Weddings and uncertainty: Unpicking the CMA guidance

Covid-19 had impacted all of us, but weddings and the wedding supply chain have been some of the most affected. For a sector that held over 250,000 weddings in 2019 and generated some £14.7bn, the pandemic has been apocalyptic. 

We know from members with wedding venues that discussions continue about cancellations and refunds for weddings that can’t go ahead at all or can’t go ahead as planned because of lockdown or restrictions on the number of people who are permitted to attend.  

The Competition and Markets Authority (CMA) issued general guidance about cancellations and consumer rights to a refund in April 2020, and it was updated in August. In September, it issued guidance specifically about wedding services.

The CMA says that the guidance is in response to “clear and urgent problems being experienced in this industry sector”. However, the guidance is causing concern as it seems to have given rise to misunderstandings.

Let’s be straight about this. The CMA guidance is just that – it is the CMA’s view of the legal position and is not a statement of the law. The CMA makes this very clear when it says that “[u]ltimately only a court can decide how the law applies in each case,” and it is for the judge hearing the claim to make that decision. 

The law is contained in the Law Reform (Frustrated Contracts) Act 1943 (a piece of wartime legislation) and in more modern consumer legislation, the Consumer Rights Act 2015. The 1943 Act deals with contracts that have become “impossible” to perform or are “otherwise frustrated”.  Essentially, it says that the parties are discharged from further performance and that a party who has paid money can recover it, subject to expenses that the other party has incurred. Among other things, the Consumer Rights Act 2015 covers unfair contract terms in consumer contracts, which cannot be enforced – one of the main issues here being unfair terms relating to refunds on cancellation. 

In the meantime, the Supreme Court has decided the business interruption insurance case and some members, who were previously turned down, may be able to claim under their business interruption insurance if they haven’t already done so.  

Our advice remains that members who are affected should try and negotiate a settlement or agreement with the couple, to avoid reputational damage but protect cashflow.