Significant consumer rights decision on rejection of goods

The appeal court has confirmed that continuing to use faulty goods after rejecting them does not automatically prevent consumers from claiming a refund.

The claim in question concerned a Jaguar car purchased by Mr King in June 2019. Just over a year later, he rejected the car by email, making reference to his rights under section 9 of the Consumer Rights Act 2015. Mr King claimed that a fault with the diesel particulate filter meant the car was not of satisfactory quality at the date supplied or any point thereafter. Notwithstanding the fault, he continued to drive, tax and insure the vehicle.

When the dispute came to court, both the sheriff and Sheriff Appeal Court found that the common law rule established in Ransan v Mitchell (1845) 7 D 813 applied and that Mr King was not entitled to rely upon his rejection of the vehicle because he had continued to use it after rejection.

Importance to consumers

Having been unsuccessful in his litigation in the sheriff courts, Mr King went on to pay off the hire purchase agreement in full and sold the car to a third party. This meant that by the time the case came to appeal before the Inner House, the factual position had changed so significantly that the outcome was essentially academic for Mr King. Nevertheless, given the general importance to consumers of the issue raised, and the unsatisfactory state in which the decision of the Sheriff Appeal Court would have left the law, the Inner House considered that it was in the public interest for them to address the matter.

The Competition and Markets Authority was also given permission to intervene in the appeal due to the implications for consumer protection.

Inner House decision

The primary issue raised in the appeal was whether the Ransan bar still applies i.e. whether a consumer is automatically prevented from insisting on the right to reject goods under the Consumer Rights Act 2015 where they have continued to use the goods after communicating that rejection to the supplier. 

In an important decision for consumer rights, the court found that this prohibition on use after rejection no longer applies. 

Under the 2015 Act, once rejection is intimated, the consumer is unequivocally entitled to treat the contract as at an end. This applies whether or not the trader accepts the rejection. From the moment that rejection is intimated, the trader is under an obligation to give a refund and the consumer is under an obligation to make the goods available for collection (section 20(7)). Continued use by the consumer is not incompatible with the obligation to make the goods available. Further, if use of the goods after rejection resulted in the consumer losing their right to a refund completely, there would be no need for section 24(9) of the 2015 Act, which relates to the trader’s right to reduce the refund, as the consumer would not be due any refund at all.

The court also observed that the effect of a complete ban on post-rejection use would be to place undue economic pressure on the consumer, who is the weaker party, and thwart the consumer’s ability to exercise their statutory rights. 

The Inner House allowed the appeal, finding that continued use after rejection is not a bar to securing a refund for faulty goods.

Contact us

Please contact Harper Macleod LLP’s dispute resolution team for advice on consumer disputes and the implications of this decision for suppliers.