In addition to these redress mechanisms, a consumer has rights at common law arising from the contract between the provider and consumer for the provision of advice and services. Existing statutory protection for consumers differentiates
contracts for the provision of goods, and contracts for the provision of services. Even in the latter category, the current law distinguishes between contracts for services where the service is accompanied by the supply of goods (or where the service includes the manufacture of goods) and “pure” service contracts where only services are provided63.
Most legal services would be “pure” service contracts. In such contracts section 13 of the Supply of Goods and Services Act 1982 (SGSA) provides that in a contract for the provision of a service by a supplier in the course of a business (which would include a legal services supplier) “…there is an implied term that the supplier will
carry out the service exercising reasonable care and skill”. In such a case, a legal
services provider could be held to have failed to act with reasonable care and skill. This will be the case where the provider has failed to exercise the standard of care that would have been exercised by a reasonably competent member of the trade or profession in question ie the Solicitor or CILEX fellow or unqualified paralegal. However, there are many situations in which goods and services are provided together. This is, of course, more obvious in the case of eg new parts supplied for a central heating system but can also occur in a contract for the provision of
professional services such as legal advice. For example, it would be possible for legal advice to be provided along with tangible materials such as legal documents. This is something which may occur more often in future with the unbundling of legal services and provision of some “DIY” documents and document checking services. In that case, legislative protection depends on what can be said to be the substance of the contract – the services or the goods? If the service is the substance, and the goods are incidental, then the contract would be governed by the SGSA. If goods are the substance of the contract then the Sale of Goods Act 1979 (SGA) would govern the contract and the SGA would imply terms regarding description, quality and fitness for purpose. SGSA would still apply to the service element of the contract. What of the situation where tangible goods such as documents are provided on a stand-alone basis eg this is an option with AA Legal Documents? The provision of documents would be classed as a sale of goods. Where for example, there was a defect in the documents, SGA would provide implied terms about quality and fitness for purpose which are judged by outcome based standards ie the question is not about reasonable care and skill as with SGSA, but whether the “goods” meet their
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description, whether they are of satisfactory quality or whether they are reasonably fit for a particular purpose.
The position becomes even more complex where the service provided actually caused the defect in the goods ie incompetent drafting creates a legally flawed document. In such a situation, the current law is unclear as to when and how the law may impose an outcome based standard64.
As the basis of establishing liability under the SGSA and SGA differs, the remedy available to consumers may also differ. For pure service contracts, remedies are a matter of general contract law. Depending on the status of the term the appropriate remedy would be damages for a more minor breach and a rescission (an unwinding) of the contract for a more major breach. The fact that remedies are not set out in statute makes remedies for a poor quality of service, at common law, inaccessible to the consumer. The remedies available to consumers are a mixture of common law and statutory remedies. This leads to confusion to consumers about exactly what their remedies are. For example, the right to reject goods if they are not of
satisfactory quality is a common law right. Additional consumer remedies e.g. the right to replacement goods or to rescind the contract are statutory remedies. It is well recognised that the remedies are confusing and in fact lead some consumers to believe they actually have better remedies than those the law actually provides. The Department of Business, Innovation and Skills (BIS) have recommended that the remedies for both pure service contracts and mixed contracts be put on a statutory footing “to a much greater extent65” and suggest that the law in relation to
services should be comprehensively codified. They acknowledge “it would be a
significant undertaking and it would require confronting and resolving some
controversial issues. But in terms of clarity and accessibility, this is the best solution”.
It may be that this is dealt with in the forthcoming Consumer Rights Bill.
The Unfair Terms in Consumer Contract Regulations 1999 could also apply to a contract for the provision of legal goods or services and would allow consumers to challenge standard terms in a contract which they consider unfair. The Regulations have for example been used to challenge standard terms in a Chartered Architect’s contract66. The OFT has powers under these Regulations to investigate a claim made by a consumer about such a term and to take action against the supplier. There is likely to be a lack of awareness among consumers about such legislative tools, as they are not signposted to the consumer as part of the contracting process. 64 Op cit p53 65 Op cit p89 66
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These 1999 Regulations are also expected to be reconsidered in the Consumer Rights Bill.