This blog piece takes the theme of ‘Reforming the Law of Obligations and Judicial Activism’ and places it in the context of EU consumer contract law reforms. These have brought significant changes to the contract law of Member States, but obviously do not affect the law in non-Member States of which we must now include the UK. My focus will be on three 2019 EU Directives that reform the law relating to contracts for the sale of goods (Directive 2019/771/EU), contracts for the sale and supply of digital content and digital services (Directive 2019/770/EU) and introduce reforms on other consumer welfare matters (Omnibus Directive 2019/2161/EU). The implementation deadline for the 2019 Directives was 2022 and they are now in force.
My blog piece will address two questions of importance to comparative contract and consumer lawyers:
- First, post-Brexit, how great is the divide between EU and UK consumer law in these fields?
- Second, if there is a divide (*spoiler*: there is), to what extent can judicial creativity bridge this gap?
Reform of EU Consumer Contract Law
The 2019 Directives, now in force across the EU, make significant changes to national contract law. Directive 2019/771/EU (SGD) puts in place a new sale of goods regime which covers all sales channels, including online sales, and renders the seller liable to the consumer for any lack of conformity which exists at the time the goods were delivered, and which becomes apparent within two years of that time. Importantly, it repeals the minimum harmonisation Consumer Sales Directive (1999/44/EC) and replaces it with a maximum harmonisation directive. On this basis, EU consumers will be offered the same remedies throughout the EU with a requirement that goods must be in conformity both with what is agreed and with what the consumer could reasonably expect.
Directive 2019/770/EU (DCSD) is the most innovative of the directives. For the first time across the EU, a specific regime is created, giving consumers the right to a remedy when digital content or a digital service is faulty. Again, a maximum harmonisation approach is taken. Significantly the DCSD is forward looking. It recognises that consumer protection needs to go beyond tangible goods and address the specific issues that consumers experience in purchasing digital content and services. It also recognises divergence from traditional modes of contracting. In many cases, the consumer will not pay money to access digital content or services, but simply provide personal data instead. This is integrated into the reforms. Remedies, however, follow the more traditional route of asking the trader to fix the problem and, if the problem persists, obtaining a price reduction or terminating the contract to get a refund.
Directive 2019/2161/EU has a broader focus and seeks to provide better protection for e-commerce consumers by adapting existing EU consumer protection laws to respond better to the digital market. In so doing, it updates the following directives: Unfair Terms in Consumer Contracts Directive 1993, Price Indication Directive 1998, Unfair Commercial Practices Directive 2005 and Consumer Rights Directive 2011. Traditional consumer rights are now extended to digital transactions, for example, to include the right to withdraw from the transaction within 14 days, and the right to receive vital pre-contractual information. Contemporary digital issues such as fake online reviews are addressed to enhance online marketplace transparency. The Consumer Rights Directive now covers contracts under which the trader supplies or undertakes to supply a digital service to the consumer, and the consumer provides or undertakes to provide personal data. Additional guidance has been provided concerning unfair commercial practices in digital markets such as data-driven personalisation, dark patterns, and influencer marketing, as well as on the obligations of online platforms and marketplaces.
A Common Law Comparison: How wide is the gap between EU and UK consumer law?
Ireland, as an EU Member State, has implemented the 2019 Directives in its Consumer Rights Act 2022 (in force since 29 November 2022). The Irish Act also includes previously transposed consumer Directives, although the Unfair Commercial Practices Directive continues to be implemented by the Consumer Protection Act 2007. The 2022 Act is a considerable achievement although, given its aim to consolidate consumer law to the greatest extent possible within one statute, a complex statute that has 176 sections, 14 Parts and six Schedules.
A comparison between Ireland and the UK is particularly revealing in this field given, prior to the Act, Irish consumer and sale of goods law had borne a distinct resemblance to UK law. This is not surprising given their shared history pre-independence (the Sale of Goods Act 1893, albeit modified, is still in force in Ireland). A comparison between the UK and Ireland therefore shines a light on the degree of divergence between the UK and EU Member States.
While some common law characteristics remain (e.g. use of implied terms), the Consumer Rights Act 2022 (CRA 2022) is very much a statute influenced by EU law, which is perhaps inevitable given the maximum harmonisation character of the SGD and DCSD. The 2019 SGD makes changes to the test for conformity of goods and, on this basis, the CRA 2022 takes account of subjective and objective requirements. Special provision is made for contracts for the sale of goods ‘with digital elements’. For example, s.17(1)(a), CRA 2022 requires that they be of the description, type, quantity and quality, and possess the functionality, compatibility, interoperability and other features, specified in the sales contract. Section 18 (objective requirements for conformity) makes explicit reference to technical and sector-specific industry standards, accessories the consumer may reasonably expect to receive and features such as durability, functionality, compatibility, and security normal for goods of the same type. The burden of proof (s.22), as per Art 11, SGD, is also more generous: it is presumed to be on the trader where it becomes apparent during the period of 12 months that goods supplied under a sales contract are not in conformity with the sales contract unless such a presumption is incompatible with the nature of the goods or with the nature of the lack of conformity. This contrasts with six months under the Consumer Sales Directive/CRA 2015.
More extensive provision is made for contracts whose object is the sale and supply of digital content and services. Here we clearly see a digital regulatory gap for UK consumers. While the UK made some attempt in the CRA 2015 to provide for contracts for the supply of digital content (Part 1, Ch 3: ss.33-47), these provisions were modelled on those for sale of goods (e.g. s.34 provides that digital content must be of satisfactory quality) with few provisions specifically directed to digital content issues (e.g. s.39 supply by transmission and facilities for continued transmission). In contrast to the DCSD and Part 3, CRA 2022, no provision is made for payment by way of providing personal data nor for digital services. The latter is a significant omission. Termination is also not an option (in contrast to the rather complex provisions of the DCSD, implemented Part 3, Ch 3, CRA 2022). The view is taken that, in most cases, digital content cannot be returned in any meaningful sense and so a remedy of termination would be inappropriate. Digital content sold on a tangible medium that can be returned is subject to the ordinary goods remedies.
The impact is two-fold. First, UK consumers do not have access to improved rights and measures aimed to protect the digitally vulnerable consumer. This digital gap will expand as the European Commission proceeds with its process of updating existing consumer law directives. UK consumers are thus denied access to new measures that include regulation of online marketplaces (such as eBay) and online searches (such as price comparison sites).
Secondly, given the strong trade links between the UK and Ireland (and of course the rest of the EU), it is in everyone’s interests to encourage UK businesses to make contracts with UK and EU consumers.UK businesses at present must navigate (and adapt their websites to respond to) different rules at UK and EU level in relation to online transactions.
Can the Gap Be Bridged?
- The Consumer Rights Act 2015 and Digital Market, Competition and Consumers Act 2024
One obvious way to narrow the divide is for the UK government to introduce legislation parallel to that of the EU. The UK with the Consumer Rights Act 2015 was originally ahead of the game as the first EU State to legislate on contracts for the supply of digital content. However, the 2015 Act now seems dated, given that it contains old/repealed versions of EU Directives and fails to address key parts of the digital market such as digital services or contracts in return for personal data. There is nothing, however, to stop fresh legislation bar the shadow of Brexit. Indeed, the Digital Markets, Competition and Consumers Act 2024, Part 4 (Consumer Rights and Disputes) updates the regulation of unfair commercial practices (based on the retained 2005 Directive) and does innovate e.g. matters such as fake reviews are regulated even if the latter was only included (in Sch.20) at a late stage due to considerable lobbying by consumer groups. The 2024 Act imposes new duties on traders in relation to subscription contracts, regulates consumer saving schemes, and prohibits ADR procedures for consumer contracts where the provider is not accredited nor exempt. Intervention is thus possible, but it is piecemeal and does not necessarily mirror EU regulation nor display the ambition of the Commission’s broader regulatory programme (see Europe’s digital decade: 2030 targets).
- Judicial Creativity
Can the judiciary help? This can be achieved in two ways. First, in relation to the digital content provisions of the CRA 2015, there is nothing to prevent a judicial interpretation of “satisfactory quality” or “fitness for purpose” that is aligned to the needs of the digital consumer. Secondly, and less likely, a court might seek to adopt a more generous interpretation of section 33 which currently confines the CRA 2015 to contracts for the supply of digital content “for a price”. Could the courts take a more purposive approach, as seen in cases such as Chappell v Nestlé (chocolate wrappers capable of amounting to consideration)? Sadly any broader interpretation of “price” to include personal data would seem to be blocked by the CRA 2015, s.33(5) which states that such an extension would be a matter for the Secretary of State.
A bigger stumbling block in the UK Act is the lack of reference to digital services. The CRA 2015, s.49(1) provides that every contract to supply a service is to be treated as including a term that the trader must perform the service with reasonable care and skill. Such a general provision will be difficult to interpret with an eye to the digital consumer.
Fundamentally, we must question to what extent the UK judiciary is able to take on this role. Few consumer cases are reported in the higher courts creating precedents for future cases. Most cases, if litigated, will be unreported and in the lower courts. Equally, without a clear steer, to what extent can we expect judges in the small claims or county courts to be sufficiently digitally literate to raise issues of interoperability and the need for updates and information obligations?
Conclusion
Brexit has brought divergence, but can there be functional convergence between EU and UK consumer law despite Brexit? Should the new Labour government be willing to legislate mirroring EU reforms, this would undoubtedly benefit UK consumers and reduce the burden on businesses facing different regulatory regimes. Failing this, the publication of government guidance would assist litigants and the courts to engage with the challenges presented by the digital market and provide a clearer idea of what protection digital consumers can expect. Finally, an active judiciary can attempt informal convergence if it is prepared to utilise the resources present in UK consumer law to protect the digitally vulnerable consumer. This is, however, subject to the limited UK legislative infrastructure which, post-Brexit, sadly lags behind its more proactive EU counterpart. Consumer law, therefore, seems to be an area where judicial creativity can only take us so far. There is a real need therefore for continued lobbying by consumer organisations such as Which? to push for legislative reform.
Further Reading
- P Giliker, “Implementing Directive 2019/770/EU on Contracts for the Supply of Digital Content and Services: A common law perspective” in Z. Slakoper and I. Tot (eds), EU Contract Law and the CISG: The Effects for National Law (Routledge, 2022)
- P Giliker, “Legislating on contracts for the supply of digital content and services: an EU/UK/Irish divide?”[2021] Journal of Business Law 143
- P Giliker, “Reforming Consumer Law in the Digital Market post-Brexit – An EU-UK-Irish Divide?” in C. Twigg-Flesner and J. Devenney (eds), Disruption, Innovation and Re-alignment in UK Consumer Law and Policy (forthcoming, Hart, 2025)
Posted by Professor Paula Giliker, University of Bristol
This piece belongs to BACL’s “Judicial Creativity” series which shines a light on the role of judicial creativity in recent reforms of the laws of obligations around the world. The series is edited by Dr Radosveta Vassileva (Middlesex University), Dr Sirko Harder (University of Sussex), and Prof Yseult Marique (University of Essex). To access the other pieces from this series, either select the “Judicial Creativity and the Law of Obligations” category or click on the #Judicial Creativity&Obligations tag on the BACL Blog.
Suggested citation: P Giliker, ‘Reforming the Law relating to Contracts for the Sale of Goods and the Sale and Supply of Digital Content and Services: A Brexit Divide?’ available on BACL Blog published on 11 October 2024.
Picture credits: Henczuk, Wikimedia Commons
British Association of Comparative Law 
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