If your business receives a written complaint from a consumer, you should think twice before simply tossing it aside.
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If your business receives a written complaint from a consumer, you should think twice before simply tossing it aside.
A timely investigation into the allegations and a reasonable response could save your business from being hit with a substantial judgment in a subsequent lawsuit.
Massachusetts General Laws Chapter 93A, known as the Massachusetts Consumer Protection Act, declares unfair methods of competition and unfair or deceptive acts or practices in the conduct of any trade or commerce as illegal.
The law does not outline specific acts as violations.
Each case is judged on its own merits, influenced by how prior court decisions came out.
The Massachusetts attorney general is authorized to make rules and regulations interpreting the law.
It is important for businesses to know the basic workings of the law and how to mitigate their risk once a consumer has claimed an injury under Chapter 93A (injury in this context means an invasion of a consumer’s legal right).
The law requires the consumer to make a written demand for relief on the business at least 30 days prior to filing a lawsuit as a way to encourage pre-suit resolutions.
The written demand must identify the consumer and reasonably describe the unfair or deceptive act or practice and the injury suffered as a result of the act or practice.
It must define the injury in a manner to provide the business with an opportunity to review the facts and the law in order to determine whether to make a reasonable offer of settlement.
A timely response to the demand can be very important.
If, within 30 days of the demand, the business makes a written offer of settlement which is rejected by the consumer, the business may use that offer in a subsequent lawsuit to limit any recovery to the offer amount if the court finds the offer was reasonable in relation to the injury.
Otherwise, if the consumer prevails, the court can multiply the damages by up to three times if 1) the act or practice is found to be a willful or knowing violation of the law, or (2) the refusal to make a reasonable settlement offer was made in bad faith with knowledge or reason to know that the act or practice violated the law.
In addition, the court is required to award a successful consumer his reasonable attorney’s fees and costs associated with the lawsuit.
However, if the consumer rejects the settlement offer and the court determines the offer was reasonable, the award of costs and fees will be limited to those incurred by the consumer prior to his rejection.
Therefore, that seemingly annoying letter could lead to a liability entirely disproportionate to the consumer’s actual injury, particularly where the business could be responsible for the consumer’s attorney’s fees.
Thus, taking the time to evaluate the claim and making a reasonable offer of settlement within 30 days of the demand could be time and money well spent for your business.
Jared A. Fiore is an attorney at Worcester law firm Bowditch & Dewey, LLP. Reach him at jfiore@bowditch.com.
