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Consumer Rights Bill ABI analysis

The Department for Business, Innovation & Skills (BIS) has introduced the Consumer Rights Bill (pdf 527kB) into Parliament.

Before the Bill was published, BIS considered the views of many stakeholders and the BIS Scrutiny Committee in Parliament. 

The ABI has produced the follow analysis of the Bill for members:


  • Definition of ‘consumer’ has not been extended to small businesses although BIS will wait to examine research that has been commissioned by the Federation of Small Businesses on small businesses as consumers (Cl.2(3)).


  • No change was made to the current standard for services to be performance with reasonable care and skill although we expect this to be quite controversial as the Bill progress through Parliament and will follow this debate closely (Cl.49).
  • No change was made to the requirement that information given by the trader about the trader or service will be binding. BIS did consider the request to delete this requirement but believed that consumer must have the right to rely on information provided by the trader about the trader or service when deciding to enter in the contract. (Cl.50). 
  • New changes made in relation to other law on contract terms to specific sectoral requirements will prevail over the Bill where they impose a stricter duty (Cl.53).
  • No change made to the available remedies if statutory rights under a service contract are not met. The ABI has previously argued that either a repeat performance or a price reduction may not always be practical or what consumers need. This is also at odds with the Financial Ombudsman Service who use a standard of ‘putting the consumer in the position they would have been in – financially – if the business providing that service had not got it wrong in the first place.’ We will continue to argue for this to be amended.

Unfair Contract Terms

  • No changes were made to meet Scrutiny Committee (SC) demand that price is only exempt from the fairness test where it is the ‘main price.’ BIS did not take this concern into account as trying to define main or core price is likely to vary in practice between contracts and opening a debate in this area would only serve to confuse the reference on main price that derives from EU law.  The Law Commission had also looked into this issue and recommended that BIS followed EU law saying that the current tests in the Bill were sufficient to enable courts to assess fairness of terms. (Clause 64).
  • No changes were made to the SC demand prominence is only achieved where a consumer “appreciates the significance” of that term. BS rejected this request saying that the current requirement is already a significant enhancement from the current position and through this new requirement, that consumers will have significant protection from unfair terms in the small print (Clause 64(4)). 
  • Changes were made to drop the “onerous and unusual” provisions that appeared in Clause 71 of the old Bill with BIS agreeing that it may not have benefitted consumers and risked undermining the fairness test. 
  • No changes were made to the ‘Grey List’ to meet SC demand for terms which have the effect of permitting a trader to increase the price of services during a contract period without a valid reason or where the consumer is not free to dissolve the contract without being disadvantaged. BIS felt that the Grey List already covered terms which protected the consumer from this happening (Schedule 2 part 1 clause 11) and disagreed that a further term should be added believing it would be overly burdensome for business and ultimately impact on costs for consumers.


  • BIS confirmed that guidance will be produced on Unfair Contract Terms on the prominence requirement on the request of stakeholders.  It is yet to be determined whether it will be sector specific and by the relevant regulator. The ABI will follow up on this development. 
  • BIS shares the objectives of the Citizens Advice Bureau to ensure that consumers are made aware of their new rights but are still considering whether the provision of mandatory information at the point of sale would be valuable or if they are more likely to absorb information about their rights when a problem has arisen. The ABI will also follow up as BIS make this decision.

Next steps

The first reading in the House of Commons took place on Thursday 23 January, 2014 and the second reading of the Bill is scheduled for Tuesday 28 January, 2014. This is likely to be a politically contentious Bill, as the Opposition has clearly positioned itself as strong supporters of consumer rights.

Government is taking a strong stance on this Bill and is keen to hold its position, as many of the decisions made were from advice provided by the independent expert input of the Law Commission. 

The ABI is currently working on relevant briefings with MP’s to outline our major concerns with the Bill.

If you have any further questions, please contact Raluca Boroianu-Omura, Manager, Conduct Regulation.

For more infortion on the Consumer Rights Bill, visit the Government website.

Last updated 01/07/2016