Legal news round-up for small businesses- March

by Startacus Admin

Welcome to the first ever Startacus monthly legal news round-up, courtesy of Net Lawman expert advsior Thomas Taylor.  In the coming months he will be casting his eye over some of the key legal news stories affecting small businesses.. there's loads of cruicial info to get through so here is the march edition. 

New consumer rights laws are likely to change how you sell to your customers

Consumer rights law changes in June 2014, as a result of a new EU directive . In the UK, the changes will be made under legislation called the Consumer Contracts (Information, Cancellation and Additional Payments) Regulations 2013.

The changes will only affect businesses who trade with consumers, and not those who sell to businesses.

The main changes for all businesses will be:

• A businesses will not be allowed to make a “surcharge”  that exceeds the cost to it - so airlines won't be able to charge an additional £10 for paying by credit card rather than by debit card.
• A businesses will not be able to operate telephone help lines that charge more than the basic rate to call - so no more premium rate numbers for help or service if you are an existing customer.

For sales made on-line and through mail order (distance selling):

• The "cooling off" period will increase from 7 days to 14 days - customers will be able to send back goods without reason within 14 days. There are a few exceptions such as perishable goods. The old rules continue to apply so that the customer must return the goods in re-salable condition, software still in sealed pack, and so on.
• A businesses must refund a customer within 14 days of receiving the goods back (or from the date of postage if the customer has proof of postage) and in full (excluding non-standard delivery costs) if he cancels his contract (such as exercising the cooling off period)
• The consumer must explicitly acknowledge any obligation to pay when he makes an order - order buttons must be labeled "Order with obligation to pay" or something similar. A business trading online needs to think about how to implement this.
• By the time the goods are delivered, the business must provide the consumer with confirmation of some key terms of the contract on a "durable medium", such as paper or by e-mail. These include a description of the goods, the total price, and a breakdown of associated costs such as tax and delivery. Most businesses provide an invoice with this information, but many send an email message with some other title or muddle this  required contract information with sales or delivery information. It is best to title your message “Invoice” and keep it clean. 
• A website will not be able to pre-select additional options that incur additional charges. In other words: no more pre-ticked check boxes! You can still offer such a service, but it has to be for the customer to tick the box.

You may have to make two changes to your website to cover this.  First, you might need to change how your website works - button text and making some check boxes optional. Second, you'll probably need to change your terms and conditions of sale (published on your site). The changes don't require a lot of work, but are important.

For more information see, https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/266525/bis-13-1368-consumer-contracts-information-cancellation-and-additional-payments-regulations-guidance.pdf

Encouraging employment disputes to be settled privately

With the aim of increasing the number of employment disputes resolved before the claims reach a tribunal, the Government has published new regulations. The Early Conciliation Rules of Procedure come into force on 6 April 2014 as part of the Enterprise and Regulatory Reform Act 2013.

The new rules require that anyone wishing to make a claim (with a few exceptions) must first  contact ACAS, the Advisory, Conciliation and Arbitration Service, and complete a form that starts a process of attempted resolution out of tribunal by ACAS.

The primary role of ACAS officers will be to provide guidance on the law to prospective claimants so that they can form a better opinion on whether they have a case that is likely to succeed at a tribunal. The Government believes that  prospective claimants who are better informed about the law, how tribunals operate, and what the costs might be, will be more likely  to come to an agreement privately. The ACAS service is free, so should not only discourage cases that are unlikely to win, but also save businesses and claimants money and time.

To encourage the (possibly ex) employer to co-operate, employment tribunals will have the power to fine a business that loses the case up to £5,000 (paid to the Secretary of State not the employee) if the tribunal believes the breach of the employee's rights was malicious, deliberate or repeated, or if the employer had a dedicated HR business unit (the not entirely convincing argument being that any company with an HR department should be sufficiently aware of the law, and shouldn't defend cases that have a reasonable probability of being won by the employee). Although it hasn't explicitly stated it, the Government is probably hoping that the possible large costs in going to tribunal should encourage employers to settle early and in private.

The strategy of negotiation and conciliation rather than litigation is one that the Government is trying hard to promote. Courts and tribunals are busier than ever. Cynics may suggest that keeping cases out of courts and so reducing administrative costs, is a Government ruse to save money. However, going to court (or tribunal) is expensive, time consuming and stressful for all parties. We agree that all businesses, especially small ones, are better to seek settlement out of court.

Expect other initiatives from the Government to reduce the number of cases reaching court. Alternative Dispute Resolution is becoming increasingly popular as a first method of sorting problems - to such an extent that many contracts, and not just ones relating to employment, now include terms to seek resolution by such means before starting litigation.

More information can be found at: http://www.acas.org.uk/index.aspx?articleid=4028

Cheers Thomas and we look forward to your next legal roundup in 4 weeks time.   Don't forget that all startacus members get a fantastic 25% discount on Net Lawman legal documents and templates.

If you liked this then we reckon that you will like our new monthly financial news round-up for small businesses.

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Published on: 11th March 2014