Consumer protection law is a distinct body of law that regulates the contractual relationships formed between businesses and consumers. It aims to ensure fairness and transparency. In the UK, the development of consumer law has been largely driven by the EU through a series of directives and regulations.
Most EU law applicable in the UK as at 31 December 2020 remains in effect within the UK indefinitely as “retained EU law” (unless or until the Government decides to repeal or amend it). This new body of retained EU law includes a raft of consumer protection measures. In effect, consumer protection law is largely unchanged because of Brexit, at least for UK consumers buying from UK businesses.
Since 1 January 2021, UK consumers have continued to enjoy similar consumer rights as they did before Brexit. However, it may be more challenging to enforce redress rights when buying goods, services, or digital content online from an EU-based trader. With respect to cross-border disputes, the following points should be noted:
- UK consumers may need to seek redress through the courts of the state in which the trader resides rather than the UK courts,
- the enforcement of a UK court judgement against an EU based trader may be difficult and costly,
- UK consumers have lost their rights to use EU-based ADR mechanisms and the EU’s Online Dispute Resolution (ODR) Platform, which links consumers with ADR providers in the EU.
UK traders should also be aware of the consumer protection laws in force in the EU countries they are selling goods or services to. As was the case before Brexit, UK traders that operate in EU member states may be subject to consumer claims and to regulatory action. However, any judgment given by a court of an EU member state will not be recognised and enforced automatically in the UK. This might change if reciprocal arrangements are agreed in the future.
An obvious consequence of Brexit is that the UK no longer has any significant influence over the future direction of consumer protection law in the EU and vice versa. In the short term, it is thought unlikely that the Government will make material changes to UK consumer protection law. The Consumer Rights Act 2015 (CRA 2015) only came into force comparatively recently, alongside key changes to the UK’s regime of consumer bodies, making further wholesale reform improbable.
In terms of current policy, it appears that both the UK Government’s Consumer Green Paper and the EU’s New Deal for Consumers share similar aims in seeking to implement new rules to modernise consumer protection law, in particular, to address online commercial practices and online markets. Both the UK and the EU also intend to impose stronger penalties for breaches of consumer protection rules.
In the longer-term, however, it is thought likely that UK and EU consumer protection law will diverge. This may be problematic for those UK businesses which sell to consumers in both the UK and the EU. To deal with differences between the two consumer regimes, it may be necessary to draw up separate contractual terms and conditions and engage in different trading practices.
This Commons briefing paper considers some of the implications of the UK’s withdrawal from the EU for selected areas of consumer protection law.