Hello and welcome to this Webinar entitled Distance Contracts. Avoiding the Pitfalls, Part two. My name is Keith Markham, and I am it coming commercial lawyer off a number of years of experience in this particular area here, the States devotes themselves to himself to consultancy and also to training. And therefore, I'm gonna be taking you through these materials so they know this is part two. So I hope you've already seen Part one. If no, I do strongly suggest you have a look at that as well the agenda with regard to this particular session you can see on the screen in front of you. Now let's look at the limits of application in terms of cancellation rights and the cancellations the main theme off this second session. So look at the limits and application on cancellation. Look at the right to cancel itself. We look at extended periods off cancellation, will look at the exercise and effective cancellation. And then we're gonna look at the fact that our to change is that the EU new deal for consumers potentially makes to these rules, albeit they're not actually finalized yet. Let's start by looking at our first slide which is the one that's entitled Limited Application Regulation 28. Now, unsurprisingly, the cancellation rights that were about to talk about do not apply to every possible conceivable scenario. As you see on the left hand side off the table, there are certain types of contract that are automatically excluded from these particular rules, so the cancellation right does not apply in any circumstance. On the right hand side, there are other scenarios where initially the cancellation right will apply. But ultimately, if you take certain actions or take certain steps, it won't supply about particular points. So the circumstances, what we're going to look at is a little bit more detail with regard to those two things on. Then hopefully, we'll find that useful. It's on the left hand side, made to order. Now let's give me all sorts of things, but let me give you an example. I say I order some clothing, and I have my initials placed here on the particular shirt that I order now. In this circumstance, if I received that shares normally, as I would expect, we'll see very shortly. I have a right to say within 14 days that I don't like it. I'm gonna send it back. However, if it's got my initials on has been personalized is being made to my order. In those circumstances, there is no right for me to send it back under these regulations, of course, that in no way prejudices my ability to do so if the ship is defective of the Consumer Rights Act rules that we're not talking about today. Essentially, remember, we're talking about right to change your mind. However it is made to order. I can't similar if it's perishable. In the first session, I gave the example off the scenario where practical to Domino's dot com and I order a pizza on. Then the personal rise with the pizza on my say So I'm sorry. I've got 14 days to decide whether I'm going to accept or reject pizza. Clear. That would be farcical, of course. No, there can be exceptions to that. Think about wine, for example. Is wine always bought with immediate consumption in minor? Don't know depends how bad your week has been. Perhaps, however, the reality is wine will keep the longer It was a celebrated case a few years ago involving version. Why not line when the rules were applied to them, and it was said that there was a right to cancel because the item they provided was not perishable. I think a combination and transport for specified duration that could be a mixture of those two things, or it could be separate. So let's say you book a Cornish holiday cottage for a week that would fall outside of the scope of cancellation rights under these regulations. Similarly, if you have a flight a flight to Rome, let's say for a long weekend again, Once you've booked that, you can't cancel into these particular regulations. So I was going to sleep for a moment, someone to get this out. Sorry. Next scenario, then, is when you have a scenario where the rights initially apply but subsequently ceased to be available in due course. So the three examples we've got here, I think, a fairly self explanatory. But I'm just going to go through them in slightly more detail for you. So we got seal goods not suitable for return for hygiene reasons. Now, this is certainly going to be jewelry that's been taken out the packet and has been inserted in an E. If it's an earring or nose ring or something like that, also, certainly underwear or swimwear, perhaps. I think we would agree. Anything that's going close to the skin, in that sense on intimate nature would certainly for within that. Now, of course, whether that extends to trying on a shirt or a T shirt or a pair of trousers, that's when it gets slightly more interesting and perhaps comebacks. Not a little bit more Later on. Then we have unsealed media or the video software. Now in the old days, used to get some former disk and had a seal on an anti tamper seal on the viewers that once that anti Tempus E was broken, you could not return the ice of under these regulations, of course. Remember the thing. Prejudices your right to return it if it's defective under the consumer rights, That's not what we're talking about in this particular session. Today is so unsealed media unsurprisingly, then finally, you've got inseparably mixed. If you receive an item and you mix it with something else that could be painter, it could be some form of similar type liquid, for example, that's combined with various other things once it has been mixed together and cannot be separated. And ultimately you lose your right to counsel under these regulations. Mehler Let's assume that we have a scenario where we can apply the cancellation rules, which is most of the time to be in the circumstances. Then how does the right to counsel work? Look on the screen for me and you see the description which I'm not gonna read out to you. The consumer May counselor distance or off premises. And we're not talking about off premises contracts today. So you can forget those attention the rules of the same. So the consume a castle and a distance or off premises contract at any time in the cancellation period without giving any reason and without incurring any costs other than under any of these provisions. Now, the four things you don't see at the bottom of the screen we're going to come back to that. I'll just give you a brief heads of baldness in hearts delivery essentially is in respect off delivery costs. Now the street position is if you get a reimbursement, you are reimbursed for the item and the delivery costs that is qualified by the fact that if you have asked for next day delivery for extra £7 that extra £7 will not be refunded to you. Simply diminished value means that if the item is returned to the trader on, the trader has concerns that it's been used for more than just being tried on has been used a lot that in that particular circumstantially may well say, we're gonna look at what you've done to the site of. If you were treated it in such a way that it now has diminished in value, we will effectively reduce the level off the refund that you get. Now. Consumers return of goods will see that typically the consumer may be asked to pay for the return of the goods, Therefore, that will not be covered in any refunds. And finally, if the services provided at the consumer's request, then you will have to make some payment. But we'll talk about that in more detail at the end of this particular session. So how does it look in practice? Well, the key things, their noses. For the next three slides, we're assuming that the correct information has been provided in the correct way of the correct time in accords with what we looked at in the first session. So have a look on here. You will see you got a box at the top that says, in terms of goods cancellation here it begins at the data conclusion of the contract and ends 14 days in the day after delivery. And you can see that illustrated on the slide for you relatively straight forwardly. So essentially, you've got a short period of time after receiving the item to change your mind and return it, but simply what you've got. See it now, Of course, remember that all of that is dependent on what you see in the first column in the box, which is at the time the information was provided. And when we say information here, we mean shed your to and schedule three as referred to in the first session. If it's provided on or before delivery, that's the position. What happens If it's not, we'll see in just a few slides time. That's goods. What about additional content? Will again, we have an assumption that the time the information provided is on or before the date the contracts concluded. I you when it's supposed to be a cancellation, then starts on the date of conclusion of the contract and ends 14 days and the day after the contract was concluded. And again, you can see that with your little diagram there now the key things and noticed that both in this example on the previous example. Actually, it's slightly more than 14 days, isn't it? So he you've got effectively 16 days. You know about the previous example. You actually have 18 dates so that 14 days is something that needs to be slightly qualified because it's just the basic, the core of it. But ultimately it can be somewhat longer as well. Finally, we have services, since these works in a very similar weight. Additional content. Again. We're assuming we provide the information in the right way at the right time and therefore, if we provide it on or before the date the contract was concluded. The cancellation period starts at the data conclusion of the contract and ends 14 days through a day after the contract was concluded. Now, before I move on to talk about extended periods of cancellation, let make one of the points and it's this. How many of you would like to wait 16 days for digital content to be provided to you? Have you lost weight? 16 days to the service to be provided to you. We'll see later on men that there is often a scenario where we are asked as a trader to provide digital content or services within the cancellation period. And how is that that one? How does that work well in Raval unravel rather in a short space of time. But for now we have more important issues, which are these. If we don't provide the correct information, we are looking at an extended cancellation period. How does that work? Well, have a look on the next couple of slides under two scenarios we need to make absolutely clip. The 1st 1 essentially, is where the trading does not provide it correctly at the outset, but does then provide it later on within a year, in which case you will see the cancellation period starts always at the same time for both for goods, services and digital content on it. Also, in each case, it ends, then 14 days after the consumer receives the information, so Let's assume that the consumer receives the information three months after they've purchased these particular items, at which point the cancellation period is extended by three months on then 14 dates. That is a significant issue that traders need to make sure they are clear about. But there must be a backstop period to all of this. What happens if it's never provided the relevant information we've seen on the next slide, where it's slightly different? If he's goods, then ultimately, it's the end of 12 months after the day on which the goods come into the consumer's possession. So we're kind of talking 12 months, plus around about 14 days, obviously slightly more, because there may be a gap between contract conclusion on delivery now for both digital content and services. They work in the same way as you'll see in the 12 months and 14 days after contract. Conclusion on remember. But while this particular cancellation period remains alive, the consumer can at any time return the item or reject the goods or services. If you like additional content and get a refill, and that is something that is a massive vulnerability for lots of businesses who still seem to think they can rely upon the fact that lots of consumers are largely ignorance about this. That is not a wise thing to be doing. And certainly you would be advising a client hoping to make sure they get their procedures in order, particularly with regard to the first session where I talked about the pre contract in confirmation requirements, the policy of these regulations. Now, let's assume, then that the consumer wishes to exercise their right to cancel. How does it work? Well, you see there on the next line two boxes, first of the exercise itself, the basic obligations for the consumer to inform the trader using a clear statement or the model cancellation form and the thing to notice. You cannot require them to use the model cancellation for, but you must make it available to them in the circumstances. So he thinks the notice that does not need to have been received, rather just sent before the end of the cancellation period. Albeit the burden of proof is on the consumer to prove that he or she has sense that particular notification. So enter the cancellation period. Of course, we talked about the 14 days. Typically a little extension. They must have sent it. It was not have been received. So it's important to know that particular point now, assuming they do that correctly. The effect is, as you can see, the obligations of the parties into the contract on terminated and that's been governed by regulations 34 to 38 depending on the type of contract, whether it's goods, digital content or services. And whenever you look at the detail of each of those in turn. So before we get onto all of the detail that let's look at the next life, she's about reimbursement now, just particularly again with the goods focus. But ultimately, having focused on good, you will begin to see also how is potentially applies in respect of services on digital content. So the reimbursement note is all payments, including postage and packing. So I paid 9 99 plus p and P for a night, and to be sent to me, I must be entitled to be refunded 9 99 plus p and P. Subject to the exceptions, you going to see on the right hand side off screen the timing again. It's typically around about 14 days, although you'll see two variants if the trade and does not collect the goods, that it's 14 days when they receive the goods, or if earlier, the day on which the consumer supplies evidence of sending Now the key thing to note here is it is technically possible for the goods not to have arrived back at the trader before the trader is required to make the refund. Then that's something we'll see later on. The EU new consumer or the New Deal for consumers is looking to address more on that later. But just note it is possible, albeit fell in likely. The alternative is where the trade it does collect. We'll see what we mean by that in just a moment. It'll be 14 days after the trader is informed off the consumers decision. Therefore, the trader has it within its own hands to go and get the item and then inspect it. And so now how is that done? Well, saint means of payment, No feet and surprisingly, that's what we expect in our consumer legislation in various quarters. That importantly, the two exceptions now holding mentioned them. But I'll mention them again because they are significant in the circumstances. Enhance delivery. Since that's the postage and packing basic first car supposed will be refunded over above That will not be refunded and similarly diminished value by unreasonable handling if there's damage to the item. Ultimately the trader can refuse to give a full refund and could take it into consideration. He thinks you know, though in all of this is the limits with regards. All of this have to be communicated on the schedule two paragraph l and we talked about how you might do that in the first session. Now what about the physical return of these particular items? How does that work in practice? Two scenarios, first of all, where it's the traders. Responsibility. Well, the trader will be responsible where they have specifically offered to collect the item or they've delivered it in the first place. Now, delivery typically means they turned up in their own van and handed your washing machine in which goes expectations they'll come back in their van and recover your washing machine. In the circumstances. In both of these scenarios, of course, the cost of this will be at the expense of the trader. It is not, however, the trainers responsibility unsurprising me. It'll be the consumers responsibility, and therefore the consumer will be responsible for sending back or handing over the particular item at an address. That's either bean specified by the trader or if the trader has not specified it, then ultimately any place of business off the trader. As Regulation 35 says now again, the timing of this, typically no later than 14 days after the date that the consumer has informed the trader off their desire to counsel. And who's gonna pay the cost. Now this is the king thing from a trader's perspective. Ideally, you want the consumer to pay the cost, and it is something like a book or clothing or DVD or smallish item of that. So I think it's quite clear you would require the consumer to do so. It is a washing machine or larger items. Some likely you'll get away that, However, in the circumstances, the key things I noticed you could only require the consumer to pay for the return cost. If you have stating in your teas and sees, or in the information that we talked about the first session that you will require them to do so. And this is the schedule two paragraph M for mike information. So you've got to make sure you do that if you fail to do so. Ultimately, you cannot require the consumer to actually do this. Now, how do we spell out all of this in our terms and conditions where you may recall from the first session, we had a reference to something called the model instructions on. You'll see them set out on the next three slides in all of their glory. They are not compulsory there, entirely voluntary. But ultimately, if you do use these three things here, all these three statements that you see on these next three slides you will go a long way towards complying with their obligations, doesn't providing information about right to cancel effects and cancellation of a lot. I'm gonna read through these with you very briefly, because it's important that you get your head around this in a bit more detail so right to counsel you have the right to cancel this contract within 14 days. We know that anything without giving any reason. So unlike the Consumer Rights Act, where there's gotta be issues about satisfactory quality or fitness of purpose or not comply with descriptions. So here it's simply a right to change your mind. Let's just emphasize that one more time cancellation pre will expire. 14 days. Sorry, let me just go back over that. The cancellation people expire after 14 days from the day off delivery typically locate saves. Want to make sure we get back clear to exercise the right to counsel you must informers of your decision to cancel this contract by a clear statement. E g. A letter sent by Post fax or email. You may use the attached model cancellation form, but it's not obligatory hugely, hugely important statement. You cannot require them to use it for lead to meet the cancellation deadline. It's sufficient for you to send your communication concerning your exercise of the right to cancel before the cancellation period has expired. Again, though the proof is on the consumer to prove right next line, then the model instruction schedule three part anyone who got here again. Part two of this effects of cancellation. If you cancel this contract according to what we just talked about will reimburse you all payments received from you including costs of delivery except the simplemente re. That's then hearts delivery points. We may make a deduction from reimbursement because of unnecessary handling, and that's the diminished value point. So we clearly state that here in this particular slide and in this particular phrase and finally we will make the reimbursement without on Jubilee. We know that not later than 14 days, the day you return or provide evidence to remember, we don't always have the right at the minute. So we're waiting for the item before we refund. Well, im not to come to the end be There were no good supply 14 days from the day on which we are informed about your decision to cancel the contract and will make the reimbursement using the same leads. And so so it's really important we get this clear about using those model instructions because it will remove on off a lot of uncertainty about what you should be writing. So be clear about what that says. Read it carefully and make sure you insert it. If you are drafting season sees for a trader, if you are actually been offered consumer and see whether they use these at all, and if so, how they used them correctly as we have just sit down. Now that's mainly goods, then dealt with. What about services and what a bounce. Digital content. Well, I mentioned earlier that there may well be a concern about whether anyone would want to wait too long. Toe have services provided additional content provided, and that's what we're gonna look at in the next couple of slides. What is this in practice? What are the requirements? How does this work? Can we start early or know how has it affected if there's a subsequent cancellation? These are all valid questions were about to look at. Now that is particularly relevant for services, because if you can see, we're gonna move onto a heading now off services supply in the cancellation period. Two scenarios that arise here and are dealt with by Regulation 36 1st of all, commencement pre expiry note. Subsequent cancellation. So what happens here is the consumer after traded to start work within the cancellation period, and that work is then completely satisfactory and no cancellation is forthcoming. Let's deal with that easy scenario. First you can that then, as a trader, begin as long as you have an express request on durable medium from the consumer that they want you to start. And also they must acknowledge. And this is the key phrase that the consumer will lose his or her rights to cancel under these regulations once the contract is fully perform. If you do not, then effectively you can start early on. And if they don't cancel once the work is completed, that's the end off their cancellation rights. Now a trickiest scenario here is the second wall, the next slide parts commencement, pre expiry contract cancelled in cancellation period and service providers. Let's eat half of the work on then the Consumer Council's you. What will flow from this well again. First of all, the trade in East have made sure that in order to start early, they have the express request on a durable medium. Also an acknowledgement that the consumer loses their rights once the contract is fully performs. What then happens halfway through will illustrate this with a slide on the next slide. Halfway through, they cancel the work. What is the trader entitled to? They're entitled to a pro rata payment in respect of the work that's been taken. Let's illustrate this. We've got now in the next slide a scenario where you got exactly the time periods we saw before. You see here, we then have a contract that begins on Day seven. It is just destined to run today. 12. That is constant. Canceled halfway through the half of the work is done. What is this scenario there was, we saw in the previous slide. A pro rata payment is due from the consumer to the trade in respect of the work done. But the consumer has no obligation to pay for any further work that was anticipated under the contract. So what sort of wording should you put into your particular terms and conditions to deal with this suggested wording on the next slide then, which hopefully is relatively straightforward, but it usually usefully just summarizes the key ideas. If you ask us to begin performing the services before the cancellations come to an end, we will only be able to do so. If two things happen, you must to do so, ask us to do so in writing. Andi, you acknowledge your right to cancel will come to an end and I put this So it's clear when the cancellation expires or when the services are completed, whichever is the earlier then import things. Remember at the end, if you do, you cancel within the cancellation period on. Before the services are completed, we will charge you a proportionate amounts in respect of the work done. If you put that into your T's and C's, then you should be perfectly able to rely upon these things and start. Obviously, you would need to think about the mechanism for making sure that you do have a particular requests on durable medium That might be an email might be a letter might be completed form or something to that effect, but generally speaking relatively straightforward to do in circumstances that serves this one additional concept. Then again, how many of us looking at this today would want to actually wait 16 days also in order to download digital content? So we're assuming particularly here. We have got a scenario where we have digital content, not on a tangible mediums are not a DVD or a CD or any of the writer. What we got instead is that we're gonna download onto our smartphone or tablet or the device off that particular sort or the rules. In fact, to be say this. The trade was not begin provision off the digital content before the end of the cancellation period. Just like the services, unless low the consumer is given express consent. The consumers acknowledged the right to counsel over the regulation. 29 will be in lost on the traders. Provide confirmation off. This, in which case you can take all those three off the consumer's right to counsel ceases if provisions of the digital content begins begins before the end of the cancellation period. Wrote to be straightforward conceptually, then ultimately going to be thinking about how you would evidence that through your particular website, perhaps ticking a box, some for a specific statement but also need to back all that up. You expect again some wording of the sort that I've got here on this slide against suggested wording. That's all it is you might want to use. This is the basis for your own wordy. If you ask us to provide digital content on a long, tangible media moat, non tangible medium, downloading it before the cancellation period has come to an end, we will only be able to do so. If you ask us to do certain writing, you acknowledge that your right to counsel will come to an end when the cancellation period expires. I should have gone to where? Change that. Sorry. You don't have to edit this bit little bit for me. Okay, at Molly's that your rights cancer will come to an end when we begin to provide the digital content. And finally, we have confirmed your request on acknowledgement to you in lighting where we comply with these requirements. Your right to counsel ceases once we start to provide the digital content. So again, that's just for your information and for your background. But in the circumstances, it's important to make sure you got some wording to that effect. But also, you need to be thinking about the practicalities of this. Now, finally, one of the receipt before we look again at the issue enforcement finally, and then they want to things around you. New deal for consumers and celery contracts. In the past, what happened was this. You may have a distance contract with salt that we're talking about today. Ancillary to that was perhaps a consumer credit agreement or some form of other additional supply contract under the old rules that we have. Essentially, the ancillary contract had to be canceled at, say, at the same time separately. Now the key things it does. It is said that the head contract, the contracts for distance contracts in this context is terminated successfully, the ancillary contract is automatically terminated. Andi, a full re from this forthcoming, except in this scenario to see at the bottom of the slide, which are exactly the same scenarios we talked about before. So I'm not gonna dwell on that. Suffice to say that if the this is converts, council ancillary contracts will be automatically cancel. You do not need to do anything more about it. If you're consumed, right, let's talk about enforcement then, and they will talk briefly about the U new deal for consumers. And then we're going to pause this session today so you can't contract down in the regulations regardless, what all sorts of people have told me over the years and also the websites of state and say we don't we aren't covered by all this. You cannot contract out of this is your doing trader to consumer. Now who's the regulation? While the regulator in the main is the Competition and Markets Authority occasion, there are other regulators that can put their or in, but that's talking about these like financial services. And so where we may have different regulations anyway walking the CMA due to at the moment where they could carry out a review off websites, often in conjunction with trading standards. I'm not talking about trading standards today. They have slightly more intrusive powers, Shall we say, essentially, they will carry out to review. And also, if they don't like what you're doing, they may well bring against you some for enforcement notice, which also it could lead to an enforcement order from the court. Most organizations will comply with it at that particular point. In fact, I'm not aware of any court cases that have arisen with regard to enforce connection to these regulations. Of course, in addition to the possibility of that, there is also the possibility of damage to reputation if people know that you're not providing them with that rights. But your biggest exposure is with regard to cancellation rights. If you are a traitor, ultimately receive that they can be expanded, considering up to a year in 14 days. Effectively on. Also, bear in mind that if you fail to provide some information that Elektronik means that we talked about the first session, there is a right for the consumer to rescind the contract at any point. What so ever So bear in mind, these particular rules are important. They are significant. You do need to make sure you comply on there. Maybe in the future. Greater enforcement powers for the CIA may depending on how the U new deal for consumer consumers works out in practice, talking of which might just have a look at one or two little changes that that's going to make potential to this area. And then we will wrap up recession. So the EU New deal for consumers We talked in the first session about potentially the rights that exists at the minute for painful content here. The traditional content are likely to be extended to free digital services, but in addition to that, there are actually two are angles which improved the lot off the trader as well. Let's have a look at what those are just briefly. First of all, the issue of returned goods remember, we were talking about the fact you might try something on. You might use it. Can you then return it? And so on, while the key thing to notice, they're making, um, or severe distinction with groups that have simply been tried on and then immediately sent back, as opposed to goods that have undergone further usage, and to try and limit the possibility for consumers to try it on, shall we say and use it several times and then return it. The view is that what needs to happen here is that any evidence off further usage other than simply trying it on, will lead to a loss of cancellation rights under these regulations. Now the line between trying it's on and further usage maybe a fairly gray one. So I'm not convinced that will make a huge amount of difference. But it is a step in the right direction. I think, from the trader's perspective, more important that there is the issue of reimbursement you will see or you have seen today in this session that the minute there are scenarios where ultimately a trader may be required to make reimbursement within that 14 day period without having received the goods back. So it's simply down to a proof of sending on what's proof of sending have been received and ultimately, 14 days in that point, even if the goods didn't turn up, that is changing now under the U new deal for consumers, assuming this is put in place in 2019 with an enforcement data 2021 as you well know, interest in that particular context. Ultimately, the 14 days won't start to run until has been an opportunity to receive on inspect. No obligation to reimbursed until you've done so. And if that comes in, that will be a powerful right for traders to be a little bit more proactive in a bit more assertive. And so we are not going to refund until we get the item back. What we do get it. But we're not happy. The stages in therefore diminished value says we can reduce the woman, so watch this space. Those are only proposals at the moment. I think it's fairly likely they will come into force very soon. Moved to keep an eye out for Well, let's summarize all this didn't bring this session to an end. We have seen that there are limits to the cancellation, right? I'm not going through those again. They're relatively straightforward Rights Council itself, assuming that things that are properly is typically about data conclusion of the contract, followed by a period of approximately 14 days after it. But it can be longer, particularly in the scenario relating to goods. Cancellation period will be extended ultimately up to a year on 14 days, pretty much the longest period of time if the information you are required to provide under regulations 13 and 16 and indeed others is not provided in the correct way at the correct time, it says of exercise and effective cancellation. Remember that the consumer does not need to use the cancellation form, and ultimately, the burden is upon them to prove that they have at least sent cancellation motives within the 14 days. The effects of that is then that regulations 34 to 38 apply contract comes to an end full refund, including precision packing subjects of the exceptions orbit. We've seen that in terms of services, additional content, the position is slightly more complicated and of course. All of this is then complicated Further by that changed potentially coming from the EU New deal for concerts. Right? We'll also I got say, hope you've enjoyed both off those sessions. So as always, thank you for your kind attention. I hope speech again sometime in the future. Like you, I'm good days.
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