Businesses urged to read up on new consumer law

New rules that are designed to make it easier for victims of anti-competitive behaviour to claim redress and recover lost profits come into force today.

Lawyers are advising firms to make sure relevant staff were aware of the law on collusion. Picture: Phil Wilkinson

The Consumer Rights Act 2015 gives extensive new powers to the UK’s specialist competition court, the Competition Appeal Tribunal, and a fast-track procedure is intended to encourage smaller businesses to bring cases against large companies or groups abusing their market power.

Commercial law firm Maclay Murray & Spens (MMS) said it was advising firms to make sure relevant staff were aware of the law on collusion and the dangers of inadvertently entering into anti-competitive arrangements through casual contacts with rivals.

Catriona Munro, a partner in the EU competition and regulatory team at MMS, said: “Most companies know that anti-competitive agreements and abuse of dominant market positions are illegal, but it is possible to fall foul of the law through seemingly innocuous agreements made casually with competitors.

“It is, therefore, essential that managers also take a thorough overview of the situation and that suitable due-diligence is carried out across commercial operations.”

The new act also introduces a mechanism for infringing companies to propose voluntary redress schemes to provide compensation to victims, which may be approved by the Competition & Markets Authority.

Alan Matthew, consumer legal expert and partner at Tayside solicitor Miller Hendry, said the new rules also set out guidelines for repair or replacement of faulty digital content such as online films, games, music downloads and e-books, while any unfair or hidden terms can be challenged by consumers.

He added: “There are a number of changes and any business selling to consumers will need to be prepared. It is important that terms and conditions are reviewed and updated.

“In future, these must be prominent and transparent, if traders want to avoid finding themselves being assessed for fairness.

“So, if you have hugely detailed small print that no one could possibly read, it’s worth seeing whether you can reduce this, or at the very least making sure that there’s nothing hidden in there that the consumer should know about up-front.”

UK consumers spend some £90 billion a month but figures from the Department for Business, Innovation and Skills (BIS) show shoppers encountered more than 18 million problems with consumer goods and services in the 12 months to the middle of last year, leaving them £4.15bn out of pocket.