Consumer Law Updates in Ireland: Part 1

• Ireland

• Consumer

16-01-2023

A growing emphasis has been placed on enhancing consumer rights in the digital economy in Ireland and throughout the EU. This has paved the way for increased legislation and compliance risks for businesses. In order to assist businesses navigate their way through upcoming legislative changes, we have compiled a two-part guide to give an overview of the key compliance risks which traders face now and in the future. The first part of this guide focuses on general consumer law updates which affect all traders in Ireland who sell goods and services (including digital content and digital services) to consumers. The second part of the guide focuses more particularly on digital businesses and legislative updates which will impact their users.

The Consumer Rights Act 2022 (the “Act”) applies to any new contracts entered into by traders with consumers from 29 November 2022. The Act modernises and consolidates previous Irish consumer legislation, as well as implementing EU Directives, such as the Sales of Goods Directive, the Digital Content and Digital Services Directive and the Omnibus Directive. Part of the Omnibus Directive has been implemented through the Requirements to Indicate Product Prices Amendment Regulations 2022 (the “2022 Amendment Regulations”).

The Act is split into different parts and covers:

• sales contracts (which are contracts for the sale of goods, including goods incorporating digital elements);

• contracts for digital content and digital services; and

• service contracts.

For any contracts entered into before 29 November 2022, traders should be aware that the old consumer protection legislation will still apply.

Key obligations

In general, the Consumer Rights Act 2022 provides for enhanced consumer protection by requiring the goods or services to be in conformity with the contract. Whether a good or service is in conformity will depend on the type of contract, however, the Act provides guidance on the subjective and objective conformity requirements for each type of contract. For example, an objective requirement for conformity in respect of the sale of goods requires the goods delivered to be of “the quantity and possess the qualities and other features (including in relation to durability, functionality, compatibility and security) normal for goods of the same type that the consumer may reasonably expect given the nature of the goods and taking into account any public statement in relation to the goods made… particularly in advertising or on labelling.”

In addition, the Act also prohibits traders from posting fake reviews or paying for reviews. Traders are also expected to take reasonable steps to verify that reviews have come from people who have actually purchased and used their products.

The 2022 Amendment Regulations impose a new obligation on traders in respect of any announcements they make in reductions of price. Where a trader makes any promotional statements which outline price reductions, they must also in that announcement indicate the prior price of that product. The ‘prior price’ is the lowest selling price or unit price of the product in the 30 days before the reduction in price (or if the price was previously reduced, any 30 day period before any initial price reductions). A trader must also ensure that any price reduction announcements are unambiguous and easily identifiable in relation to the product, as well as clearly visible and legible to prospective consumers.

Consumer redress

The Act introduces wider redress options for consumers, including the right to have a good or service be brought into conformity with the contract. In the case of sales contracts, where a good is not in conformity with the contract, consumers now have a short term right to cancel the contract and get a full refund. In certain circumstances, the Act also provides for certain remedies including a right to repair, replacement, a proportionate reduction in price or a right to terminate the contract.

Enforcement

There are various penalties under the Act, with breaches of many of the obligations amounting to a criminal offence. For example, a trader may be guilty of an offence where they make any statements restricting the rights which consumers are entitled to under the Act or where they exclude or limit their liability under specific sections of the Act. The CCPC has also been given new enforcement powers under the Act, including the ability to take enforcement action against traders on specific consumer complaints. This emphasises the need for traders to ensure they are aware of the full suite of consumer rights and trader obligations under the Act and to update their consumer facing documentation, processes and procedures accordingly.

Other upcoming legislative changes

Whilst looking to the future, traders in Ireland should be aware that in addition to modernising consumer obligations, the EU is also considering updating product liability rules. In September 2022, the EU Commission published a proposal for an updated Product Liability Directive (“Updated Directive”), which, if adopted, would see the scope and rules of the Defective Products Act 1991 modernised for the digital age. New digital products (such as AI systems and software), new producers (such as fulfilment service providers and online platforms) and new damage (such as loss or corruption of data) are all introduced in the Updated Directive. Additionally, the procedural rules for end-users to take claims against producers are significantly eased. Traders should be aware that these changes will not only widen the scope of who can be liable and what can be defective, but that end-users will also face less barriers proving their claims.

For further information, please contact:

Leona Chow, Solicitor - LeonaChow@eversheds-sutherland.ie