Coronavirus: delayed goods and insolvent businesses – what are my consumer rights?

Given the current difficulties that COVID-19 poses to the retail market, it is more important than ever to know your consumer rights in certain situations. In general, your consumer rights are protected by the Consumer Rights Act 2015 and the Consumer Contracts Regulations 2013.

In this short article, Kate Richmond sets out who is responsible for delayed goods, your delivery rights and your options if a business becomes insolvent.

Who is responsible?
As a starting point, if you buy something online, from a catalogue or over the phone that requires home delivery and it arrives late, you should complain to the retailer who is responsible for undelivered goods (not the courier). Your contract is with the retailer who you bought the goods from. The Consumer Rights Act 2015 makes the retailer responsible for the good condition and safe delivery of your order.

Delivery rights
The Consumer Rights Act 2015 provides that your delivery must be made without undue delay and within 30 days from the point of purchase unless you and the retailer agree otherwise. You are also able to cancel an order for most items ‘bought at a distance’ such as online, telephone or mail order purchases.

If you do not want to wait for an online order, you can exercise your right to cancel. Under the Consumer Contracts Regulations 2013 you can cancel orders for most goods bought online from the moment you place your order until 14 days from the day you receive your goods and get a full refund. However, there are some items where you do not get a right to cancel (for example, bespoke or personalised items).

If you made it clear to the retailer at the time you ordered that you needed it by a certain date and it is late (e.g. next day delivery), or if it was obvious to the retailer that delivery by a certain date was essential, you can treat the contract as at an end and claim a refund.

For example, if you contacted a retailer by email after purchasing a toy to let them know you bought it for a child’s birthday. In the email you informed them of the birthday date and importance of receiving the toy on time. When you contact the retailer to complain about the late parcel and request a refund, make the situation clear and provide as much evidence as you can to demonstrate that delivery on a certain date was essential (or should have been obvious).

Coronavirus and Insolvency
The ongoing coronavirus situation is having a drastic effect on retailers and may cause some businesses to become insolvent and risk closure.

An insolvent business is one where the liabilities of the business outweighs its assets and it cannot pay its bills.

The insolvent business may go into administration which is where an administrator is appointed to either save the business (through a procedure like a Company Voluntary Arrangement (‘CVA’), sell the business or ‘wind up’ the business (terminate it).

When a business is in administration, it is more difficult to exercise your rights. This is because the administrator’s role is to save the business and, to do this, they may decide not to accept your return of goods.

However, you could ask the administrator for a refund if the goods that you bought were not delivered, or you could claim for the cost of a repair if the goods were faulty.

The potential for refund or replacement depends on whether the business is still trading or not. If it is trading, you may be able to get a replacement or refund under the Consumer Rights Act 2015. If the business is not trading, you need to make a claim to the administrator as an unsecured creditor (it is unlikely that you will get a refund in this situation).

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