Ruling set to shake up treatment of car use following rejection

Scotland's supreme civil court has ruled a car buyer can insist on a refund on a faulty car even though he continued to drive it after deciding to ditch it.

The Inner House of the Court of Session said car buyer Alan King is not barred from seeking a refund, even though he continued to use the Jaguar vehicle after rejecting it due to a diesel filter fault.

King secured a hire purchase agreement on the £35,770 car through Black Horse after buying it from the Ayr dealership of one of the largest privately owned groups in Scotland, Park’s Motor Group.

Both parties argued that a common law restriction on using goods post-rejection still applied, but the court disagreed, stating that the Consumer Rights Act 2015 changed the landscape of consumer rights significantly.

The court said an absolute ban on post-rejection use would disadvantage consumers and favour traders, disrupting the balance between them. The ruling added that King, who continued to make payments under the contract, is entitled to pursue common law damages.

Delivering the opinion, Lady Dorrian said of the 2015 Act: “In our view it is clear that the scheme of the Act differs in substantial ways from the protection previously offered to consumers. Once rejection is intimated the consumer is unequivocally entitled to treat the contract as at an end, and this applies whether or not the trader accepts the rejection. The power imbalance which previously existed between consumer and trader, in favour of the trader, is thus to a substantial degree inverted.”

She continued: “The arguments for the respondents would result in placing a strict limitation on the consumer’s rights under the Act, and in many circumstances make it impossible for the consumer, who is in the weaker position, to insist in his rejection of the goods. It would return the trader to a position of undue strength and allow a dilatory, or unscrupulous trader, to thwart the consumer’s ability to exercise his statutory rights.”

“The effect would be that the automatic right to refund, which is a strong step forward in favour of consumer rights, would become somewhat illusory, because the effect of a complete ban on post-rejection use would place undue economic pressure on the consumer, the weaker party. It would be artificial not to recognise the practical issues which might arise where the consumer exercised the right of rejection, but the trader refused to engage.”