My Lords, this Bill sets out for the first time in statute what remedies consumers are entitled to request and traders must offer if traders provide a substandard service. That is a real increase in consumer protection. Consumers of services, from hairdressing to plastering, will have access to statutory remedies if those services do not meet the consumers’
statutory rights. I am very proud of this part of the Bill and believe it will lead to real improvements for consumers on the ground.
To help consumers use these new remedies, we have set out clearly in the Bill how they will work in practice. This will also be set out in guidance, which will be available for traders and consumers well in advance of the Bill coming into force. To give an example, if a service is not provided with “reasonable care and skill”, the consumer can ask the trader to re-perform the service so that it does meet that standard. In practice, it may not be possible to re-perform a service, or the trader may cause significant inconvenience for the consumer in doing so. In those cases, the consumer can ask for a price reduction. If the consumer has already paid more than the reduced price, the difference must then be given to the consumer within 14 days. That is a practical process designed to work for both consumers and traders. We have discussed this extensively with stakeholders and businesses overwhelmingly support this way forward.
Importantly, these new statutory provisions are in addition to, not a replacement for, common-law remedies that consumers can currently pursue. We are not taking away a consumer’s current access to redress through the court system. Quite the opposite: we make clear in Clause 54 that these remedies are still available. Clause 54(7) is a non-exhaustive list of those remedies. Guidance on the Bill will also explain that these remedies are still available. Moreover, we are not restricting consumers and traders to the remedies in this Bill. The consumer has a right to ask for what is in these provisions. However, if the consumer so chooses, they can negotiate a different remedy with the trader. For example, they could negotiate to reduce the price of a service without exercising their right to a re-performance. There is support available to enable consumers to do this, notably through the Citizens Advice service. The service provides advice over the telephone, face to face and online, including practical tools such as template letters.
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We understand the issue that noble Lords have raised. We understand there can be rare and unfortunate circumstances where a service leaves a consumer in a dangerous situation. We sympathise with the concern raised that consumers should be able to get money back from the trader rather than having to have them back to redo any work. The new statutory remedies, in combination with retaining access to common-law remedies, protect consumers from services that are performed so badly they put personal safety at risk. Where a trader has performed a service in this way, the consumer does not have to have the trader back. The consumer can ask the trader to come back and remove the risk, but if they do not want to have the trader back they have access to redress through the courts. We recognise that consumers do not want the hassle and expense of going to court, but neither do traders. As I said a moment ago, these provisions allow the trader and the consumer to negotiate a different remedy if the consumer so chooses. Traders will not want to go to court any more than consumers, so they will have a strong commercial incentive to negotiate. The noble Baroness, Lady Hayter, was concerned that this was not a statutory remedy,
but the Bill’s inclusion in Clause 54 of an express reminder of the possibility of claiming damages gives consumers a good basis for negotiation.
For example, let us imagine that a trader renovating a room damages some wiring. The consumer is worried about their safety in that room. They have a right to ask the trader back to fix the electrics but they do not want the trader back. They can instead ask the trader for their money back. The trader does not have to give the money back, but they would know that the alternative is court. It would make no commercial sense for them not to give the consumer their money back. It may reassure noble Lords to hear that this is backed up by current practice. Consumers do not currently have statutory remedies for substandard services; however, we know from independent research that we commissioned in 2013 that more than 50% of service providers still offer a remedy similar to that in the Bill, such as money back. This shows that traders will offer remedies in addition to those set out in legislation in order to avoid having to go to court. Through this system, consumers are protected from service providers who risk their personal safety.
Noble Lords may ask, “Why not write into legislation that a consumer can always ask for a price reduction?”. We think the protections for consumers which noble Lords are seeking are already appropriately addressed. We seek to balance the interests of consumers and traders, and not all traders are rogues. Most traders want to do a good job, even on the most difficult jobs. These traders rely on their good name and good reputation to get business; they include small traders without marketing budgets who rely on word of mouth. The huge growth of review websites in the last few years is evidence of this. If we were to force traders to offer money back without the chance to re-perform a service then we would deny them the opportunity to correct honest mistakes and safeguard their reputation, which is so important to them. For example, a builder could make an honest mistake during a project; they could offer to return to fix the problem for free and to the consumer’s satisfaction. In many cases, it may be in both parties’ interests for the trader to fix the issue.
Consumers are protected from receiving unsafe services as they retain access to the common-law remedies. My noble friend Lady Oppenheim-Barnes made a point about traders who charge for a repair visit and then do not carry it out. If the trader agrees to do a repair and takes money but then does not carry out the work, that is a breach of their contract. Consumers should complain to trading standards about sharp practices such as that.