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The Consumer Rights Act 2015 will soon apply to transport operators
Consumers might be surprised to learn that the Consumer Rights Act 2015 did not apply to consumer contracts for travel by air, sea or rail when it came into force in October last year. The Government have now published plans to apply the Act in full to the sector by October 2016.
Some of the services to be affected by the change include:
- Bus operators
- Private hire vehicles
- Ferry operators
The Act will increase transport operators liability for cancellations and delays to services, giving consumers statutory rights to receive a minimum standard of service, performed on time and for a reasonable price. If the transport operator (deemed a trader under the Act) fails to perform then the consumer has the right to a refund or price reduction.
The Act prevents transport operators from excluding liability to consumers and outlaws unfair terms which create a significant imbalance in the rights of the consumer against traders. These changes will directly affect transport operators who do not provide clear pricing up front. This may particularly affect private hire vehicles. It will also prevent offering compensation on a sliding scale depending on the length of the delay where this limits liability to less than the ticket price.
Consumers will gain new rights to bring a claim for breach of competition law, either collectively or as individuals. It will be interesting to see whether passengers affected by poorly performing services take advantage of this new provision.
Transport operators who fail to meet the new standards imposed by the Act face more claims for compensation by consumers and enforcement action by regulators which may lead to fines and restrictions being imposed on their business.
The new remedies introduced by the Act are in addition to existing sector specific consumer redress schemes for air and sea travel imposed by EU regulations. It is still unclear how Brexit might affect these existing schemes.
The rail sector remains exempt for now but is expected to be included in the future.
Some practical steps to consider in order to comply with the Act:
- Give clear pricing information up front
- Do not limit liability to consumers for delays or cancellations to less than the ticket price – adjust your sliding scale compensation accordingly
- Review your terms of carriage to make sure they are fair, clear and enforceable against consumers. Consider applying different contractual terms to businesses and consumers to minimise liability.
To discuss how the changes will affect your business contact our specialist transport team on 01392 207020 or email email@example.com.