Consumer Contracts Regulations 2013: Barristers' Obligations & Client Rights, Lecture notes of Acting

Download Consumer Contracts Regulations 2013: Barristers' Obligations & Client Rights and more Lecture notes Acting in PDF only on Docsity! 1 Consumer Contracts (Information etc.) Regulations 2013 Purpose: To draw barristers' attention to obligations that may arise from these Regulations Overview: The 2013 Regulations – when the Regulations apply – who is a ‘consumer’ – ‘off-premises’, ‘distance’ and ‘on- premises’ contracts – required pre-contract information – cancellation rights – duties on cancellation – no work during cancellation period without express consent – consequences of non-compliance – client care letters – further guidance Scope of Application: Barristers who accept instructions directly from lay clients who are consumers Issued by: Legal Services and Ethics Committees Issued: May 2016 Last reviewed: April 2020 Status and effect: Please see the notice at end of this document. This is not “guidance” for the purposes of the BSB Handbook I6.4. Introduction 1. The Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013 came into force on 13 June 20141. The main effect of the Regulations is to give consumers rights to cancel contracts for good or services that are made remotely (for example by telephone, email or over the internet). 1 SI 2013/3134. The original version of the Regulations can be found here but they have subsequently been amended, e.g. by reg. 9 of the Consumer Protection (Amendment) Regulations 2014. Up to date versions are available on the legislation databases of commercial legal research websites. 2 2. The Regulations are complex and this paper is intended as general guidance; it is not a substitute for reading them. The main issues of relevance to barristers are these: 2.1. The Regulations apply where services are provided to a consumer. Thus they are likely to be particularly relevant to barristers doing public access work (see paragraphs 3 to 9 below). 2.2. If they apply, the Regulations require you to notify your client of certain things; most particularly (where it exists) your client’s right to cancel (see paragraphs 10 to 13 below). 2.3. The cancellation period is 14 days. You should not do any work during this period unless your client has expressly authorised you to do so (see paragraphs 14 to 17 below). Application: who is a ‘consumer’? 3. The Regulations apply to contracts between a “trader” and a “consumer” (reg. 4). Barristers acting in the course of their practice will qualify as traders under the Regulations. ‘Consumers’ are individuals acting for purposes which are wholly or mainly outside their trade, business, craft or profession. 4. It follows the Regulations will apply to public access work where you enter into a contract directly with a client who is a consumer. Examples of public access clients who will qualify as consumers include a husband or wife in a family case; immigration cases in which your client is an individual; employees in employment disputes; and housing cases in which your client is a tenant. 5. In the view of the Bar Council, the Regulations do not apply to contracts between barristers and the following types of client: 5.1. Solicitors who are acting for professional or business purposes (e.g. where instructions are received from an instructing solicitor on behalf of a lay client, even if the lay client would be a ‘consumer’). 5.2. Public access clients who (a) are acting for the purposes of their trade, business, craft or profession, or (b) are not individuals (such as clients who are corporate bodies). 5.3. Licensed access clients who (a) are not individuals, or (b) are acting for the purposes of their trade, business, craft or profession. In the latter category, the licensed access clients could be acting as intermediaries, or could be instructing you on their own behalf. 5 is not the case, the client care letter should be amended accordingly. This subject is dealt with further in paragraph 20 below. 13. In the case of off-premises and distance contracts, written confirmation6 of the contract must also be given to the consumer within a reasonable time of the contract being entered into and before any service is provided under it (regs. 12 and 16).7 Again, this requirement can be met by an appropriate client care letter (though note that for off premises contracts this must be provided on paper unless the client agrees to it being provided on another form of ‘durable medium’, such as email). Cancellation rights 14. The Regulations provide a 14-day cancellation right for distance and off-premises contracts (regs.29 and 30). In effect, the consumer client has a 14-day cooling off period in which to change his mind. The Regulations do not confer a cancellation right in relation to on-premises contracts. 15. You must not begin to supply any service before any cancellation period under the Regulations has expired unless your consumer client has made an express request for you to do so. In the case of an off-premises contract, that request must be in writing8 (reg.36(1)). If you supply a service during the cancellation period at the express request of your consumer client, then: 15.1. If you provide all of the services covered by the contract (so that your contract is fully performed) before cancellation and your client acknowledged when making their express request that they would lose the right to cancel once the contract had been fully performed, then the right to cancel will be lost, and your client will be liable for the full contract price (reg. 36(2)); and 15.2. If you provide part of those services (so that your contract is partially performed) before cancellation, then your client will be liable to pay for the part 6 For off-premises contracts, a copy of the signed contract may be given instead. 7 Note: in disputes regarding compliance with the information requirements regarding off-premises and distance contracts, the burden is on the barrister to prove he or she complied (reg.17). This does not apply in relation to proceedings for an offence under reg.19 or relating to compliance with an injunction under reg.45. 8 The Regulations state that the request must be made on ‘durable medium.’ This precludes, for example, filling in a form on a website; the reason being that this could not be stored by the client for future reference. However, an email, fax or letter would all comply with this requirement. One potential method of compliance would be for the client to make an election on the client care letter which he returns to you. 6 of the service which you provided before you were informed of the cancellation (reg. 36(4)).9 16. Subject to paragraph 17 below, if your client has paid you any sums before cancellation, then you must reimburse the client without undue delay and in any event within 14 days of you being informed of your client’s decision to cancel (reg.34). 17. The Bar Council takes the view that your contract can make it clear that any reimbursement that you may be obliged to make will be subject to your right to set off any sums lawfully due to you under the contract (i.e. those sums referred to in sub- paragraph (a) or (b) in paragraph 15 above). If your client agrees to this, then you would be obliged only to reimburse the balance to your client. As yet, however, there is no case law which confirms that this view is correct. Non-compliance 18. Failure to comply with the Regulations can: 18.1. in the case of a failure to give notice of cancellation rights in respect of an off-premises contract, involve a criminal offence (reg. 19)10; 18.2. in the case of a failure to give notice of cancellation rights in respect of an off-premises contract or a distance contract, extend the cancellation period by up to 12 months (reg. 31) and result in your client not being liable to pay for services provided prior to cancellation (reg. 36(6)); 18.3. in the case of a failure to provide the required information, place you in breach of contract (reg. 18); and 18.4. expose you to enforcement action for breach of the Regulations (regs. 44 and 45). 19. The BSB might also look carefully at whether a serious or persistent breach of consumer protection legislation may have involved or given rise to professional misconduct, even if it does not involve a criminal offence. Client care letter 20. The BSB publishes on its website model client care letters for barristers instructed on a public access basis either directly by a lay client (“no intermediary 9 The amount the consumer is liable for is to be calculated in proportion to what has been supplied on the basis of the total contract price or, if the total contract price is excessive, then the market value of the service supplied (reg.36(4) and (5)). 10 The offence is subject to a due diligence defence in the cases where the offence was due to the act or default, or information supplied by, another (reg.20). 7 cases”) or on behalf of a lay client (“intermediary cases”). The following points should be noted about these model letters: 20.1. They have all been drafted on the assumption that the client (and, where relevant, intermediary) have cancellation rights under the Regulations. This means that they assume that every client or intermediary is a consumer, and that all contracts are distance or off-premises. 20.2. If that is not the case (for example if you are instructed by a business or professional client), then you would be wise to amend the client care letter to exclude references to rights of cancellation. 20.3. Under the heading “Effects of cancellation”, the model letters state that if the client cancels the contract in accordance with the right to do so under the Regulations, you will reimburse all payments received from the client. However, this takes no account of the possibility that your client has asked you to start work during the cancellation period, giving you the right to be paid such proportion of your fee as reflects any work done before cancellation. If you wish to have a right to set off any sums lawfully due to you under the contract (see paragraph 17 above), then you would be wise to make appropriate revisions to the client care letter to provide for this expressly. Further guidance 21. The Regulations implement Directive 2011/83/EU on consumer rights. European Commission Guidance on the Directive can be viewed here (cached). For the relevance of the Directive to interpretation of the Regulations, see Robertson v Swift [2014] UKSC 50. 22. The Department for Business Innovation and Skills has issued general guidance on the Regulations, which can be viewed here. 23. The Law Society has issued guidance to solicitors which can be found here. 24. A detailed legal consideration of the Regulations is to be found in Chapter 38 of Chitty on Contracts (33rd Edition). Important Notice This document has been prepared by the Bar Council to assist barristers. It is not “guidance” for the purposes of the BSB Handbook I6.4, and neither the BSB nor a disciplinary tribunal nor the Legal Ombudsman is bound by any views or advice expressed in it. It does not comprise – and cannot be relied on as giving – legal advice.