.

For all those reasons, I do not agree with the idea that this amendment should be set in law, so it should not go forward.

[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.