A recent case which is currently being argued, surrounds the “no loss” principle. This principle is often used in construction and commercial cases, but its significance in consumer law is also relevant despite the statutory framework at s19 of the Consumer Rights Act 2015. We are all familiar with s19(3) of the Act and the short-term right of rejection, the right to repair or replacement, and the final right of rejection or price reduction that flows from that.
However, a claim was recently issued against one of our members where whilst a refund had been agreed, there were contractual sticking points, which allowed for specific deductions to be made. Unfortunately, an agreement could not be reached and the matter remains in litigation.
What was striking about the claim was that it pleaded only the deductions the parties could not agree upon, as set out in the contract. No claim was made for the value of the vehicle itself. At the time of the claim, no money had changed hands.
This led me to consider, based on that claim, whether a ‘no loss’ defence could be raised. The basis would be that, at the time of the claim, the claimant had not yet incurred the losses claimed, for example where losses are future or prospective. The court is required to consider whether the losses are probable, reasonable and fair to claim, even if they have not yet been incurred. Where a rejected vehicle is concerned, as in this case, if the claimant has accepted rejection and is not specifically claiming the value of the vehicle, the ‘no loss’ defence can, in theory, be argued on the basis that the claimed losses have not yet been incurred.
The proposed deductions are specified in the contract, and reliance would also be placed on the general principle that the courts in England and Wales uphold freedom of contract, meaning that parties are bound by the terms they have agreed to. However, there are limitations to this principle, as seen under s31 of the Consumer Rights Act 2015.
Nevertheless, where losses have not been incurred at the time of the claim, the ‘no loss’ principle may arise.
If you are facing similar refund or deduction disputes, our Lawgistics legal team can help through our telephone helpline or casework service.
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