Impact on laws of other Member
States
110. Though we concentrated
our attention on the consequences of the Directive on the law
and practice in the United Kingdom we sought evidence as to the
implications for other Member States. A number of witnesses said
that the Directive might bring about improvements in the position
of consumers in other Member States. The Committee does not have
sufficient evidence to be able to say how great an impact the
Directive would have, and in particular how beneficial any change
might be, though examples were given to us as to how specific
rules of German and Italian law would be affected. Nor can we
assess the likelihood that such changes might come about as a
result of national action, without the compelling effect of the
Directive.
Costs etc
111. Various estimates
were given to the Committee as to the likely costs and the potential
detrimental effects of the Commission's proposal. No precise figures
on costs were supplied but some sectors, in particular the personal
computer industry, predicted more substantial increases than others.
Concern was expressed that small firms might bear a disproportionate
share of the costs. Fears were also expressed that the Directive
would have a negative impact on the competitiveness of Community-based
industry in markets where its competitors did not have to bear
the additional costs of the Directive. Witnesses also claimed
that the Directive would have adverse effects on the environment
and on employment (especially repair services). As has already
been said, the Committee supports the action of Member States
in requesting the Commission to undertake a detailed study into
the costs and implications of the Directive. This should help
to quantify the size of any problem and enable a better assessment
of the balance of advantage to be made. We also note that the
DTI is reviewing its own impact assessment in the light of developments.
Particular attention would, we are pleased to note, be paid to
the impact of the proposal on small firms.
The drafting of the Directive
112. Many of our witnesses
expressed concern about the drafting of the Directive. Clarity
and simplicity are important in all legislative texts but especially
so in measures such as consumer protection laws. Educating and
informing the consumer as to his rights can be greatly facilitated
by well-drafted legislation. We have already described the problems
witnesses had in understanding Article 3(1). That is an important
but not isolated example of the difficulties witnesses had in
understanding and evaluating the proposal. Almost every Article
of the Directive raised problems which could have been and should,
if the proposal is to succeed, be avoided by better drafting.
We describe some of these problems in Part 4 of this Report and
make suggestions where and how improvements might be made. Some
of the difficulty may be attributable to the Commission's attempts
to combine and adapt at one and the same time features of existing
Community directives, the civil law and the Vienna Sales Convention.
We do not underestimate the difficulty. The harmonisation of contract
and other areas of private law requires the most painstaking research
and analysis, extensive discussion with national experts and the
most careful preparation and synchronisation of the different
language texts.
Access to justice
113. Many factors may
serve to discourage consumers taking greater advantage of the
Single Market. These include distance and the difficulty of exercising
remedies. The right to demand a repair or replacement may be of
little value if in practice it is difficult or virtually impossible
to exercise. The Commission has brought forward a proposal for
a directive on access to justice. This would enable enforcement
bodies in one Member State to call on those in another to take
action against recalcitrant traders and if no action is taken
to pursue the case themselves in the other Member State. This
may prove a valuable weapon in the public enforcement of Community-based
consumer laws. It might, however, only indirectly benefit the
individual consumer. A number of witnesses drew attention to the
proposal in the Commission's Green Paper that there should be
some form of "network liability", under which a consumer
purchasing goods away from his home would, if the goods proved
to be defective, be able to return them to a local representative
of the manufacturer. That solution to the problem of returning
goods sat alongside a proposal under which liability was shared
by the seller and manufacturer and would not fit easily into the
present text. Without further examination we do not advocate "network
liability"-that is something which the Commission itself
appears to have rejected. We believe, however, that improving
a consumer's ability to obtain speedy and effective redress is
probably more important in practice than harmonising terms and
conditions of sale.
Implementation
114. The question of
implementation falls into two parts, substance and form. As to
the first, we share the concern expressed by the Consumers' Association
and other witnesses that the Directive should not be used to provide
the opportunity to change domestic law and practice to the detriment
of consumers in the United Kingdom. That, the DTI said, was not
the Government's intention. The Committee welcomes that statement
of the position. The United Kingdom has a mature and, we believe,
a generally satisfactory system of consumer protection. That belief
underpins our general conclusions on the present proposal. Further,
the detailed recommendations we make (many of which are set out
below in Part 4 of this Report) are based on the premise that
the best of the current domestic regime will be preserved.
115. Turning to the
form and manner of any implementation, it will be clear from the
description and analysis of the Directive given above that the
Directive does not provide a complete code for consumer sales.
As Professor Reynolds said, it does not provide a model Consumer
Sales Act. Nor does it claim to be exhaustive even in the areas
which it covers. For example, the crucial provision on choice
of remedies leaves to national law the question of how the remedies
are to be implemented. The detailed adaption of our domestic law
would require most thorough preparation and careful drafting.
We would be concerned if the Directive were simply copied out
and superimposed on existing legislation. The DTI mentioned some
of the limitations of implementation by secondary legislation
under the European Communities Act. If a proper integration of
the Directive required primary legislation, then we would urge
the Government to make the necessary resources and legislative
time available.
General Conclusion
116. The Committee does
not believe that a sufficient case for the Directive has been
established. In particular, in relation to the principle of subsidiarity,
we are not satisfied that the proposals pass the tests stipulated
in the Edinburgh Guidelines. As regards the position in the United
Kingdom, the Directive might give some marginal benefits for consumers
but these benefits would be outweighed by the disadvantages, especially
having regard to the recent changes to the Sale of Goods Act.
Whether the same conclusion would be reached in relation to other
Member States we are not in a position to say, although we recognise
that the Directive may give greater benefit to consumers in some
Member States. But we are not persuaded that these benefits, whether
in the United Kingdom or in other Member States, need to be conferred
by a Community instrument rather than national legislation. We
strongly support the steps taken by Member States to cause the
Commission to undertake a detailed study of the costs and implications
of the Directive. We do not rule out the possibility that an adequate
case could be made for a directive in the light of further evidence,
including the results of the study. As regards cross-border shopping
we believe that factors such as distance, language, cultural diversity
and practical difficulties in securing redress if things go wrong
will continue to be greater obstacles in practice than differences
in national legal sales regimes.
