EU Consumer Rights Directive: getting it right - European Union Committee Contents


EU Consumer Rights Directive: getting it right

CHAPTER 1: Introduction

Background

1.  The Commission's proposal for a Consumer Rights Directive, [1] published on 8 October 2008, marked the culmination of the review of existing EU consumer law, known as the "consumer acquis". Launched in 2004 as part of a broader European Contract law agenda[2] and developed in the Green Paper on the Review of the Consumer Acquis in 2007,[3] the review aimed to simplify and complete the existing regulatory framework. It was hoped that the end product would be a real "business-to-consumer" internal market, striking the right balance between a high level of consumer protection and the competitiveness of enterprises. The consumer acquis was defined in the Green Paper as encompassing eight Directives:[4] Sale of Consumer Goods and Guarantees; Unfair Contract Terms; Distance Selling; Doorstep Selling; Price Indication; Injunctions; Package Travel; and Timeshare.[5]

The Commission's proposal

2.  The draft Directive is summarised in Box 1. The Commission proposes that the Directives on Doorstep Selling, Unfair Contract Terms, Distance Selling and Sale of Consumer Goods and Guarantees be merged into a single "horizontal" directive that regulates the common aspects in a systematic fashion, simplifying and updating the existing rules, removing inconsistencies and closing gaps. The Commission intends that these changes should enhance consumer confidence and reduce business reluctance to trade across borders.[6]
BOX 1

Summary of the Commission's proposal

Full harmonisation: The proposal moves away from the minimum harmonisation approach followed in the four existing Directives (i.e. Member States may maintain or adopt stricter national rules than those laid down in the Directive) to embrace a full harmonisation approach (i.e. Member States cannot maintain or adopt provisions diverging from those laid down in the Directive). (See chapter three)

Scope: The proposed Directive would apply to sales and service contracts concluded between the trader and consumers, although it would have limited application to financial service contracts. Chapter 4 (sales contracts), however, applies only to contracts for the sale of goods concluded between a trader and a consumer and to the goods element of mixed contracts comprising both goods and a service. Digital products and pure services are excluded from the scope of the proposal. (See chapter four)

Consumer information: Traders are required to provide the consumer with certain types of information, such as arrangements for delivery, if necessary and if the information is not already apparent from the context. Remedies for failing to provide the information are a matter for national law. (See chapter five)

The right of withdrawal for distance and off-premises contracts: Consumers have up to 14 calendar days to withdraw from such contracts.[7] The trader must be informed of the decision to withdraw on a durable medium in either the consumer's own words or using a standard withdrawal form. (See chapter six)

Non-conformity of goods: The proposal includes provisions to cover instances where the goods are not in conformity with the contract and the lack of conformity becomes apparent within two years. There is a two-tier remedies regime. In the first instance, repair or replacement is envisaged, and in contrast to the existing acquis, the trader rather than the consumer has the right to choose between those two remedies. The consumer may be able to go on and seek price reduction or rescission (termination). The right to damages is also mentioned. The consumer must notify the trader of any lack of conformity within two months. (See chapter seven)

Unfair contract terms: A "black list" of terms always considered to be unfair and a "grey list" of terms deemed unfair unless the trader proves otherwise are proposed. (See chapter eight)

3.  The Commission's proposal is the subject of discussions in Brussels among Member States and in the European Parliament. Before rising for the election, the European Parliament's Committee on Internal Market and Consumer Protection produced a Working Document on the proposal,[8] as did the Parliament's Legal Affairs Committee.[9] Work on the proposal will resume once those Committees have been reappointed. A likely timetable for agreement is not known.

Our inquiry

4.  Our inquiry had a number of aims. First, we sought to establish whether witnesses accepted the Commission's justifications for the legislation. Second, we considered whether full harmonisation would be likely to deliver the desired result. Third, we examined some of the specific policy proposals with a view to assessing their viability. Finally, we sought to highlight some of the issues and tensions that might be considered by decision makers in the months to come.

5.  We are aware that the development of EU consumer policy is closely intertwined with a parallel discussion on the evolution of contract law in the EU. The 2004 Communication (see paragraph 1) pursued the idea that a "Common Frame of Reference" (CFR) for contract law terminology might be developed to improve consistency of contract law across the EU. There is currently a draft "academic" CFR and the Commission is due to publish its own view by the end of 2009. The draft CFR was the subject of a recent Report by this Committee.[10] We heard that the Commission had not waited for the CFR to be completed before reforming the consumer acquis and, although drafts were available, the Commission's approach had been to view it as "an authoritative but non-binding statement".[11] While our inquiry on the draft Directive did not focus on the CFR, we have taken it into account and it is referred to in the course of the report.

6.  In the course of our inquiry, it has become clear that swift agreement on the proposal is unlikely and that significant changes to the draft may be required before adoption is possible. Against that background, we have drawn a number of conclusions and made some recommendations but we will wish to re-examine the proposal should its content change significantly in the course of negotiations. One possible development in July 2009, which may affect those negotiations and which relates to some of our conclusions and recommendations, is the publication by the Commission of information comparing existing legislation across Member States. We will therefore retain the proposal under scrutiny.

7.  The Members of our Social Policy and Consumer Affairs Sub-Committee (Sub-Committee G) who conducted the inquiry are listed in Appendix 1.

8.  We are most grateful for the written and oral evidence that we received for our inquiry; the witnesses who provided it are listed in Appendix 2. In particular, we thank those witnesses who gave evidence in person. The Call for Evidence we issued is shown in Appendix 3, and the evidence we received in response is printed in a companion volume to this report.

9.  We acknowledge with thanks the expertise and hard work of our Specialist Adviser for the inquiry—Professor Geraint Howells[12], Professor of Law at the University of Manchester.

10.  We make this report to the House for debate and retain the proposal under scrutiny.


1   COM(2008) 614, 8.10.2008, Proposal for a Directive on consumer rights Back

2   COM(2004) 651, 11.10.2004 European Contract Law and the revision of the acquis: the way forward Back

3   COM(2006) 744, 8.2.2007 Green Paper on the Review of the Consumer Acquis Back

4   See Appendix 4 for references Back

5   The Timeshare Directive was revised in 2008 and was the subject of a Report by this Committee: 3rd Report (2007-08): Protecting the consumers of timeshare products (HL 18) Back

6   COM(2008) 614 p2  Back

7   For a definition of these contracts, see Box 5 in Chapter 6. Back

8   DT\782960EN.doc PE 423.778v02-00 4.5.2009 Back

9   DT\780948EN.doc PE 423.804v01-00 15.4.2009  Back

10   12th Report (2008-09): Draft Common Frame of Reference (HL 95)  Back

11   ibid. (paragraph 67)  Back

12   Professor Howells is a barrister, Law Professor, member of the Acquis Group and has done work on the CLEF (Consumer Law Enforcement Forum). Back


 
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