Consumer Rights Bill 2022: Enhanced Consumer Protection – Advanced Trader Compliance

Published 22 August 2022

Overview

The Consumer Rights Bill 2022 (the “Bill”) was initiated in Dáil Éireann on the 22 April 2022, and is well on its way to entering the business-to-consumer fray. The Bill proposes an upheaval in the Irish consumer protection legal landscape, and was accordingly branded as “the biggest overhaul of consumer rights law in 40 years” by Minister of State Robert Troy.

Purpose

The purpose of the Bill is to consolidate and modernise consumer rights legislation for the sale of goods and supply of services, ensuring that the updated legislation is more in keeping with the digital age. In modernising the current legislation, the Bill aims to enhance consumer rights, protections and remedies.

In addition to updating the current Irish legislation, the proposed Act will transpose:

• Directive (EU) 2019/770 on certain aspects concerning contracts for the supply of digital content and digital services (the “Digital Content Directive”);
• Directive (EU) 2019/771 on certain aspects concerning contracts for the sale of goods (the “Revised Sale of Goods Directive”); and
• The main provisions of Directive (EU) 2019/2161 on the better enforcement and modernisation of Union consumer protection rules (the “Omnibus Directive”).

The transposition of these directives is overdue, as the deadlines for the Digital Content Directive and the Revised Sale of Goods Directive passed in July 2021, along with the deadline for the Omnibus Directive passing in November 2021. The Bill will therefore not only strengthen consumer rights legislation, but will also provide for Ireland to meet its obligations under EU law.

Enhanced Consumer Protection

In attaining enhanced consumer protection, the Bill outlines various requirements for traders in conducting their business. Businesses which contract consumers for the sale of goods, (digital) services and digital content are expected to manage legal risks in relation to the following key aspects:

1. Conformity

The object of the contract must conform with both:

• Subjective requirements – quantity, quality, functionality, interoperability, fit for the agreed purpose, installed and updated as specified in the contract;

and

• Objective requirements – applicable laws, standards, codes of conduct, sample or model/trial version provided, delivered with any accessories and instructions (including installation or integration), possessing the features of durability, compatibility and security expected, particularly as referred to in public statements.

Traders should be especially cautious, as the burden of proof shifts to them for any lack of conformity which becomes apparent during the 12-month period after the supply. Consumer contract terms cannot limit the trader’s liability.

2. Commercial Guarantees

Traders are liable for commercial guarantees provided by other guarantors, unless they express the contrary or give their own commercial guarantee.

3. Information and Transparency Requirements

The Bill imposes specific information requirements for on-, off-premise and distance contracts.

Consumer contract terms will be subject to stricter transparency requirements (e.g. plain language, presented clearly, easily available, with novel terms being brought to consumers’ attention and the terms’ financial consequences being understandable).

4. Unfair Contract Terms

Crucially, the Bill clarifies that a term is unfair if it causes a significant imbalance in the parties’ rights and obligations to the detriment of the consumer and extends the lists of contract terms which are presumed to be unfair (greylist) or are outright prohibited (blacklist).

Advanced Trader Compliance

As a means of ensuring that businesses adhere to such enhanced consumer protections, the Bill also provides for areas of advanced trader compliance.

1. Increased Enforcement Powers

A critical element of the Bill’s advanced trader compliance is that of the increased enforcement powers given to authorised bodies, including the Competition and Consumer Protection Commission (the “CCPC”). These increased powers allow the CCPC to apply to the courts for declarations or injunctions against businesses who mislead their consumers, or fail to provide them with the adequate remedies or compensation they are entitled to.

2. Penalties

Enforcement is further strengthened through the penalties traders may be faced with. For certain breaches of consumer protection law, the Bill introduces the imposition of fines not exceeding 4 per cent of annual turnover in the Member State(s) concerned, or, where such turnover information is not available, a fine not exceeding €2 million.

What’s Next?

The Bill is currently in the Second Stage before Seanad Éireann, in which the general principles of the Bill are debated. The Bill has passed through five stages in the Dáil, and must pass a total of five stages in the Seanad, before being signed into law by the President.

As it stands, the provisions of the Bill are not yet legally binding on traders. However, in light of Ireland’s obligation under EU law to implement these directives, the enactment of this Bill is imminent.

It would therefore be commercially prudent for traders to be both aware of the impending legislation and to conduct themselves in a manner that is in-line with the Bill’s consumer protections.

For more information or advice, please contact a member of our Corporate and Commercial team, or our 
EU, Competition & Regulated Markets team in DAC Beachcroft Dublin.