Chapter 14Consumer protection10 Liability for proper performance of the contract.
Under reg 15 the organiser and retailer are liable to the
consumer for the proper performance of the contract,
irrespective of whether the obligations are to be per-
formed by the organiser or retailer or by other suppliers.
Liability will not arise where the failures in performance
are attributable:
■to the consumer himself; or
■to a third party unconnected with the services con-
tracted for; or
■to unusual or unforeseeable circumstances beyond
the control of the organiser or retailer (known as force
majeure).
Where the second and third points occur, the
organiser and retailer must give prompt assistance to
any consumer in difficulty. The contract can include a
reasonable term, which limits the amount of compensa-
tion payable for non-performance or improper perform-
ance of the contract. However, liability for death or
personal injury cannot be excluded. If the consumer
complains, the organiser or retailer or his local repres-
entative must take prompt action to find a solution. For
their part, consumers are under an obligation to make
their complaints known to the supplier of the service at
the place where the service is supplied. If, for example,
the consumer is unhappy with the standard of his hotel
room, he must make his complaint known to the hotel
management.
11 Protection against insolvency.The regulations
provide that the organiser and retailer must provide
evidence of security for the refund of money paid over
and for the repatriation of a consumer in the event of
insolvency. The protection against insolvency is further
strengthened by compulsory bonding arrangements.
12 Offences and enforcement.As we have seen already,
the regulations create a number of offences. It is a defence
for a defendant to show that he took all reasonable steps
and exercised due diligence to avoid committing a crime
(reg 24). The regulations are enforced by local trading
standards departments.
Enforcing consumer rights
There has been a considerable improvement in con-
sumers’ rights over the past 30 years, which is set to
continue as the EU pursues its aim of a high level of pro-
tection for consumers. However, creating more and bet-
ter rights will count for little if consumers do not have
a cheap and simple way of enforcing those rights. There
are currently three main ways in which a consumer may
obtain redress: compensation orders, conciliation or
arbitration under a code of practice, and arbitration
under the county court small claims procedure.Compensation ordersIf a trader is convicted of a criminal offence, e.g. under
the Consumer Protection from Unfair Trading Regula-
tions 2008, the court may make a compensation order
requiring the trader to pay compensation for ‘any per-
sonal injury, loss or damage’ resulting from the offence
under the Powers of Criminal Courts (Sentencing) Act- Magistrates’ courts are limited to £5,000 in respect
of each offence for which the trader is convicted. There
is no limit to the amount of compensation which can be
awarded by the Crown Court. Compensation orders are
beneficial to the consumer in the following situations:
■where the amount of loss suffered by the consumer is
so small that it is not worth bringing a civil action to
try to recover it;
■where the consumer has no remedy in civil law, e.g.
there is no civil remedy for misleading advertising
but an offence under the Consumer Protection from
Unfair Trading Regulations 2008 may have been
committed.Conciliation or arbitration under a
code of practiceThe trader may be a member of a trade association which
operates a conciliation or arbitration scheme to deal with
complaints against members. The aim of conciliation
is to get the parties to resolve their differences in an
informal way. If conciliation does not result in agree-
ment, the consumer is still free to take the matter to
arbitration or to the courts. Arbitration consists of an
independent person hearing both sides of the dispute
and then making a decision which is binding on the
parties. Arbitration is usually very informal and is often
done in writing. It is usually inexpensive but in some
cases can be more expensive than going to court. One of
the problems with some arbitration schemes was that an
agreement to refer the dispute to arbitration precluded415