A new EC directive has worried people in the UK. David Smellie reassures them that their rights have not changed. Yet...
Directive 1999/44 has recently caught the headlines with suggestions that once implemented it will require sellers to provide consumers with a two-year guarantee. This is not strictly correct and although the directive will provide UK consumers with additional rights the measures are not likely to be as far-reaching as has been suggested.
Given the rights already enjoyed by consumers in the UK, the changes may not necessarily have that noticeable an effect on insurers.
The directive provides that if goods fail to conform with the contract of sale and where that lack of conformity becomes apparent within two years from delivery of the goods, the seller will be able to have them repaired or replaced free of charge or to have an appropriate reduction in the price.
UK already there
In some ways this is less than the rights already enjoyed in the UK where proceedings can be brought within a six-year limitation period if the goods fail to comply with the contract. In addition, the directive provides that other remedies (such as repair or replacement) have to be explored first before the consumer can claim his money back.
However, one of the more important aspects of the directive is that there is a rebuttable presumption that the lack of conformity existed at the time of delivery of the goods if it becomes apparent within the first six months. This provision shifts the onus of proof from consumer to seller and will make it very much easier for consumers to return goods and harder for sellers to resist. This in turn will flow up the supply chain. After the six-month period the onus is shifted back to the consumer to show the goods were not faulty when delivered.
Improvements
Another improvement is that while complaints have been historically about the standard of installation instructions, any shortcomings in these could now cause problems for suppliers. The directive proposes if there is a shortcoming in installation instructions and the consumer installs the goods and damage is caused, then the consumer can have a claim for lack of conformity as a result of the shortcomings of those installation instructions.
The directive does not address what happens after the two-year period expires. Since the directive is not intended to reduce any of the rights currently enjoyed by UK consumers then we can expect these, including the six-year limitation for bringing actions for breach of contract, to remain.
More complaints
The legislation - at best this will be implemented in autumn 2002 - could result in more complaints, returns and claims by consumers against suppliers who in turn will pass the effects up the chain.
Retailers, suppliers and manufacturers should be looking now at their terms and conditions and any relevant insurance. The market for purchased warranties and guarantees may not be radically altered.
The directive will mean there will still be uncertainties, particularly after six months and the two-year period and anyone wanting certainty as to who is paying for what may still wish to insure. n
David Smellie is a solicitor at Davies Arnold Cooper
