Consumer Remedies for Faulty Goods

Current project status

• Initiation: Could include discussing scope and terms of reference with lead Government Department
• Pre-consultation: Could include approaching interest groups and specialists, producing scoping and issues papers, finalising terms of project
• Consultation: Likely to include consultation events and paper, making provisional proposals for comment
• Policy development: Will include analysis of consultation responses. Could include further issues papers and consultation on draft Bill
• Reported: Usually recommendations for law reform but can be advice to government, scoping report or other recommendations

This project is complete. Some of our key recommendations have been accepted by the Government and are included in the Consumer Rights Act 2015

The Consumer Rights Act 2015 forms part of a package of measures to clarify consumer law. These measures draw on three joint reports by the Law Commission and Scottish Law Commission.Read more about our consumer rights work and the Bill.

The problem

Currently, UK consumers have a legal “right to reject” faulty goods. This means a right to a refund if they act within “a reasonable time”. By contrast, under the European Consumer Sales Directive, consumers’ first recourse is to repair or replacement.

In the report that concludes this project, we recommend that the right to reject should be retained in the UK as a short-term remedy of first instance.  It is a simple, easy to use remedy which inspires consumer confidence. We recommend that in normal circumstances, a consumer should have 30 days to return faulty goods and receive a refund, with limited flexibility for special circumstances such as perishable goods, or goods which both parties know will not be used for some time.

In October 2008, the European Commission published a proposal for a new directive on consumer rights which, if adopted as published, would mean that the UK would have to abolish the right to reject. However, this proposal has now been dropped.

The project

This is a joint project with the Scottish Law Commission.

The Department for Business, Enterprise and Regulatory Reform (now the Department for Business, Innovation and Skills (BIS)) referred this issue to us in December 2007, on the recommendation of the Davidson Review. The Davidson Review was set up by the Chancellor of the Exchequer in 2005 and recommended that the DTI should ask the English and Scottish Law Commissions to produce a joint report on the reform and simplification of remedies available to consumers relating to the sale or supply of goods.

Our report followed a consultation, which closed in November 2008.  The responses we received showed that there was strong support for keeping the right to reject amongst consumers and business groups alike. Consultees told us that the only problem with the right to reject is uncertainty over how long it lasts.  Therefore, the majority also agreed with our proposal that there should be a normal period of 30 days in which to exercise the right to reject, with a limited amount of flexibility to extend or reduce this period.

We commissioned market research among consumers which showed that 94% of consumers felt that the right to a refund for faulty goods was important to them, and 89% thought it should be retained even though other remedies (repair and replacement) are available. The research also provides support for a 30 day normal period in which to exercise the right to reject. When consumers were asked to say how long the right to reject should last, the most common reply was that it should last for about a month.