Thursday, March 18, 2010

Consumer Rights Directive might not feature UK right to reject, says Reding

OUT-LAW News, 15/03/2010
The European Commissioner's consumer law chief has promised a 'breakthrough' on plans for a new Europe-wide consumer law but has said that existing UK rights cannot be safeguarded.

The Commission's proposed Consumer Rights Directive faced opposition in the UK because the process of harmonising law across the EU actually reduced UK consumers' rights to reject goods.

Vivian Reding, EU Commissioner for Justice, Fundamental Rights and Citizenship, who is responsible for consumer law, said that she plans to resurrect the Directive.

"This legislation needs to be the cornerstone for consumer protection in the Single Market in the coming years," she said. "It is therefore my priority to work with the European Parliament and Member State governments to make a breakthrough on this important legislation. The proposed law must balance businesses' need for legal certainty with a guarantee for the highest level of consumer protection."

eding said that while she would address the problem of an erosion of consumer rights in some countries, such as the UK, it may not be possible to protect existing rights, and that the remedies for defective goods that UK consumers are guaranteed might not form a part of an eventual EU-wide law.

"The relationship between the consumer remedies and the national contract law remedies is not always clear," she said. "In the UK, there is a right to reject a product. In France, consumers can have a guarantee for hidden defects in a product. These are typical examples. I do not yet know whether the prospect of achieving full harmonisation of all the remedies for defective products is realistic."

"Full harmonisation of these cross-border rights means that EU countries may have to adjust some national rules that go further than the proposal," she said. "This has led to concerns among Member States, consumer organisations and European Parliament members that the level of protection would decline and that consumers would be worse off. There are also concerns that full harmonisation makes consumer protection inflexible and curtails the national legislators' ability to react quickly and appropriately to new market developments."

"These are legitimate concerns, and I will address them. In my view, consistently basing the proposal on the most stringent rules that already exist in the 27 Member States is not necessarily the most proportionate way to help consumers," she said.
Reding said that one way to address the complex issues would be to introduce two-tier regulation, differentiating between different kinds of consumer sales.

"I am … going to look at whether the harmonisation in the Commission's 2008 proposal is sufficiently targeted towards those issues that have the most benefit from a Single Market point of view," she said. "A possibility could be to go for fully harmonised rules on distance contracts and allow diverging national rules for face-to-face contracts. Workable fully harmonised rules for the online world could then pave the way for more harmonisation for off-line contracts at a later stage."

The Directive which Reding wants to put back on the political negotiating table was controversial in the UK and is still opposed by UK consumer rights body Consumer Focus.

"Hopefully it won’t progress in anything like its current form," Lola Bello, senior policy advocate at Consumer Focus, said last month. "Along with other nations with strong consumer rights, the UK has been lobbying hard for changes to this Directive."

Government legal reform bodies the Law Commission and the Scottish Law Commission were asked to examine the issue last year and advised the Government to oppose the abolition of the right to reject.

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