by David Phelan , Laura O'Farrell September-22-2021 in Commercial & Business, Competition Law
The Scheme of the Consumer Rights Bill 2021 (“Scheme”) seeks to substantially reform, modernize and consolidate existing consumer protection legislation spread over different pieces of primary and secondary legislation. Once enacted, the Consumer Rights Act, along the lines proposed in the Scheme, will be the most substantial reform of consumer contract law in 40 years.
The Scheme proposes to give effect to Directive (EU) 2019/770, on contracts for the supply of digital content and services and Directive (EU) 2019/771, on contracts for the sale of goods (collectively “Digital Content and Sales Directives”) as well as the main provisions of Directive (EU) 2019/2161, on the better enforcement and modernization of EU consumer protection rules (“Better Enforcement Directive”).
The Scheme was published for public consultation by the Department of Enterprise, Trade and Employment (“the Department”) in May 2021. The Department called upon interested parties to submit views on the Scheme. The public consultation process completed on 30 June 2021 and the submissions will be considered before the text of the Consumer Rights Bill is finalized.
Key Reforms
The Scheme only applies to business to consumer transactions. The key reforms include new statutory rights and remedies in contracts for digital content, and stronger consumer rights with regard to quality, fitness for purpose and delivery in relation to consumer goods and/or services generally.
The reforms seek to address significant gaps in current legislation, notably those which relate to remedies available to consumers. The Competition and Consumer Protection Commission, the statutory body already responsible for promoting compliance with, and enforcing, competition and consumer protection law in Ireland, is set to gain increased enforcement powers as against traders who fail or refuse to provide a remedy or a reimbursement to which a consumer is entitled.
Amongst the most interesting reforms is a ‘black-list’ of standard contractual terms, which will simply be unfair to impose on consumers going forward. At present, there is a non-exhaustive list of contractual clauses which the law presumes to be unfair in business to consumer contracts. This “grey list” imposes an obligation on every business engaging in contractual negotiations to ensure they act in good faith, deal openly and fairly, ensure contact terms are not misleading and use plain and intelligible language. The proposed “black-list” includes contract terms which are always unfair and contract terms presumed to be unfair.
Next Steps
Any feedback and scrutiny from the public consultation will be carefully considered before the text of the Consumer Rights Bill is finalized. Once finalized, it will be initiated in the Houses of the Oireachtas, and it must pass through the various stages in the Dáil and the Seanad, before it can be signed into law by the President. Further changes are likely during these stages, though many components of the underlying European legislation must be included in the enacted legislation as part of Ireland’s membership of the EU.
Member States are required to adopt measures to give effect to the Digital Content and Sales Directives by 1 July 2021 (though that deadline has been missed in Ireland) and to apply those measures from 1 January 2022. The provisions of the Better Enforcement Directive must be transposed into domestic law by 28 November 2021 and applied from 28 May 2022.
Conclusion
The consolidation and reform of law in this area into a single piece of law will result in a significant enhancement of consumer protection rights, and will trigger a requirement for businesses to review their standard terms with their consumer customers. Given the importance of this Bill, we will be providing updates during its passage through the legislative process.
For further information on any of these issues, please contact David Phelan dphelan@hayes-solicitors.ie or Laura O'Farrell lofarrell@hayes-solicitors.ie at Hayes solicitors LLP.
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About the Authors
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David Phelan
David is Head of the Commercial & Business team at Hayes solicitors and advises a number of the firm’s major corporate clients. He advises on a wide range of corporate and commercial law issues. He has expertise in advising on general corporate and commercial matters, particularly in the manufacturing, retail, aviation, sports and motor sectors, and also frequently advises clients who operate in regulated areas.
Laura O'Farrell
Laura is a solicitor in the Commercial & Business team. She practices in commercial litigation and dispute resolution and acts for a variety of companies, financial institutions, State bodies and individuals in contract law cases, enforcement and recovery actions and general commercial litigation matters. Laura also provides advice on a wide range of commercial and business law matters and regulatory requirements.