AMDEA has recently responded to a consultation issued by the Law Commission (and the Scottish Law Commission) on Consumer Remedies for Faulty Goods.

This came as a result of the European Commission issuing a proposal on a new Directive on Consumer Rights. BERR, the Department of Business, Enterprise and Regulatory Reform decided this would be a good time to completely review the legal remedies available to consumers when they buy goods "which do not conform to contract".

The use of this phrase alone serves to indicate that nothing is ever simple in the world of contracts and consumer law. BERR asked the two Law Commissions to look into ways of making consumer redress more effective but also - where possible - more simple.

In the response document issued by AMDEA we welcomed attempts to clarify and simplify the law (or the two sets of laws, since the law of Scotland is different). We added however that reviewing the law alone is not enough.

To start with, we believe that any changes in the law should be accompanied by a campaign to educate consumers as to what their rights are - and also what is not covered.

Interpreting the law

The lines between the law and current custom and practice are becoming somewhat blurred. The Law Commission is quite clear; it is considering remedies for goods which are faulty. This includes - at least for the present time - the return of faulty goods. By implication product that isn't faulty isn't covered, and whether a manufacturer takes it back and credits it is a commercial negotiation between the manufacturer and the retailer.

Returned goods are now a considerable cost to both manufacturers and retailers. Of course, we have an obligation to produce and sell products of quality and fit for the purpose for which they were intended. However,  AMDEA members are finding that goods are being returned to them with minor faults or no faults at all.

There are, of course, commercial pressures at play here. Some retailers see value in presenting to the public a policy of accepting goods back with no questions asked. Also, it can be difficult for the staff of a busy store to examine or test the goods being returned by a customer. But we as manufacturers and retailers must accept that the costs of such policies are considerable and we should strive to reduce these.

Apart from Spain, other European countries do not appear to have this problem on anything like the scale of the UK. There is a danger that the considerable emphasis placed by the Law Commission consultation document on the "right to reject" may muddy the waters in this regard and leave consumers believing that they have a legal right to reject a product for whatever reason.

Unanswered questions

Of course, the Law commission paper has several positive aspects and it raises many interesting questions - for example about how to deal with minor defects and re-occurring faults. It also addresses the "six month reversal of proof" whereby if a fault arises within six months of delivery, it is presumed to have existed at the time of delivery. There is also consideration of how best to calculate damages, where appropriate.

The time-scale for introduction of the new legislation is not yet clear, but the significance of this issue cannot be ignored. At AMDEA we will continue our dialogue with officials and legislators both in the UK and in Brussels.

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