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Consumer Contracts Regulations 2013 Summary

11-July-2016
11-July-2016 10:25
in General
by Admin

The Bar Council issued information (not guidance for the purposes of the BSB Handbook) relating to the Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013 (“the Regulation”) in May 2016. The document is relevant to those barristers who accept instructions directly from lay clients who deal as consumers. The document provides advice to ensure barristers comply with the rules in relation to whether the contract with the consumer is considered to be ‘off-premises’, ‘distance’ or ‘on-premises’. Different information must be provided to the consumer and different consequences (particularly in relation to cancellation periods) follow if they are breached depending on the above categories.

Consumer

The regulations cover contracts entered into between a ‘trader’ and a ‘consumer’. A barrister acting in the course of his/her practice will qualify as a trader. A ‘consumer’ is defined as an individual acting for purposes which are wholly or mainly outside their trade, business, craft or profession. Therefore, contracts with solicitors representing a client, or public (or licensed) access clients who are individuals acting in the course of their business, trade or profession, or who are not individuals (such as a corporate body) will not be governed by the Regulations. Public access clients who are individuals acting outside their trade etc. will be protected by the Regulations.

Contract Categories

Those contracts to which the Regulations do apply are divided into 3 categories based on the location in which the contract is agreed. The Bar Council provides a rough guide as to these categories but for less straightforward matters, regulation 5 of the Regulations should be consulted for a more precise answer.

A contract concluded, or which follows discussions, in the presence of both the consumer and the barrister (or the clerk) in a place other than chambers is an off-premises contract. These are considered to present the greatest risk to consumers and so obtain the maximum protection.

A contract with a consumer concluded through the use of an organised distance sales or service-provisions scheme without any physical contact is a distance contract. This will likely include contracts concluded via telephone, fax, letter or e-mail.

All other contracts with consumers will qualify as on-premises contracts, such as those concluded in chambers, and, as such, the consumer’s right to cancel does not apply.

If a contract is concluded with a consumer and it is either a distance or an off-premises contract, the client has a 14-day right to cancel the contract.

Information

The Regulations also require information to be provided to the consumer. Provided the contract is either off-premises or distance, the BSB model letters contain all the relevant information. These letters are all drafted on the presumption that cancellation rights apply and that the client is a consumer; if that is not the case the letter should be amended accordingly. The information required to be sent to consumers can be found in Schedules 1-3 of the Regulations.

Cancellation

The Regulations grant to consumers who conclude off-premises or distance contracts a 14-day period in which they can cancel the contract. Unless the consumer expressly requests it, the barrister must not supply any service within this period. For an off-premises contract, that permission must be in writing. The amount of work completed during the period will affect how much the barrister can be paid in the event of cancellation, following a prior written request to provide services during the 14-day period. If all of the work is completed and the consumer acknowledges that they would lose the right to cancel upon full performance of the contract, the right to cancel will be lost and the consumer is liable for the full contract price. If some of the services contracted for are provided, the client is liable to pay for such partial performance completed before cancellation takes place.

If any sums are paid to the barrister prior to cancellation, then upon cancellation those sums must be reimbursed without undue delay and within 14 days of notice of the cancellation. The Bar Council is of the opinion, but there is no case law on the point, that the contract can make clear that any such reimbursement is subject to a right to set-off any sums due to be paid to you as set out above (for fully completed or partially performed contracts). This would need to be agreed specifically in the contract between the barrister and consumer.

Non-Compliance

The failure to provide notice of cancellation rights in respect of an off-premises contract can involve a criminal offence, subject to a due diligence defence where the offence was due to the act or default or information supplied by another. The failure to give notice of cancellation rights in either an off-premises or distance contractcan extend the notice period by up to 12 months, which could have the effect of meaning the consumer is not liable to pay for your services for such time. The barrister could also be in breach of contract or breach of the regulations and thus expose you to respective remedies. The BSB might also consider a serious and persistent breach amount to professional misconduct.

Client Care Letters – In Conclusion

The BSB has published model client care letters on its website. They are all drafted on the basis that cancellation rights apply under the Regulations; every client is assumed to be a consumer and every contract either an off-premises or distance contract. Should that not be the case then the template should be amended so as not to include references to rights to cancellation. Equally, under the heading “Effects of cancellation”, the model letters state that if the cancellation right is exercised in accordance with the regulations, you will reimburse all payments received from the client. Should the barrister wish to start working during that period following the client’s request and be paid for such work, specific mention must be made to this in the contract and the letter amended accordingly.

Chambers’ Position

Chambers’ position, from before this publication was issued, has been to include clear payment terms in letters to be sent to the client upon the commencement of public access work. The BSB’s model letters can be found here: https://www.barstandardsboard.org.uk/regulatory-requirements/bsb-handbook/code-guidance/ These make it clear, under the heading of ‘Effect of cancellation’, that should work be requested in the 14-day cancellation period, then the client will be liable to pay for it, notwithstanding any cancellation of the contract.

 

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