The Consumer Guarantees (Right to Repair) Amendment Bill passed its first reading before parliament this week. The Bill will impose tougher obligations on manufacturers by amending the Consumer Guarantees Act 1993 (CGA) to require manufacturers to make repair parts, facilities and information, available to consumers.

What is the proposed change?

Manufacturers should be aware that their obligations to comply with the CGA could be changing.

Currently, under section 42 of the CGA, manufacturers can opt out of the requirement to provide repair facilities and parts to consumers, provided the consumer is notified that repairs will not be available at the time the goods are supplied.

However, under the Bill, the opt out provision will be removed.  The statutory guarantee to provide repair parts and facilities will be as follows:

• Where goods are first supplied to a consumer in New Zealand the manufacturer has a statutory guarantee to take reasonable action to ensure that repair parts and repair facilities for the goods are reasonably available for a reasonable period after the goods are supplied.
• The guarantee has been expanded to provide that manufacturers must also provide the consumer, if requested, with the most recent version of any information, spare parts, software and other tools that manufacturer uses for diagnosing, maintaining or repairing the goods, no later than 20 working days after the request.
• Consumers now have the option to ask a supplier to repair defective goods, rather than replacing the goods, with the supplier being required to repair the goods within a reasonable time.  If the supplier is unable to repair the goods the consumer may choose to accept replacement, have the good repaired elsewhere and obtain the costs of repair, or reject the goods.

These proposed changes are in line with developments in the UK and Australia, and have been welcomed by consumer interest groups. However, the Bill is already facing debate with some suggesting that the new provisions would better protect consumers if they were inserted into the Fair Trading Act 1986, and be under the scrutiny of the Commerce Commission. As it stands, the Commerce Commission will not be able to take action against manufacturers who do not comply with the new obligations. The only remedy consumers would have would be to take manufacturers to the Disputes Tribunal or courts.

The explanatory note to the Bill highlights that the proposed reform aims to foster a “circular resource economy”, which is a step towards mitigating climate change and protect biodiversity. The Bill also notes that allowing consumers to repair rather than replace products reduces household expenses at a time when the cost of living is particularly high.

What does this mean for you?

If you are a manufacturer of goods, even if you are not located in New Zealand (see more on this here), the proposed amendments to the CGA will increase your obligations to provide consumers with repairs to products. Before supplying goods into New Zealand, manufacturers will need to ensure, as far as is reasonable, that facilities and parts for repairing any faulty goods will be reasonably available for a reasonable period of time. The Bill doesn’t define what will be considered reasonable, but this is likely to depend on all relevant circumstances of the supply, including the nature and price of the goods.

The Bill makes clear that these proposed amendments will only apply to goods supplied after the Bill comes into force, so manufacturers and suppliers do not have to be concerned about goods they have already supplied.

We have sympathy for the argument that including the Bill’s provisions in the Fair Trading Act could create enforcement powers against repeat offenders and help develop guidance for some of the vaguer provisions of the Bill. However, in our view, the Bill fits neatly alongside the other remedies in the CGA, which has provided strong remedies to consumers for over 30 years, without the need for regulatory oversight. Consumers can seek the assistance of the Disputes Tribunal and District Court to enforce the provisions of the CGA, allowing the regulator to focus on product safety and consumer deception.

The Bill has been referred to the Economic Development, Science and Innovation Committee, and we will report further on any recommended changes to the Bill after that stage.

Get in touch

Please get in touch with one of our experts if you have questions on the proposed amendments.