Brexit & Consumer Claims – changes to the criteria for extending the time limit
New regulations have been made affecting the circumstances when the time limit for bringing consumer claims will be extended following the end of the Transition Period.
On the 20 October 2020, the Alternative Dispute Resolution for Consumer Disputes (Extension of Time Limits for Legal Proceedings) Amendment etc.) (EU Exit) Regulations (the Regulations) were made, which amend four pieces of EU-derived legislation in consequence of the relevant EU directive no longer applying to the UK following the end of the transition period on 31 December 2020.
What legislation is affected?
The Regulations will amend the following pieces of legislation:
- The Prescription and Limitation (Scotland) Act 1973
- The Limitation Act 1980
- The Foreign Limitation Periods Act 1984
- The Limitation (Northern Ireland) Order 1989
The specific provisions within these pieces of legislation that are amended by the Regulations were introduced in 2015 to give effect to the EU’s Directive 2013/11/EU (the ADR Directive).
The ADR Directive was created to ensure EU consumers are able to submit their contractual disputes over goods or services with an EU trader to an alternative dispute resolution (ADR) provider. It also sets out binding quality standards and procedures that ADR providers must comply with and places requirements on traders to inform consumers about ADR and when they are obliged to use it.
The specific provisions affected by the Regulations, and which were introduced to implement the requirements of the ADR Directive, provide that the time limits within which consumers are entitled to start court proceedings may be extended to enable parties to pursue non-binding ADR. The extension is for eight weeks from completion of the ADR procedure, enabling consumers to engage in ADR without jeopardising their ability to initiate court proceedings.
What are the changes?
The Regulations remove references to the ADR Directive in the above pieces of legislation and ensure that the time limits for initiating court proceedings will only be extended in circumstances where the consumer is resident in the UK (the trader may be a UK or EU trader as at present) and uses the services of an ADR provider authorised to operate in the UK.
The Regulations will come into effect on 1 January 2021 and any extensions begun before this date will be unaffected.
If you have any questions about issues raised in this article, or dispute resolution more generally, please do not hesitate to contact us to discuss matters: [email protected].