American-style attitudes to litigation becoming more prevalent in the UK
Today’s consumers are unforgiving if things go wrong and have the full force of the Consumer Rights Act behind them. Could you cover the cost of a claim?
People the world over associate Americans with litigation – the US lawsuit has become as much of a national trait as the Spanish siesta or British fish and chips.
There is also a long standing trend that where the USA leads, the UK is never far behind. Courtroom TV shows are becoming more popular here, and raise awareness of different forms of dispute resolution in the national psyche. On top of this, the Consumer Rights Act, introduced in 2015, formalizes the service levels that customers expect.
Clearly defined rights for consumers and mechanisms to ensure they get what they paid for are, of course, good news for everyone. It does, however, mean that builders and other service providers can end up facing sizeable bills if something goes wrong – so sizeable that they could destroy a small business. Today more than ever it is important to have the right builders insurance in place to protect both your business and the rights of your customers.
The Consumer Rights Act
The Consumer Rights Act 2015 came into force on 01 October 2015, replacing three previous pieces of consumer legislation – the Sale of Goods Act, the Supply of Goods and Services Act and Unfair Terms in Consumer Contracts Regulations.
It covers the following aspects of products and services supplied to consumers:
Repairs and replacements
Digital content rights
Supplying a service
From the perspective of a building company, it is this last component, supplying a service, which is of the most importance. The Act states that services must be performed with reasonable skill and care, at a reasonable price and in a reasonable timeframe. It also says that any information you provide to the consumer, either verbally or in writing, is binding and can be relied upon.
If any of the above are not met, the Act provides for the defective work to be either redone or refunded.
Despite an increasing trend towards legal action, Consumer bodies still recommend that parties in dispute first try to resolve their differences amicably. This makes the most sense for all parties – it disposes of the problem quickly and does not lead to any extra costs.
Where this does not work, the next step up the ladder is usually some form of Alternative Dispute Resolution. Typically, this will be through an appropriate consumer ombudsman.
The next step after this is formal legal action, either through civil court or Small Claims, depending on the scale of the dispute. Unfortunately, when things reach this level, each side is usually so entrenched that the possibility of an amicable solution has long passed and both side will be faced with escalating costs in terms of both money and time.
However skilled and experienced you are, nobody is immune from accidents and mistakes, and you can be 100% certain that something will go wrong somewhere sooner or later.
By taking out a tailor made builders insurance policy, you can relax in the knowledge that your business has insurance cover in place that considers the risks and circumstances that are specific to your business.