Law Commissions oppose EU abolition of consumer right to reject faulty goods

The European Commission published a plan for a new Consumer Rights Directive last October. The Law Commissions, which exist to advise Government on the need for law reform, have called for significant changes to that plan.

At present, there are two legal regimes.

Firstly, under the UK's Sale of Goods Act, consumers are entitled to reject the goods and receive a full refund, provided they act within “a reasonable time”. However, courts have given little guidance on how long a reasonable time lasts.

Secondly, following a European Consumer Sales Directive of 1999, consumers are entitled to a repair or replacement. If the retailer is unable to repair or replace the goods in a reasonable time or without significant inconvenience, the consumer may then ask for a refund or a reduction in price.

There has been little attempt to integrate these two regimes. Consumers may use either, which leads to confusion and complexity.

The European Commission's plan seeks to reform the law in this area. But its proposed Consumer Rights Directive would, if adopted as published, mean that the UK would have to abolish the right to reject.

The Law Commissions consulted on the proposal last year and received strong support for retaining the right to reject, from business groups as well as consumer groups.

David Hertzell, the Commissioner leading the project for the Law Commission of England and Wales, said 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," said Hertzell. "Consultees told us that the only problem with the right to reject is uncertainty over how long it lasts."

The Sale of Goods Act of 1979 provides that a buyer is deemed to have accepted goods "when after the lapse of a reasonable time he retains the goods without intimating to the seller that he has rejected them."

After that "reasonable time" the consumer is entitled only to damages. The Law Commissions found that case law on what amounts to a reasonable time provides little guidance. "In one case a consumer was said to have accepted a new car in less than four weeks; in another, the buyer was entitled to reject a car after seven months," says their report.

The Law Commissions called for a right to reject that lasts for 30 days by default.

"We recommend that in normal circumstances, a consumer should have 30 days to return faulty
goods and receive a refund, with flexibility built in for special circumstances such as perishable
goods, or goods which both parties know will not be used for some time,” they said.

The Hon Lord Drummond Young, Chairman of the Scottish Law Commission, said: “Legal advice is rarely sought for consumer disputes so it is particularly important that the law on consumer remedies is easily understood, remembered and applied. Our proposals will result in a considerable simplification of the law."

In addition to the proposals on the right to reject, the Law Commissions also recommend that the Government should take steps to ensure that consumers have a much better understanding of their legal rights.

The proposed Directive has been drafted as a measure of “maximum harmonisation”, which means that member states could not maintain or adopt provisions diverging from those it lays down.

The Law Commissions said they hope that their paper will influence the European Debate and note that it would be possible to implement their reforms in the UK only, provided the Directive is adopted as a measure of "minimum harmonisation" instead, which means that member states may maintain or adopt measures which give greater rights.