COVID-19 Consumer Legal Newsletter: 20/05/2020—Issue 3


Welcome to the third COVID-19 update from Beagles Insight—the research arm of the LegalBeagles Consumer Legal Forum. This free advice forum has over 100,000  registered users and has helped members of the public deal with over 800,000 legal problems since it started in 2007.


Insights from the Forum


Key Trends and Statistics

Currently, 50% of new threads on the forum are related to the pandemic, with approximately 30% specifically referencing COVID-19, and a further 20% on related issues. The majority of these threads relate to employment; difficulty in claiming refunds from companies (e.g. for cancelled weddings or holidays) and the compounding of existing debt issues.

Employment law continues to remain the dominant section of the forum. Compared to last year, this area has seen an increase of 2000 views, over the same period. In addition, the majority of journeys from the homepage of the websites are straight to the employment section, suggesting that many first-time users are accessing the forum with employment issues in mind.

Compared with this week last year, the LegalBeagles forum has seen a 16% drop in users, with a 57% drop in users accessing the court claims section. Follow-on research has shown that the main debt companies are not currently issuing new claims and are instead focusing on repayment by existing debtors. With regards to new claims, many are now stayed, with no new claims issued since the 12th of March. However, many companies are continuing litigious conduct, offering mediation, or withdrawing claims just before telephone hearings, apparently with the goal of encouraging settlement.


Most Searched Questions

It is interesting to note that following the Prime Minister’s announcement of an easing of the lockdown on the 10th of May, there has been a significant rise in questions around both employee and employer responsibility for the return to work. When compared to questions on the furlough scheme, where the focus was mostly on outlier issues or checking calculations of furlough pay, the return to work questions are tending to focus on mainstream issues such as health and safety obligations, and the right to refuse to return to work. This suggests that there is, as yet, little clarity amongst both employees and employers about the implications of the new announcements.

We are also, unfortunately, beginning to see the first examples of questions around COVID-19 and redundancies, suggesting that despite the extension of the furlough program, many businesses see their future as too unstable and uncertain and have begun the process of reducing staffing costs.

As previously mentioned, many consumers are facing issues regarding refunds for products and services affected by COVID-19, such as travel and weddings. Many suppliers are currently financially unable to refund consumers; however, the CMA has said that companies in the wedding and travel industries must comply with the Consumer Rights Act, providing full cash refunds. As it stands this seems likely to be detrimental to both small businesses and consumers, forcing small companies into closure, without providing consumers with financial remedy. We pick up this issue in our recommendations below.

Many consumers are also seeking to clarify their status under s.75 of the Consumer Credit Act which makes credit card companies jointly and severally liable for claims against the suppliers of goods and services. This suggests that there may be a raft of s.75 claims on the horizon, and credit card providers need to be prepared for this.


The Good, the Bad and the Ugly

In this section, we highlight best practice, who’s not doing enough and what could be improved.

Whilst there is no new good practice that has come to our attention there are still examples of bad practice and areas for improvement.

The Bad – Whilst debt companies are currently not filing new claims, private parking companies are continuing to do so. This is most likely to be driven by automatic number plate recognition (ANPR) systems which lead to the automatic filing of claims. Ongoing analysis of our forums suggests that around 20% of the 1.7 million money claims filed annually relate to private parking charges. This would suggest that the ongoing use of ANPR to file claims could exacerbate the effect of COVID-19 on the court system, creating a backlog of cases and financial burden around private parking.

Could do better – Consumers are reporting ongoing difficulties in contacting companies to discuss repayment issues on smaller-scale loans, such as product and vehicle financing, with many consumers seeking solutions such as voluntary vehicle termination. This is creating major uncertainty for debtors, and the potential for ongoing issues in the future.


What can be done by Policymakers?

Aside from the ongoing need for further guidance for employers from government around return to work, our recommendations focus on two areas which would help to avoid the creation of new problems in future.

Given the likely post-COVID tsunami of money claims, the courts need to be unclogged wherever possible.

We understand that HMCTS does not collect data on the subject of court cases, however, it is notable that following the 2015 Supreme Court decisions on the joined cases of Beavis v ParkingEye and Cavendish Square Holding v El Makdessi, money claims rose from a steady 1.2 million a year in 2015 to 1.8 million a year in 2018. The significance of this issue in our forum since that date, suggests that this decision was a significant factor in the commercialisation of private parking claims.

We would, therefore, recommend that HMCTS  begins by improving data labelling of cases in future, in order to provide clearer analysis of court claims, as well as embark on a project of back-labelling past data (potentially using natural language processing software).

We would also recommend the creation of a separate private parking tribunal system that would prevent cases being filed for low-value private parking claims, helping to remove the backlog of cases in the civil courts system and allow for a more proportionate response to private parking offences.

Finally, we recommend that the CMA should re-examine its decision making on small businesses and cash refunds, particularly in sectors hit hard by COVID-19. Ideally, solutions need to be found that are satisfactory to consumers, but which also avoid forcing the closure of SMEs.


Feedback

If you have any thoughts, comments or questions let us know on mail@hooktangaza.com

Beagles InsightBeagles Insight is a collaboration between LegalBeagles and Hook Tangaza, established to draw research and policy insights from the LegalBeagles forum.

LegalBeagles is the largest and longest running consumer legal forum in the world, and has been guided since its inception in 2007 by the principles of providing free and anonymous support, to consumers on a range of legal issues, through a community of dedicated and experienced individuals.

Hook Tangaza is an independent consulting, research and advisory house working at the heart of the legal services sector. Hook Tangaza uses evidence-based approaches to assist clients with managing and innovating through periods of change.