The effect of Brexit on UK consumer protection law

Background

Consumer protection law aims to level the playing field between businesses and consumers when they contract with each other, and includes key provisions applicable to most B2C contracts, such as: 

• the fairness test i.e. contractual terms and notices must not create an unfair imbalance in favour of businesses;
• the transparency test i.e. contractual terms and notices must be in plain and intelligible language;
• the right of withdrawal i.e. the right of a consumer to cancel a contract formed via distance communications (or off-premises) within 14 days; and
• implied contractual warranties and remedies e.g. goods being of satisfactory quality.

Consumer protection law is formed from many different legislative sources, with most deriving from EU regulations and directives. For example, two of the most significant pieces of UK consumer protection legislation, the Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013 and the Consumer Rights Act 2015, implement most of the provisions of the Consumer Rights Directive (2011/83/EU). 

Effect of Brexit: 1 January 2021

Whilst EU based law remained largely in force and applicable during the transition period in 2020 (albeit with a different legal basis for such application), the transition period has now expired. In the short-term, however, UK consumer protection law has not significantly changed. 

The table at the end of this article sets out how the UK formally leaving the EU has affected the most significant consumer protection legislation but, in summary, the key changes are as follows.

1. Online dispute resolution – the European Commission operates a dispute resolution platform known as the ODR platform to resolve disputes arising from cross-border B2C transactions with the help of an approved dispute resolution body. From 1 January 2021, UK consumers will no longer be able to submit a new complaint on the ODR platform and will also not be able to act on any ongoing cases in the platform, whether to send it to a dispute resolution body, contact a UK ODR advisor or receive an outcome. UK businesses will not be able to access the ODR dashboard.

2. Co-operation between national enforcement authorities – the Consumer Protection Cooperation Regulation (2017/2394) has been revoked. The Regulation sought to facilitate cooperation between EU enforcement authorities in relation to consumer protection and enable the European Commission to co-ordinate common actions between national enforcement authorities. 

3. P2B Regulation – the P2B Regulation imposes obligations on platform/search engine operators where those platforms or search engines allow businesses to reach consumers in the EU.[1]  The territorial test for the application of the P2B Regulation is that the platform/search engine is aimed at consumers in the EU and at least some of the businesses using the platform/search engine are based in the EU. The P2B Regulation will continue to apply to platform/search engine operators based in the UK where that platform/search engine is used by EU-based businesses and reaches EU consumers. In addition, the UK has implemented additional legislation to create a dual regime that reflects the P2B Regulation but is restricted to the UK only i.e. the scope applies to UK-based businesses selling to UK-based consumers using the platform/search engine.[2] 

• contracts entered into prior to 2021 (provided on or after 17 December 2009) will be governed by Rome I; and
• contracts entered into from 1 January 2021 onwards will be governed by the new rules,

Future divergence

Whilst Brexit has not resulted in an immediate significant change to UK consumer protection law, it is likely that UK law will start to diverge from the EU position in the coming years. 

First, the UK is not obliged to implement EU directives that had not reached their implementation date, nor will any EU regulations be EU retained law if they were not applicable before the end of 2020. There are significant upcoming changes to EU consumer protection law that will not therefore automatically become UK law, including: 

• the Digital Content and Digital Services Directive (2019/770) and the Sale of Goods Directive (2019/771), both of which are to be transposed into national law by 1 July 2021; and
• the Enforcement and Modernisation Directive (2019/2161) that is to be transposed into national law by 28 November 2021.

[1] Regulation on promoting fairness and transparency for business users of online intermediation services (Regulation (EU) 2019/1150)

[2] The Online Intermediation Services for Business Users (Amendment) (EU Exit) Regulations 2020

[3] Regulation (EC) No 593/2008 of the European Parliament and of the Council of 17 June 2008 on the law applicable to contractual obligations (Rome I) (Retained EU Legislation)