Handling disputes

LEGAL NOTICE

Information within this section is for guidance purposes only. It does not constitute legal advice and therefore BiKBBI accepts no responsibility for loss or damage to anyone in relation to content.

If in doubt, or if a customer commences legal action against you or your business, we recommend you seek independent legal advice as a priority. Details of useful contacts can be found below.

KNOWING THE LAW

The Consumer Rights Act (2015) is applicable throughout most of the UK and is seen as a guiding principle for handing disputes.

Regardless of your terms or any verbal or written agreement you may have with your customer, the consumer has legal rights that always take precidence, especially when in the case of dispute.

A common misconception is that tradespeople only have to provide a 12 month warranty against their workmanship. This is not the case. The statutory period of cover that a consumer is entitled to in relation to workmanship, is no more than 6 years.

Under the Consumer Rights Act 2015, certain standards apply to every contract for the supply of services. A trader supplying a service must meet the following standards:

• The service must be carried out with reasonable care and skill.
  This means that the trader must, as a minimum, work to the same standard as any reasonably competent person in that trade or profession. The law does not imply that any particular result will be achieved (for example, a competent doctor will not necessarily be able to treat every patient successfully) but many contracts will have express terms as to what result the customer can expect from the service. To minimise the risk of disagreement, it is advisable to state clearly where a particular result has been agreed and where there is a risk of the desired result not being achieved
• Information said or written to the consumer is binding where the consumer relies on it.
  This will include quotations and any promises about timescales or the results to be achieved. This applies if the consumer takes account of this information in deciding whether to buy the service or to make any decision about the service subsequently
• The cost of the service must be reasonable.
  A contract will often specify a price, or it will be clear about how the price will be calculated (for example, an hourly rate). Where the price is not agreed beforehand, the price must be reasonable. Typically, this will be judged against the prices that other similar traders might have charged.
• The service must be carried out within a reasonable time.
  Often, a contract will specify a date or time for the service to be performed or completed. Where there is no agreement about time, the timescale must nevertheless be reasonable. What is reasonable depends on the type of service and all other relevant circumstances.

In addition, there are many cases where goods are supplied as part of a contract for the supply of services. For the rules that apply to the supply of goods in these circumstances.

AVOID DISPUTES IN THE FIRST PLACE

A proactive approach to disputes is best… after all, if you get it right, it’s unlikely you’ll have to deal with many disputes.

• Professional from the start
  First impressions count. Make sure you conduct all dealings with your customer on a professional level from the outset.
• Clarity at the point of quoting
  Make sure you provide all customers with a full itemised quote before work commences.

A good quote should include:

• What’s included
• What’s not included
• The time it will take to undertake the work
• Your price
• Your payment terms
• A contract for service

You’ll find some useful template documents within the app.

DEALING WITH COMPLAINTS

Under the Provision of Services Regulations 2009, traders are under a legal duty to respond to consumer complaints as quickly as possible and to make their best efforts to resolve those complaints.

This means that traders must respond to emails and letters of complaint and that they must return phone calls. Where a complaint appears to be valid, the trader should put things right promptly. If the trader disputes liability, they should give a clear explanation of their reasons.

When you receive a complaint: Ask for clarity:

1. Ask them to put the complaint in writing – email or letter.
2. Instruct them to break the complaint down into numbered points.
3. Advise them that you will:

• Acknowledge the complaint once received.
• Formally respond to the complaint within 7 days.
• Once you’ve received the complaint: Respond with clarity:

1. Consider your response carefully and commercially (avoid emotion)… Remember, this is business and you are a professional.
2. Arrange a time to visit their home with a view to inspect the complaints yourself.
3. Use the BiKBBI Standards & Guidelines to assist the process of assessment.
4. Be reasonable – If the standard is below par, resolve it.
5. Go through each point carefully and respond to complaints individually. Don’t attempt to deal with the complaint with one single resolution.
6. Be aware that you may be recorded – it’s legal to record, but may not be legal to use as evidence… It could still look bad on social media!

Disagreement?

If you cannot agree to resolve the complaint, consider offering the customer an independent inspection – See: https://www.bikbbi.org.uk/inspection/

If a trader has exhausted their own complaints procedure in dealing with a complaint and the complaint remains unresolved, the trader must provide the consumer with details of an approved ‘alternative dispute resolution’ scheme and must say whether they agree to the complaint being handled by that scheme.

For more information please see ‘Alternative dispute resolution’.

THE CUSTOMERS RIGHT TO REMEDY

If the trader breaches the contract for the supply of services by failing to meet the standards required under the Consumer Rights Act 2015, the consumer is entitled to repeat performance of the service or to a price reduction.

• Repeat performance
  This remedy is available where the trader fails to exercise reasonable care and skill or where they breach a requirement arising from information they have given about the service. The consumer can require the trader to repeat the service in order to complete it properly. This work must be done at no cost to the consumer, within a reasonable time and without causing significant inconvenience to the consumer.

  The consumer cannot ask for repeat performance where it would be impossible to finish providing the service to the required standard.

• Price reduction
  The consumer can claim a price reduction where repeat performance is impossible or cannot be carried out within a reasonable time and without causing significant inconvenience. A price reduction can also be claimed where the service is not carried out within a reasonable time or where the trader breaches a requirement arising from information they have given about something other than the service itself.
• The amount of the price reduction will depend on how serious the breaches were and it can be anything up to 100% of the price. If the consumer has already paid in full or in part for the service, they may therefore be entitled to some money back.

Other remedies
The remedies under the Consumer Rights Act 2015 do not take away the consumer’s existing legal rights, which can include claiming compensation where a trader fails to meet the standards required by the Act or under an agreed term of the contract.

The Act itself does not include a right for the consumer to have someone else complete the service and then to charge this to the original trader.

Normally, a consumer will be happy to let the trader put things right, but there are cases where the service has been performed so badly that it would be unreasonable to expect the consumer to give the trader a second chance. There may also be circumstances where it would be impractical to do so – for example, where the service was a repair to a vehicle, and the vehicle then breaks down hundreds of miles from the original garage due to the work not being done correctly.

In cases like these, the consumer may be entitled simply to claim the cost of remedial work by another trader. However, even in these cases, it makes good sense for them to discuss their concerns and intentions with the original trader first in order to try to come to some sort of agreement about this.

TIME LIMITS FOR COURT PROCEDURE

Where goods are installed as part of a service, consumers can expect those goods not to fail prematurely, even if the reasonable life expectancy of those goods is several years. However, there is a time limit that eventually prevents consumers from making a claim through the courts.

For a breach of contract, a consumer cannot normally bring a claim to court more than six years after the breach (for example, this would be the date of installation if sealed window units failed). However, if you have offered a guarantee on the work then you have to honour the guarantee (and if you fail to do so, the consumer can make a claim up to six years from that date instead).

This does not mean all goods have to last this length of time, but this is the time limit that the law gives a consumer to take legal action. Where a trader has been negligent, longer time limits sometimes apply.

UNFAIR CONTRACT TERMS

The Consumer Rights Act 2015 covers the use of unfair terms in consumer contracts.

In addition, any attempt to mislead the consumer about their rights is an offence under the Consumer Protection from Unfair Trading Regulations 2008. See ‘Consumer protection from unfair trading’ for more information about these Regulations, which cover traders’ duties towards consumers in general.

NEGLIGENCE

Where a trader supplies a service, they owe a duty of care to the consumer and to others who might be affected by their work. If their work is substandard, the duty of care may be breached and the person who suffers a loss may be able to make a claim.

This applies even where there is no direct contract between the parties – for example, where the claim is made by one of the consumer’s friends or relatives, or where the trader is a subcontractor who is not working directly for the consumer. The duty of care is similar to the standard of ‘reasonable care and skill’ (see ‘What the consumer can expect (statutory rights)’ above), and it applies to the standard of work rather than guaranteeing a particular outcome.

TRADERS IDENTITY

The consumer needs to know, or be able to find out, who they are dealing with. A trader’s identity and address must be displayed at their place of business, on key business documents and on websites. This information must also be made available to consumers before a contract is made and whenever a consumer requests it.

If a trader fails to disclose that they are a limited company and there is then a breach of contract, the consumer may be able to claim against the directors of the business as individuals. If a trader fails to disclose that they are acting as an agent for someone else, then the consumer may be able to make any claim directly against that trader.

FREQUENTLY ASKED QUESTIONS

Q. If I provide a service to a consumer, do I have to provide a guarantee?
A. There is no legal requirement to provide a written guarantee for the service or for any goods supplied. However, you cannot take away the consumer’s legal rights, which may apply even if a defect comes to light some time after the work was done or the goods were supplied. If you do provide a guarantee, its terms should add to the consumer’s legal rights and they should be stated clearly.

Q. I carry out home maintenance and improvement work and I offer a 10-year guarantee. Does the guarantee have to be transferable to subsequent owners of the property?
A. Part of the value in guarantees lies in the consumer being able to assign them to subsequent owners. A term that makes the guarantee non-transferable is likely to be unfair.

Q. If I provide a service and something goes wrong, does the consumer have to give me a chance to put it right?
A. It is advisable, in most cases, for the consumer to give the original trader a chance to put their own work right. However, there are occasions where it would not be reasonable to expect a consumer to do this. For example, you could not expect a trader to get a second chance if the work is so bad that any reasonable consumer would have lost faith in their ability to do the work correctly.

Q. Someone asks a trader for a quotation. How is this different to an estimate?
A. A quotation is normally a fixed price whilst an estimate is generally a rough guess of what the work would cost.

Q. While a trader is doing some work for a consumer, the consumer asks for some changes to the job. If the trader has given a quotation, can the price now be changed?
A. Yes, the consumer and trader can change the contract by agreement. Disputes often arise where there are misunderstandings about what has been agreed. For this reason it is advisable to record all changes in writing.

Q. A consumer made a booking for a survey, but wasn’t home when I arrived. Can the trader charge for the appointment?
A. The trader can only charge to cover their losses. If they were able to book another customer in, so that the appointment time was not wasted, then there may be no loss. If the time was wasted, then a charge can be made, but the trader should take account of any savings made (for example, the cost of materials that were not used).

Q. A consumer complains that a service was done to a poor standard, but the trader says that the standard is acceptable. What should they do?
A. To settle a disagreement about the standard of work, it may be necessary to seek the opinion of an independent third party. This could be a surveyor or assessor, or another professional or expert in the service in question. Where an independent expert is to be used the consumer and trader should ideally both agree to this in writing – See: https://www.bikbbi.org.uk/inspection 

Q. A trader estimates that a kitchen installation will be installed in a week. After a week the work is not finished. Does the consumer have the right to cancel the contract?
A. If the trader has given an estimated completion date, rather than a fixed commitment, then the work has to be done within a reasonable time. The consumer should give the trader a final deadline for completion, after which they will be able to treat any further delay as breach of contract and cancel the contract.