This blog post has been contributed by Rick Canavan, Module Convenor for Commercial law.
One of the most striking things about the Consumer Rights Act 2015 (CRA) is that is manages to bring revolutionary changes in some areas while providing no rules at all in others. On the one hand, it creates something akin to a consumer code, it provides novel and discrete remedies for business to consumer (B2C) contracts and it legislates for digital products for the first time. Yet, it contains no references at all to passing of property or passing of title. Here, the parties to a B2C sale simply fall back on the provisions of the Sale of Goods Act 1979.
The SGA rules cause 2 problems for consumers. First of all, they are complex, difficult to understand without legal training and use somewhat old-fashioned language, damaging consumer understanding and ultimately, confidence. Second, because consumers usually have to prepay for goods, they are disproportionately exposed to the risk of a seller’s insolvency. Government was aware of these problems and tasked the Law Commission of England & Wales to examine them in greater depth and make proposals for reform . Evidence from Citizens Advice suggested this was a “real concern” to consumers and the Law Commission felt that the law was particularly poorly equipped to deal with the huge growth in online sales of goods.
The Law Commission proposed that for sales of specific goods, the ‘deliverable state’ distinction should be removed so that goods simply pass when a contract is made and this way, if the buyer left goods with a seller (for example a ring that was to be engraved) who became insolvent, property would have passed to the buyer and they would be protected.
For sales of unascertained goods, the Law Commission proposed that B2C contracts should move away from the concept of ‘unconditional appropriation’. Currently, this requirement prevents property passing, for example, where goods are packed, labelled with the buyer’s details and ready for dispatch. The Law Commission proposals move the point in time at which property passes closer to the point in time when the contract is formed, protecting the consumer and better aligning the law with their likely expectations.
These measures along with others, such as a general ‘tidy up’ of the language used for passing of property provisions seem like sensible solutions to pressing problems in this area. But Law Commission reports often propose what seem extremely sensible solutions to pressing problems only to see them disregarded by successive governments. The Law Commission believes the boom in online sales driven by COVID makes implementing these changes vital. Consultation on their proposals closed on 31st October, now we must wait and hope that government takes note.