Commercial & Consumer Law Assignment Sample

• Subject Name : Commercial Law

Table of Contents

Introduction

Question 1

Question 2

Question 3

Conclusion

Bibliography

Introduction

Organisations are responsible for taking protective measures for reducing the safety related issues with the manufactured product so that it cannot harm the customers or any other persons. This safety policy is to be taken under consideration at the time of designing, developing, manufacturing, delivering a product to the customers. The current study will discuss about the different aspects about the UK consumer law that are related to the current case. It has been identified that Ismail have purchased a fridge-freezer that violated the safety of Ismail by catching fire. These issues have been identified to be taking place in others locations also with the same model. In this context, the legal prohibition for the incident related to the consumer laws UK will be analysed.

Question 1

Under Consumer Law UK, companies that are unable to conform to the contract of sale which ensures the safety of the customers, they will be liable to pay free repair or placement services or discount or refund. The primary governing statute of Consumer law is the Consumer Protection Act 1987. This act gives rights to the consumers for claiming compensation against the product producer or the seller for providing defective product that caused any damage, injury or death. Under this act, companies are also bound to pass a strict liability test through which the sellers are already liable for any damage caused by the product sold. As per the section 2(1) of this Act, the damage could be established by the presence of “any damage”. In simpler term, a person that has actually suffered the damage can claim compensation against the same. Another governing statute of the Consumer Law is the Consumer Rights Act 2015 under which consumers are provided with simplified, strong and modernise law, providing clearer shopping rights to the customers1. The producers are responsible for provides products of satisfactory quality, is fit for the purpose and as described. These are the regulations that might be discussed in the light of the current case study.

Issues of The Case Study

Ismail the resident of council building in Pontyberry, South Wales has purchased a fridge freezer manufactured by COOLPOINT via XO.com an online shopping platform. After five days of using the freezer it started making funny noise and produce smells. While Ismail contacted the customer service station of XO.com, he was informed as the freezer is new, smell and the noise is normal. Along with this, Ismail was instructed to keep the freezer 1 meter away from the wall which could not be possible as there was lack of space in the room. However, the fridge freezer caught fire which caused the whole building burning down. The inability of Ismail to keep the fridge freezer away from the wall was not the sole reason behind this accident, as there is evidence of 250 other cases where same issue has been raised with the same model. Therefore, it can be stated that both the manufacturer COOLPOINT and the shopping platform XO.com are responsible for the harm. Both the company could not comply with the provisions under the consumer law which leads them to be liable for the damage.

Actions as a Trading Standard Officer

As a Trading Standard Officer (TSO) it can be suggested to Ismail to claim a refund, compensation for the damage caused and can accuse for the mental agony he may have gone through during the incident. The role of a TSO is to work collaboratively with the local authority to enforce the trading standard laws through different actions. As a TSO different actions can be taken under consideration. Businesses generally need to comply with the consumer laws in order to avoid risks and expenses due to formal action of enforcement2. Breaches of trading laws can be resolved through different remedial actions such as changing the products or the systems, or advertising. However, in this context, the beach of trading law combines with serious damage to the consumer. Therefore, it is required for the TSO to raise the case to the local authority so that refund and compensation can be claimed against damage of the building and mental harassment and trauma3.

It can be stated that compensation can be claimed against the damage caused to the building under Consumer Protection Act 1987. Under the section 2(1) of the Act, if an individual has purchased a product and damage has occurred wholly or partly by the defect of the product, the producer will be liable for the damage. Under section 5(1) if the product defect leads to death or damage or any kind of injury or damage of a property will be liable for paying compensation4. Under section 7 of the Act any mentioned term or contract written will not be sufficient to defend against the loss or damage faced by the consumer. Under regulation 20 of General Product Safety Regulations 2005 ("GPSR") compensation can be claimed due to the breach of consumer contract by the manufacturer. In this case, punishment of imprisonment can also be imposed against the manufacturer due to the damage caused.

The aspect of psychological injury will also be relevant based on the specifications provided in the above case study5. Predominantly covered by the common law, psychological injury disputes and claims for compensatory damage are widely prevalent within the English legal system. Based on precedents, victims that suffer from psychological injury are typically classified into primary and secondary victims. The judgement passed in the matter of “McLoughlin v O’Brian [1983] 1 AC 410” as it upheld the awarding of compensatory damages for emotional trauma suffered due to the performance of a consumer contract6. Under consumer rights, Ismail as the victim, would be liable to receive compensatory damage for the harm caused to his property along with a full refund of the amount spent for acquiring the fridge. This is covered under Section 45 of the Consumer Rights Act 20157.

Question 2

Ismail can be advised to file complaint against the manufacturer COOLPOINT to the Office of Fair Trading as per the provisions of the General Product Safety Regulations 2005 (GPSR)8. Otherwise it would also be advisable to Ismail to file a formal complaint with the Citizen Advice bureau so that they may take up the matter and initiate a proceeding on his behalf. Under the UK Consumer Law it is illegal to put unsafe products in the market, this is applicable under the General Product Safety Regulations 2005 (GPSR) that has implemented the directives for EU General Safety. It is fundamental platform through which the consumer product safety is ensured including the precautionary principle. It is clearly stated in the specifications of general safety requirement that no producer has the right to place a product in the market unless it is safe. The safety maintenance of the product actually is controlled by the legal provisions. In this context, the producers are needed to perform safety test of the product to ensure that it is safe for using.

The diligence of the product is to be proved by the manufacture. The criteria through which the product safety can be demonstrated by the manufacturer include the following:

It needs to refer the voluntary national standards and need to follow the product safety codes regarding good practice in the relevant industry. Consumer expectations are also needed to be expected as the main concern is safety9. Safety is also required to be ensured in other supply chains of the producer. Therefore, it can be stated that complaints may be lodged to the consumer direct for further legal advices to be put to the complaints. The consumer can also be redirected to the Trading Standards for further investigation.

The OFT is required to be engaged with consumer groups or the statutory protection body for the consumers in order to file a super complaint. This is based on the damage faced by the other consumers. It is applicable here, as there are other 250 cases where the same incident has happened with the same product model. These consumers can develop a protesting body to claim for refund or compensation against the damage. On the other hand, relatives of the individuals lost lives in the case of burning of the building can also be approached to file complaint collectively. On the other hand, complaints can also be lodged under Section (1) of Fatal Accidents Act 1976 will also be applicable to this case. There is a possibility for the dependants of the deceased people due to the burning caused by the product defect to claim recovery of the damages caused10. Therefore, Ismail can get the collective claim to the OFT for conducting an investigation over the case. This can also be considered as a criminal liability of the manufacturer and partially the retailer to release disputed products in market.

Question 3

The Consumer Rights in UK, protects the interest of an individual when he or she buys a product or obtains any service11. The UK Consumer law states that consumers are allowed to claim free charge of repairmen, discount or refund for the defective goods as they don’t fill the contract for sale. These rights duration exists till 6 month of purchase made of the product, in both England and Wales. The consumer Rights Act 2015 was enacted on October 1th, as it replaced three section of legislation for consumers. Those were, the safe of Goods Act12, Unfair Terms in Consumer Contracts Regulations, and the Supply of Goods and Services Act. Under the Safe of Goods act there are three elements that needs to be satisfied which are as follows.

Satisfactory Quality - The goods delivered to a consumer should not be faulty or damaged in nature13.

Fit the purpose - Delivered goods shall fit the purpose it was advertised by the retailer to the consumer.

As described - Supplied products shall match the description that was provided to the consumer at the time of purchase.

Any consumer can file a claim if any one of the above mentioned factors is not satisfied. In UK, the framework of Class Suit action has been due for a prolonged time. However, a new wave of reforms was introduced in 2015. Earlier the claimants for damages by consumer could be based on three collective Redress mechanisms.

Group litigation orders - Under Civil procedure rules (CPR) 19.11, these orders are carried out. It is enabled when number of claims highlight a common issue14.

Representative Actions - A representative claim is enacted on behalf of collective others bought upon by one or two persons under the section of 19.1615 of CPR.

Test Cases - It is a mechanism where CPR uses test cases for enacting GLO16 or Group litigation orders. For example, if there is more similar claims against the defendant then consumer rights can be protected.

In UK Class suit action has the availability of Opt in17 only, with improvements the facility of opting out has developed as well. This reform has softened the blow from the abuses of Competition law. In the economy various claims have been enacted with the help of collective actions. The claims include, competition law, personal injury and pension disputes. The ‘opt in’ programme requires the collective claim to be authorised by the claimants and identified in the proceedings. The ‘opt out’18 programme is opposite of this in a certain way, it does require the claimants to be identified or authorise the claim on their behalf.

Therefore, a class action is a lawsuit where a group of people with similar losses or injuries can sue the company or defendant caused by the same product as group. It helps in disposing numerous claims that did not have any strong individuality but when bound together, the strength of claimants adds up. The justice that is bestowed helps the injured group to actually receive something as compensation. Therefore, according to the case scenario all XO.com, COOLPOINT and WHITEHOUSE can be sued for product liability19 under Consumer Protection Act. The injured party can particularly sue XO.com under the Sale of Goods Act.

Issues of The Case Study

In the given scenario, Ismail moved into a High-rise Council Building Pontyberry, South Wales. He purchased a Fridge freezer from XO.com Retail Company who manufactures from COOLPOINT. It is a British subsidiary of WHITEHOUSE brand, a US multinational company having international presence. After Five days of usage, Ismail noticed that the fridge freezer made abnormal noises, he reported it to the retail company of XO.com. The company then assured that it made those noises because it was a new product. Following a week the COOLPOINT fridge freezer created a fire, and the entire high-rise building burnt down with 100 people dying. In the investigation report it was found that similar cases were reported against this same product with similar cause reasons. Those cases were 250 in numbers, which shows that the retailer company XO.com has been negligent about the feedbacks of customer and violated the statutory compliance of product safety. Ismail as the citizen of that building, and after informing the retail company of the products abnormal behaviour, the diligence from XO.com was ignored. Therefore, Ismail is eligible to sue the company on the basis of Class suit action and product safety standards. The fire accident caused loss of 100 lives, which is not a small matter. This situation would not have taken place if XO.com paid attention towards previous claimants and reports of similar accidents.

Representations as a Lawyer

As a lawyer, it can be suggested to Ismail to file lawsuit against XO.com under the sale of goods act and apply for class action suit against the retailer, manufacturer and producer of the product. The major legal and regulatory sources to enable collective actions are stated in the Civil Procedure Rules and Practice Directions under supplementary of statute. The Competition Act 1998 along with the Consumer Rights Act 201520 gives grounds for claiming remedies to the claims caused by competition law itself. These claims are appealed in front of Competition Appeal Tribunal Rules 2015 known as CAT rules.

In the given case study, Ismail is eligible to file class suit action against XO.com because it neglected the fact that product of COOLPOINT fridge freezer was the reason behind similar 250 fire accidents all across UK. It continued to sell the product to the consumers which violated the laws of Consumer Law, Product Safety and Sale of Goods altogether, it was reported that due to the fire created in the building where Ismail lived took 100 of lives. Therefore, this particular fact strengthens the case of Ismail as it is highlighting the evidence that unrelated people were injured due to the fire event through the fridge-freezer model sold by XO.com. Therefore, Ismail would be representative plaintiff as he would be claiming on the behalf of other injured people. Another relevant factor is that, this incident took place after 2 weeks of delivery making the affected people eligible to receive some sort of compensation.

Therefore, will use a matrix to conclude a settlement in between XO.com and the injured people with the help of a lawyer or attorney. In order to strengthen the case more, the lawyer hired by Ismail can put up an advertisement inviting other injured people so that opt out programme can be utilised as well. The case law of Gibson v Pride Mobility Products Ltd provides a solid example on carrying out the collective action procedures in front of CAT. Under consumer rights, Ismail as the victim, along with 100 others of his building will be able to collectively file claims against the retail company of XO.com

Conclusion

It can be concluded that, organisations should take more refined search while conducting the product safety before proceedings with the sales process. In the given case scenario, Ismail and the other injured people are the victim, because of the due diligence showed by the retail company XO.com and its manufacturer COOLPOINT. Ismail, is a subject to receive compensation and refund amount from the company. It is also eligible to file lawsuit against the seller under product safety law and on the basis of class action suit. The later law has noticed a revolution in its legislation. In UK, the ‘opt out’ facility allows the claimants to not identify themselves in the proceedings.

Bibliography

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