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Taking consumer rights seriously

According to a recent report published by Ombudsman Services, Britons made 52 million complaints last year, with one in eleven people taking their complaint to an ombudsman and one in twenty-five to a small claims court.

Despite these astonishing figures, consumer problems are often portrayed in fairly stereotypical ways: on the one hand are rogue traders and businesses on the make, on the other hand are whinging complainants fussing over nothing. Other times, consumer issues are ignored altogether.

Ronald Dworkin, the eminent legal philosopher, famously called for rights to be taken seriously. As we approach World Consumer Rights Day, this blog looks at recent developments in the UK and Europe which reveal both opportunities and challenges for those interested in making consumer rights a reality.

The blog focuses on the EU’s Alternative Dispute Resolution (ADR) Directive and the UK Consumer Rights Act.

A new world for consumer ADR

The ADR Directive was recently implemented across Europe and represents one of the most radical developments in the consumer rights field in recent times. The benefits of the ADR Directive include:

• A broadening of access to dispute resolution for consumers

• The provision of an alternative to taking disputes to court

• The creation of minimal standards for alternative dispute resolution providers

• An emphasis on quick, consumer friendly dispute resolution

In addition, a sister piece of European legislation, the Online Dispute Resolution Regulation, provides for a platform for the resolution of online disputes across Europe, recognising the increasing amount of consumer activity taking place online. The platform went live across Europe in February 2016.

… but some old problems remain

These developments are to be welcomed and represent a positive step towards the better protection of consumer rights. But some challenges remain:

• Traders are not compelled to take part in ADR

• Standards do not require ADR providers to be fully independent

• Consumer confusion may be created as a result of multiple ADR providers being created

• The system for regulating ADR providers is fragmented

A further, bigger question is whether the new European framework for ADR will allow for the vindication of rights. The jury is out about how effective ADR providers will be in resolving consumer disputes and whether they provide the same level of rigour, quality, and protection as might be expected from the traditional court system.

Simplicity at last for the consumer?

In the UK, a major new piece of legislation is now shaping how businesses interact with consumers. The Consumer Rights Act (the Act) brings a number of existing legal protections into one place, but also provides new protections for consumers. These include:

• Better protection for digital goods (such as online media content)

• A 30 day short term right to reject faulty and misdescribed goods

• A simplified regime controlling unfair contract terms which have been widened to make it easier for consumers to challenge hidden fees and charges

• Clarification of the legal position in relation to services, particularly in Scotland where consumers have new statutory rights

The Act has been welcomed by business and consumer organisations alike as simplifying the existing law and making the law clearer and easier to understand. Any concerns that some provisions of the Act may have reduced consumer rights need to be balanced against the fact that the Act has strengthened others and that it has overall considerably reduced complexity.

Consumer powers – more or less?

One aspect of the Act that has received less attention is its impact on the powers of Trading Standards Officers to enforce consumer protection legislation more widely. Existing trading standards powers had developed piecemeal and were not necessarily fit for a modern enforcement regime. The Act has simplified the powers into one generic set although there are some concerns that the desire to reduce regulatory burdens on business has also reduced the overall effectiveness of the enforcement powers of trading standards.

Much more positively, the Act also includes ‘enhanced consumer measures’ which give enforcers including trading standards the power to seek compensation, redress or take some other from action on behalf of consumers when taking action under the Enterprise Act. For example, Trading Standards could ask the courts to compensate a group of consumers who have entered into a mobile phone contract as a result of misleading claims provisions or have been subject to an unfair contract term and could even require the business to join an a certified ADR scheme.

Conclusion – taking rights seriously?

Consumer rights have recently been strengthened, but more could be done to make sure that consumers get a fair deal in day-to-day service delivery and when they have cause to complain. And while complaints have been increasing, this masks the fact that many people still don’t complain when they have a consumer problem. As Lewis Shand Smith, Chair of the Ombudsman Association noted recently, “We're still seeing consumers ignore millions of problems each year because they'd rather suffer in silence than go through the perceived hassle of complaining”. There are signs that consumer rights and redress are starting to be taken seriously, but there remains plenty of scope for improvement.

Chris Gill and Jane Williams

Chris Gill and Jane Williams are lecturers in the Consumer Dispute Resolution Centre (CDRC) at Queen Margaret University. The Centre runs the MSc Dispute Resolution, the world’s first master’s degree specifically for ombudsman and complaint handling professionals. To mark World Consumer Rights Day, an online open evening will be held for prospective students on 15 March 2016 between 18.30 and 19.30 (UK time). Please email cdrc@qmu.ac.uk to register your interest for this event or register directly here: https://www.eventbrite.co.uk/e/qmu-msc-dispute-resolution-virtual-open-evening-tickets-22234872101?aff=eac2

For more information on the MSc Dispute Resolution, visit: http://goo.gl/72F1YD