reform of consumer contract law edinburgh2010

REFORM OF UK CONSUMER CONTRACT LAW : 

REFORM OF UK CONSUMER CONTRACT LAW GERAINT HOWELLS Professor of Commercial Law, Manchester University Barrister Gough Square Chambers

Influences : 

Influences Common Frame of Reference Consumer Rights Directive Digital products Law Commission Reform of Unfair Terms Unfair Commercial Practices Directive and BIS desire to harmonise with contract law Manchester BIS study on Consolidation of the law on the sale and supply of goods and services to consumers.

Common Frame of Reference : 

Common Frame of Reference European contract law and the revision of the acquis: the way forward? COM (2004) 651 final What is the CFR? “28th” system, optional instrument, toolbox Continental Style and anglo-saxon form? Modernisation of civil code (cf Netherlands/Germany/France)

Common Frame of Reference : 

Common Frame of Reference From academic project (COPECL – Study Group/Acquis Group) to political reality? DG CIVIL JUSTICE (Commissioner Reding) A threat to domination of legal London?

OUTLINE (Academic) CFR : 

OUTLINE (Academic) CFR Very broad – 10 books Book II – Contracts and other juridical acts Ch 3(1): Information duties Ch 3(4): Unsolicited goods and services Ch. 5: Right of withdrawal Ch. 7: Grounds of invalidity (mistake, misrepresentation, fraud, unfair exploitation) Ch 9(4) Unfair terms

OUTLINE (Academic) CFR : 

OUTLINE (Academic) CFR Book III – Obligations and corresponding rights Ch 1 (iii) Good faith and fair dealing Ch 1 (IV) Co-operation Ch. 3 Remedies for non-performance

OUTLINE (Academic) CFR : 

OUTLINE (Academic) CFR Book IV A Sales Book IV B Lease of Goods Book IV C Services Book 6 – 3:204 –defective products

European consumer law or European private law? : 

European consumer law or European private law? Political CFR will concentrate on contract law Recently DG SANCO has concentrated on consumer law harmonisation Proposed Consumer Rights Directive: COM(2008) 614 final But CFR not prominent

PROPOSED CONSUMER RIGHTS DIRECTIVE COM(2008) 614 final : 

PROPOSED CONSUMER RIGHTS DIRECTIVE COM(2008) 614 final Full harmonisation? Targeted full harmonisation? Increasingly Commissioner Reding talks of full harmonisation restricted to distance and online contracts. Will consumers want to disclaim status? Lack of reference so far as to CFR

Consumer Rights Directive : 

Consumer Rights Directive Information General information requirements if not apparent from context Not liable for additional charges not mentioned otherwise sanctions are for national law Intermediaries Specific rules for off-premises and distance

Consumer Rights Directive : 

Consumer Rights Directive Right of withdrawal distance and off-premises 14 days off-premises from when consumer signed order distance from material possession for goods and conclusion of contract for services 3 months after performance if no notice of right of withdrawal notice in durable medium of using standard form consumer liable for diminished value if excessive handling.

Consumer Rights Directive : 

Consumer Rights Directive Sale of Goods - hire/services/digital products - delivery 30 days - risk with acquiring material possession - hierarchy mandatory (right to reject?) - trader has choice between repair and replacement - damages - two year period - notify defects within two months Unfair terms Black list

Digital goods : 

Digital goods Separate reports for EU and BIS Apply (modified) sales rules or create special regime?

Unfair Terms Law Reform : 

Unfair Terms Law Reform Law Commission, Unfair Terms in Consumer Contracts LC No 298 New combined Bill would for consumers: Extend to all terms covered by regs no just exclusion clauses Include negotiated clauses Holds basic terms to be ineffective i.e. limitations of liability for death and personal injury and exclusions of basis quality standards Require all terms to be fair and reasonable Place burden of proof on businesses.

Unfair Commercial Practices Directive : 

Unfair Commercial Practices Directive Maximal harmonisation General unfairness clause linked to test of average consumer some consideration of vulnerable consumer Misleading Aggressive Blacklist

Structure of UCPD : 

Structure of UCPD General clause (art.5) Misleading acts (art.6) and omissions (art.7) Aggressive (art.8) Blacklist (annex 1)

Unfair practices (art.5) : 

Unfair practices (art.5) Contrary to professional diligence Materially distorts economic behaviour of the average consumer (or average member of targeted group) Materially distorts = impairs ability to make informed choice causing him to take transactional decision) Foreseeable vulnerability based on mental or physical infirmity, age or credulity Misleading Aggressive

Misleading (art. 6) : 

Misleading (art. 6) False untruthful or is likely to deceive average consumer (even if factually correct) Causing him to take transactional decision he would not have taken With regard to specific factors

Misleading omissions (Art.7) : 

Misleading omissions (Art.7) Omits information needed by average consumer Transparency requirements List of information material with respect to invitation to purchase

Aggressive : 

Aggressive Harassment, coercion or undue influence Impairs freedom of choice Causing consumer to take a transactional decision he would not have taken otherwise

A Private Right of Redress? : 

A Private Right of Redress? Irish Consumer Protection Act 2007 LAW COM Preliminary Advice on A Private Right of Redress for Unfair Commercial Practices? to BERR Nov 2008 New LAW COM project on Misrepresentation and Unfair Commercial Practices Misrepresentation (omissions) Aggressive practices (duress/undue influence) Unfair practices with no potential remedy under existing law

Manchester BIS StudyConsolidation of the law on the sale and supply of goods and services to consumers : 

Manchester BIS StudyConsolidation of the law on the sale and supply of goods and services to consumers Simplifying Streamlining Rationalising and Simplifying Terminology

Manchester BIS StudySimplifying : 

Manchester BIS StudySimplifying Do different supply transactions need separate provisions? Can implied terms/conformity be extended to all supplies of goods? In “mixed” contracts how should service quality be regulated And in “pure” service contracts? What should remedies be and should they be same for all transactions?

Manchester BIS StudyStreamlining : 

Manchester BIS StudyStreamlining Where are special rules needed for B2C transaction? Can any general rules be simplified for consumers (goods in bulk?)?

Manchester BIS StudyRationalising and Simplifying Terminology : 

Manchester BIS StudyRationalising and Simplifying Terminology Conditions, warranties, conformity with the contract Acceptance Passing of property Overclassification – specific/unascertained/ existing/ future

The Final Outcome? : 

The Final Outcome? Comprehensive Consumer Contract Law (not credit). Simpler and easier to understand. Influenced by EU law but also by UK traditions. More distinct from general contract law cf CFR? Will it happen?