One for the 'legal eagles'

[RayS]

Over the years there has been considerable and useful interchange about rights concerning defective caravans, SOGA etc.
Any views about this one ?
A new caravan is found to have internal defects requiring rectification which the supplying dealer carries out. However, by their nature the repairs are obvious to any future trade or discerning private buyer and are such that any reasonable owner whould have to disclose them anyway.

Should this owner, for whatever reason, whish or have to sell or trade in this caravan say after owning it from new at the end of the first year, it is very likely that he/she would recieve a lesser price than for an otherwise identical caravan which had not been subject to the same repair/s and thus would have effectively lost money through no fault or their own (or indeed fault of the dealer if the repair was caused by faulty manufacture).

In these circumstances, how can the owner recover this loss ? Ideally, from the manufacturer but of course his/her contract is with the dealer, not the manufacturer, and so this would seem to be the first line of approach. Obviously the dealer is likely to refute any liability in this respect.

Having had the question posed, i have tried researching SOGA etc and also on-line advice services but with no great result. Mostly a reiteration of the SOGA and associated legislation and rights to reject - basically only valid for the first six months.

Anyone have any ideas on (a) whether this is a reasonable arguement or whether just has to be written off to experience and (b0 any legislation, case law, or method of approach which might be useful.

Thanks

 

[Dustydog]

Well Ray
This is a minefield. This issue has arisen many times before and each case is different.
However the principle that a "diminution in market value" has arisen on most cases proves there is common ground.
Some people have sought some financial compensation for dimv from the dealer; others have sought a written letter of indemnity promising no reduction in value will be made for the repair as and when a px takes place. No use if you sell privately. Others are quite happy where the repair involves replacement with new fittings so still looks as good as new.

Internal repairs should be possible on a new caravan with new replacements rather than repairs????

If you are a member of the CC or C&CC clubs they do have a free Legal Advice help line
CC is at www.caravanclub.co.uk/.../can-we-help/safety-and-security/legal-helpline - 44k

 

[Grahamh]

I thought that onder the SOGA you were not forced to accept a repair; you could insist on a full refund. If you accept a repair then you no longer have that right should a further fault occur.

 

[ProfJohnL]

Hello Ray,

Your sympathy towards the dealer is unfounded. When the dealer set up in business they should have fully understood their legal responsibilities when they trade in the retail field. This is enshrined in SoGA, the basics of which you understand.

Essentially the retailers responsibility is to sell 'goods as described' and in the case of new goods they should be 'free from defects and of satisfactory quality'

If new goods sold are faulty, they have patently failed in their legal duty. Even though the manufacture may have caused the fault, the dealer has failed to ensure the goods they sell are satisfactory, so they are equally at fault, but because of the contractual situation you only have a claim against the seller.

With regards to your right to reject faulty goods, you have that right for any time up to the theoretical limit of 6 years. However in practice for good and fair reasons access to that facility effectively reduces over the 6 years due to age and wear and tare.

Its important to understand that SoGA is about fairness and neither the customer or the retailer should be able to have any advantageous benefit from a resolution.

If you opt for a repair, again you have the right to expect the repair will not diminish the value of the product compared to one of the same age without the fault.

If a repair fails to recover the condition and value of a product you have a continuing loss, which is contrary to the ethos of SoGA. In theory a repair that does not reinstate the value of the product, the repair its self is unsatisfactory in its own right and thus not SoGA compliant.

To answer Graham's point, agreeing to a repair does not diminish your rights, but it does complicate the issue and its difficult to offer specific advice without access to the details. It would be wise to seek professional advice, But I am of the opinion that assuming you are happy with the functional effectiveness of the repair then compensation should be a reasonable solution to offset any loss when you sell the caravan.

If you were to push and were successful full refund, as has happened to another forum contributor, the supplier could invoice (rent) you for the use you have had of the caravan.

 

[Surfer]

I thought that onder the SOGA you were not forced to accept a repair; you could insist on a full refund. If you accept a repair then you no longer have that right should a further fault occur.

Under SOGA you have to give the retailer the opportunity to repair or replace first before demanding a refund.

 

[JonnyG]

New caravan? dealer repaired? repairs are Obvious? dealer hasnt repaired it properly...back to dealer.......maybe photos of how the inside should look when new and how it looks after the repair might be worth having..

 

[RayS]

Thanks all for your views and keep them coming.
A few notes in reply.
The owner does not want to reject the caravan, They just (!) want it to be a much or as little on the market as is the repairs had not taken place.
I have taken advice from the CC legal help line and the CAB. Both have largely re-iterated the standard SOGA stuff and neither has directly answered the matter of reduced value of asset after repair.
The idea of returning to a dealer for further repair when the first one partially failed is not appealing.
My latest thought is to try to obtain on-line valuations - two - in which the first would declare the condition as 'excellent' and the second as 'good' and see what the difference is. How does this sound and where would I obtain such valuations ?
The idea of getting professional advice has been tried - see above - but where to go for anyhthing which may be better

 

[ProfJohnL]

Hello again Ray,

I don't believe your suggested method of trying to establish the loss in value of the caravan is adequate.

Whilst an owner may consider a caravan to be in generally excellent condition (With the exception of the repair) a professional valuer may disagree. Equally comparing the repaired caravan to a 'good' example may also not be supported by a valuer.

The loss of value is limited to the difference the caravan would achieve compared to the average value of the same model (same age and usage) without the fault, and the difference in value would have to be attributed to the condition of the repairs.

I have to observe that whilst there seems to be a well defined case here, the practicalities of pursuing a loss of value action become increasingly difficult with a products increasing age. The value of a product is only firmly establishes when it is subject to a transaction. When its new its price is virtually fixed, but as a product ages the variance between top and bottom values also increases. So other contributing factors may arise which muddy the clarity of the situation.

 

[Raywood]

If the dealer cannot repair the fault to the same standard as the original and it will affect the price at a trade in or private sale then you should have a claim under SOGA for compensation. This would have to be based on the loss you would suffer on resale and to show that you would need the expert opinion of a suitable alternative retailer which might be easier said than done.
You might be able to return the caravan but this would depend on how long you had had it and what the defect was but is a far more difficult one to go with and quite risky.
If the caravan was bought on HP or wholly or partialy with a credit card then you could also have a claim against the bank. Not sure how this would work with this kind of problem as I have not met it before.
Case law is very sparse on this as most cases are settled out of court and what do go that far are mainly small claims cases which are usually not reported. Remember however that you do not need a solicitor and your costs should be minimal but the other side will need a solicitor at probably well over £200 an hour. Economics call for them to settle quickly and that happens in most cases.

 

[ProfJohnL]

........... Remember however that you do not need a solicitor and your costs should be minimal but the other side will need a solicitor at probably well over £200 an hour. Economics call for them to settle quickly and that happens in most cases.

To clarify Raywoods point. For small claims (i.e less thsn £10,000) then that is teh case as it can be dealt with in the "Small Claims Courts" But Caravans even at 12 to 18 months thier value may exceed the small claims courts limit.

Given the aparent complexity of the case, I would still recomemnd you seek guidenace from a proffesional, That does not mean you have to use them in court if it goes that far, but to have the consideration of a properly trained legal profressional may steer you through the case and give you an edge with your submissions.

 

[Raywood]

I accept that the loss of value is a difficult one but I think my approach is correct. The loss in value would have to be for that caravan bearing in mind its condition which might be a problem. The actual value of the loss is at the time it occurs which to me would be when the repair revealed a problem. The courts would not try to fix some future date of sale as the date of loss as not only is there a loss on sale but you also have to live with the problem so you would probably find one balances out the other.
I take the point about the small claims limit but I doubt that a claim for diminution in value would be anywhere near £10,000. It could be relevant though on cases where you repudiated the sale and some advice from a solicitor might be useful but small claims cases are very claimant friendly. A lot depends on what you feel able to handle and the value of the claim.

 

[ProfJohnL]

Hello Ray,
I agree with your approach to the valuation, as you say the courts wont get involved with potential losses only losses that have arisen.
The difficulty with assessing real losses in these situations is getting valuations that are acceptable to the courts. This is where the guidance of a professional legal mind would be of real benefit.
I made the point about the small claims limits, because in some cases the claiment might be considering a rejection, in which case the value of the case could easily exceed the SCC limit.

 

[RayS]

Sadly, I have to agree that it is likely to be too difficult to establish any 'worsenment' value (my term in response to the industry term 'betterment' which they are so keen to avoid giving) that it is unlikely to be worth the effort, particularly given the general non engineering and in our sense technical background of the legal profession and so called specialists.
So I guess one just has to grin and bear it, much though it rankles. If keeping a van for a number of years the effect will probably not be very noticable, but an executors sale of a nearly new van will be a different matter.
I find it strange that SOGA - so detailed in some respects - is silent in this case.
I also take the point that the dealer should know full well of the liabilities of this sort of trading and should, presumably, factor this risk into their overall business plan. However, it is sometimes a little difficult to be absolutely hard about this with a small dealer where the staff become known personally and who also feel let down by the maker.

Many years ago I was involved with the establishment of BS 5750 quality standard, but thought and still think it and the subsequent ISO 9000 series sucessors fail in that they concentrate on the front end and not the result in construction, and that there is no easy route to complain to the certifying authorities to re-visit or if necessary remove the certification from the supplier.
The current maker to dealer to customer route may be fine for domestic appliances but has many shortcomings for low volume high value items such as caravans, which by their nature may not be used sufficiently within the limited time-scale specified by SOGA to reveal the inherent defects due to poor manufacture and quality control thereof.
I am of the school which believes that quality assurance and quality control are not the same thing.

 

[ProfJohnL]

Hello Ray, I have to agree to a large extent about the mechanical and physical understanding of many of the front end legal professionals, but I have a considerable respect for some of our legal barristers and Lordships who have at times sat on some quite complex industrial cases, and have at times produces some incredibly lucid and accurate arguments. I have to disagree with you about SoGA's value in the case you present. And i guess its a matter of perspective. I fully understand the feelings of a caravan owner who has suffered as you describe. Quite simply if a repair does not return a product back the state it would have been if the fault had not occurred SoGA has not been satisfied. As SoGA relates to the sale of contract, the seller is responsible. In this case the quality of the repair is non compliant, and thus the repairer has failed in their contractual duty. Another perspective is the repair is structurally sound and that makes the caravan usable, BUT the owner accepts it in the knowledge it will affect its value. However that value of any product can only be accurately established when its forms part of a transaction. Up util that point valuations are only estimates. The fact is that if a repair is unsatisfactory then the matter should be taken up with the repairer at the time as soon as it becomes apparent. This ties into the ethos of both BS5750 and ISO 9000 et al, Customer satisfaction is one of the eight key elements. To make these model standards functional across all types of business they cannot focus only on a narrow processes such as manufacturing, as that would exclude information services from their scope. The whole principle is that quality improvement cannot just be left to one department in an organisation, it has to be a whole company commitment and led from the top. The view of these standards is that manufacturing or other specific outputs will improve if the principle of continual improvement is enshrined in the work ethic of every company employee.
I believe the executor of an estate is required to meet all legal provisions AND represent the best interests of the estate. So the executor has the same rights to SoGA as the deceased.

 

[Dustydog]

The whole principle is that quality improvement cannot just be left to one department in an organisation, it has to be a whole company commitment and led from the top. The view of these standards is that manufacturing or other specific outputs will improve if the principle of continual improvement is enshrined in the work ethic of every company employee.
It amazes me that here in the 21st century caravan manufacturers do not openly subscribe to the Prof's words of wisdom.
As long as employees are paid on a piece work basis shoody workmanship will not be eradicated.

Last week two caravanners at my storage have suffered water ingress, not from the floods but from failed roof / window joints . One is a two year old Bailey Unicorn the other a new Swift Challenger. So much for Alu -Tech and SMART ?? .

 

[otherclive]

" I believe the executor of an estate is required to meet all legal provisions AND represent the best interests of the estate. So the executor has the same rights to SoGA as the deceased. "
Given all of the various issues involved with winding up an estate I find it hard to believe that the Executor would have the time, or inclination, to try and obtain further redress on this one. As others have said the perceived difference in value is only likley to materialise at the point of a future sale. and the value will diminish with time as the van ages. Practically having £x thousand in the bank is more of a driver than spending a lot of effort and time trying to obtain £x+500 thousand.

 

[ProfJohnL]

Hello Clove, I do agree that in this case the likely outcome would not be worth the effort, but the principle is sound and in other circumstances would be worth pursuing.

 

[Raywood]

I underdstand Rays position and to decide if pursuing a claim is worthwhile depends on just what difference the repair would make to the value, if you feel you want to risk ruining any relationship with the dealer and how you feel about your treatment. We do not have this information so cannot judge if he should go ahead but on the face of it the claim cannot fail but I cannot see it being very large in most cases.

The level of expert evidence needed will depend on the value of the claim, for a modest claim a written value from an established dealer would probably be enough. This should be put to the other side to see if they contest it and if they did they would have to provide evidence of equal status or better and at that point you would normally expect a compromise deal. Only if the loss was running well over £1,000 would you nomarly expect to need the witnesses in court otherwise the opinions should simply be written with the valuers credentials and experience detailed although this is not a hard and fixed rule and a judge could ask for them to be present on a smaller claim or just take written reports on a larger one.

The point raised about an executor is an interesting one. The executor does have to take all reasonable action to recover money owing and should establish the cost of pursuing the claim and the risks involved. Where you are executor if it was not straightforward you would normally put this to the beneficiaries and see if they want to proceed, as there is usually only a few of them this is reasonably straightforward. He would normally then go with the majority view knowing he had covered his back.

Not sure why but I cannot seem to get paragraphs in these days.