Transcript European Union

Raymond O’ Rourke,
Consumer Lawyer
Visiting Professor University of Ulster, Northern Ireland
The transposition of Directive 1999/44/EU and Directive 2011/83/EU by
the Law on Consumer Protection of 2010: review and assessment
Belgrade
20-21 March 2013
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1
Introduction
EU Internal Market – wants to create situation where consumers can
freely purchase good across borders & have similar consumer
protections
Consumer Purchases – consist of numerous different types of Legal
Contracts – ‘offer’ and ‘acceptance’ – issues of finance/payment –
advertising/marketing – information available to consumers –
guarantees – possibility of the exchange of goods soon after the
contract is completed
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Safeguarding Consumers Interests
When regulating to protect Consumers Interests the EU has regulated
two main aspects of the Contract.
1.
2.
Market Transparency – it has introduced laws demanding that
considerable mandatory information & periods within which they
can withdraw are available to the consumer before they purchase a
product in order that they can made an ‘informed choice’
[Consumer Credit, Doorstop Selling & Distance Selling]
Substance of the Contract – it has introduced laws which cover
many of the ‘terms’ contained within the Contract aiming at making
it more favourable to the consumer [Unfair Contract Terms &
Consumer Guarantees]
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Consumer Sales & Guarantees Directive 1999/44
Green Paper (1993) – very comprehensive discussion on so-called “legal”
guarantees [conformity], commercial guarantees and after-sales services
Wanted to introduce ‘simple ground rule’ provisions on consumer information – it
stated:
“As a rule the consumer is unaware of the existence of the legal guarantee (i.e.
conformity) and knows only the commercial guarantee. Thus when there is no
commercial guarantee or when it cannot be invoked, the consumer believes he has no
rights. Moreover, in many cases the consumer believes his rights are limited to the
content of the commercial guarantee”
Eurobarometer (2009) – Sales Remedies – 15 M.S. – majority of consumers not
aware of their rights – unaware of statutory periods in which remedies can be
brought
European Consumer Summit, 18-19 March, Brussels – Workshop on Marketing
of Guarantees – same issues highlighted – consumers not aware of rights
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Consumer Sales & Guarantees Directive 1999/44
As ever the Green Paper emphasises the importance of encouraging healthy
competition based on good commercial practices = INTERNAL MARKET
Advocated a legal scheme for commercial guarantees that would be applicable
throughout the EU – a so-called ‘European Guarantee’ – such a guarantee
would mean the statutory application of standard guarantee conditions in all
Member States for the same type of goods
Other issues discussed included: the notion the guarantee could confer
additional benefits over an above the rights arising from the mandatory
regime; the joint & several liability of vendors belonging to a selective
distribution network established by the same manufacturer, advertisements
as part of the guarantee & after-sales services.
FINAL DIRECTIVE – much less than that…… minimum harmonisation –
Directive not a Regulation [Consumer Protection v. Food] – Contract & Sales
Law well established in each Member State reluctance to change things
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Consumer Sales & Guarantees Directive 1999/44
The guiding notion of the directive is that goods purchased shall be in conformity
with the contract of sale – elaborated in Preambles.
The legal protection of conformity is rendered compulsory by the law and is not
dependent upon the contract.
The guarantee [warranty] instead depends on the willingness of one person, the
guarantor, who assumes personal liability for certain defects
Article 1 – scope of application of Directive & definitions
“consumer” “consumer goods” “seller” “producer”
“guarantee” “repair”
Water, gas & electricity, goods sold by hire purchase excluded
Member States may exclude second-hand goods sold at public auctions
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Consumer Sales & Guarantees Directive 1999/44
Article 1 – definitions
consumer – any natural person who, in the contracts covered by the
Directive, is acting for purposes not related to his trade, business or
profession
consumer goods - any tangible movable item
seller – any natural or legal person who, under a contract, sells consumer
goods in the course of his trade, business or profession
producer – shall mean the manufacturer or importer of consumer goods and
any other person purporting to be a producer by placing his name, trade
mark or distinctive sign on consumer goods
guarantee – any undertaking by a a seller or producer to the consumer,
given without extra charge, to reimburse the price paid or to replace, repair or
handle consumer goods in any way if they do not meet the specifications set
out in the guarantee statement or in the relevant advertising
repair – shall mean, in the event of lack of conformity, bringing consumer
goods into conformity with the contract of sale
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Article 2 – conformity with the contract
“the seller must deliver to the consumer, goods which are in conformity with the
contract of sale” – comply with descriptions; fit for purpose; show quality &
performance normal in goods of the same type
Additional aspects
Article 2(3) – offers some reassurance to the seller – no lack of conformity, if at
the time the contract was concluded, the consumer knew of the lack of
conformity or could not reasonably be unaware of it. [Serbia demand to look
at goods ??]
Article 2 (5) – supplements the conformity with the contract of sale – by
deeming that any lack of conformity resulting from incorrect installation of
the consumer goods shall be deemed to be equivalent to lack of conformity
if installation forms part of the contract of sale and the goods were installed
by the seller or under his responsibility.
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Article 3 – rights of consumer in the event of lack of conformity
If the goods do not conform – consumer shall be entitled to have the goods
brought into conformity free of charge by repair or replacement [within a
reasonable time] – unless this is impossible or disproportionate. C-65/09
Gerb. Weber GmbH v Jurgen Wittmer ; C- 87/09 Ingrid Putz v Medianess
Electronics GmbH [Recital 15 – M.S. in national law may stipulate that
reimbursement takes account of the use the consumer had of the goods]
Case 404/06 Quelle AG
Have an appropriate reduction made in the price if consumer is not entitled
to repair or replacement or seller hasn’t completed the remedy in time or has
considerably inconvenienced the consumer
Have the contract rescinded with regard to the goods on same grounds
Repair ‘free of charge’ is judged using the principle of proportionality [e.g.
unreasonable costs on seller: Art. 3(3)]
Art 3(6) – contract cannot be rescinded if the lack of conformity is minor price reduction is then the norm
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Article 4 – right of redress for the seller
Provides the final seller, who is held liable for a lack of conformity by the
consumer to pursue legal remedies against previous sellers in the
contractual chain or the ultimate producer.
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Article 5 – Time Limits
Seller is liable where the lack of conformity becomes apparent within 2 years of
the delivery of the goods. [Recital 18 - M.S. may suspend or interrupt this
period in national law to facilitate amicable settlement]
Art 5(2) – Member States may stipulate that a consumer must inform the seller
of the lack of conformity within 2 months from the moment he/she detected
the lack of conformity
Art 5 (3) - If fault occurs within 6 months obligation placed on seller to prove it
did not exist at the time of delivery. Additional protection for the consumer. It
cannot be relied upon if it is incompatible with the nature of the goods or the
nature of the lack of conformity. It falls upon the seller wishing to escape
liability to prove the goods were in conformity at the time of delivery.
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Article 6 – establishes a special regime for commercial guarantees.
This covers situations where a promise is given to repair the product if it breaks
within a certain period of time.
Def: ‘any undertaking by a seller or producer to the consumer, given without extra
charge, to guarantee the price paid or to replace, repair or handle consumer
goods in any way if they do not meet the specifications set out in the guarantee
statement or in the relevant advertising’
These types of guarantees can induce consumers to purchase a product – but via
Art. 6 (1) such guarantees shall be legally binding on the offeror or under the
terms laid down in the contract. The guarantee must state the consumer has
legal rights under applicable national law governing the sale of consumer
goods & make clear those rights are not affected by the guarantee – must
include info on making claims; duration & territorial scope and name/address of
guarantor – M.S may stipulate a language requirement (Art 6(4))
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Article 7 – Waiver of Rights
Seeks to ensure the ill-informed consumer does not give away their consumer
protection rights
Art. 7(1) – any contractual term which excludes or restricts a consumer’s rights
before any lack of conformity is brought to the seller’s attention shall not be
binding on the consumer
M.S have option in relation to second-hand goods – shorter timeframe for the
seller’s liability Art. 5.(1) – 1 year
Art 7(2) – consumer is not deprived of the protection of Dir.1999/44 as a result of
opting for the law of a non-Member State as the law applicable to the
contract has a close connection with the territory of the Member States
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Article 8 – minimum harmonisation
Other rights which the consumer may invoke under national rules governing
contractual or non-contractual liability are not set aside by this Directive.
Member States may adopt stricter rules or measures designed to ensure a
higher level of consumer protection
Article 12 – Review Clause
Commission Communication COM (2007) 210
The case for introducing producer’s direct liability ??? – Belgium, France,
Finland, Latvia, Lithuania, Portugal, Spain & Sweden have introduced various
forms of producer’s direct liability – ‘status quo’
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Transposition in Member States
Minimum harmonisation – Directive also offers M.S choices in certain areas
Art. 1 (3) (exclusion of second-hand goods sold at public auction) was exercised only by
10 member states, with 17 not doing so.
Art. 5 (2) grants the option to require notification of a lack of conformity within 2 months,
used by 17 member states, but not by 10.
The option in Art. 7(1) (reduced period for second-hand goods) was applied by 15
member states, whereas 12 chose not to use it.
14 member states have used the option in Art. 6(4) (language of guarantees).
Some member states have expressly adopted provisions based on Recital 18
(suspension of two-year period), e.g., Czech Republic, Hungary, Malta, Spain.
Some have also adopted measures following Recital 15 (reimbursement reduced to
consumer to take account use they have had of the goods).
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Transposition in Member States
A number of member states have, given a consumer the free choice between the 4
remedies.
In some countries, there are longer time periods applicable (Finland, Ireland, United
Kingdom)
A number of legislators took no steps to implement Art. 2(4) [seller not bound by public
statements], which could also be explained on the basis of minimum harmonisation
Some of the new member states have retained their system of mandatory guarantees
[Hungary, Slovenia], or have more extensive rules in place [Austria, Estonia, Finland,
Latvia, Malta].
Producer’s direct liability [Belgium, France, Finland, Latvia, Lithuania, Portugal, Spain &
Sweden]
Conclusion: Great variations in M.S – does it create inconsistencies e.g. some M.S.
introduce a ‘negative presumption’ of conformity – the time at which conformity is to
be assessed varies some relying on the passing of risk at the crucial time, others its
linked with delivery – method of calculating price reduction is unclear – no provisions
on cross-border enforcement…………………………… SERBIA ?????
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Conformity
Satisfactory quality
Someone buying a new pair of shoes would clearly not expect the soles to
come away from the uppers after wearing them in normal conditions for a
few days.
Particular Purpose
If a consumer was told that certain software generally used on Apple computers
was compatible with a PC and it was not, it would not conform to contract. If
the consumer made no mention of what PC he had and the software was
bought on the assumption that it was compatible then the consumer would
not be likely to have grounds for complaint.
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Conformity
Repair & Replacement
Having a one-year-old lawnmower with an inherent fault [needs new motor], the consumer
can request that it be repaired rather than pursuing compensation to pay for a repair
that he then has to arrange himself. Alternatively, he could request a replacement
lawnmower of the same/similar specification.
Reasonable time & significant inconvenience
In the case of a wedding dress, there is clearly a crucial date in relation to which the
number of days involved may become critical and that may be the main deciding
factor. Repair might then not be feasible but a replacement might be appropriate.
In the case of an electric hedge trimmer the number of days may be less critical than with
a wedding dress.
With a fridge, the lack of an alternative would weigh heavily in the analysis of this crucial
household item but the provision of a loaned item might prove part of a successful
remedy and so avoid “significant inconvenience”.
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Conformity
Disproportionate cost & partial/full refund
If a one-year-old table was only worth €50 and a repair would cost €75 then the seller
could decline such a request and offer a replacement. If he had no such table in stock
then he could refuse both repair and replacement & offer a partial refund
If a consumer has had constant problems with a product, from the time of the sale, to
such an extent that he had never enjoyed any normal benefit from the product then
the seller might be expected to offer him a full refund of his money
Sales Receipts [not covered by the Directive]
In providing redress to a consumer, a seller is entitled to satisfy himself that the product
was purchased at his store and on the date claimed. A sales receipt is a good way of
providing such proof (as is a well detailed credit card statement). Sales receipts are
not a legal requirement in the Directive.
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National Sales Law v. Conformity
Conformity rules exist in conjunction with Member State’s national sales of
goods laws – often issues of sales of goods mixed-up with those relating to
conformity rules
Examples
You examined the goods and the fault was obvious
The seller pointed out the fault to you
You have changed your mind & found cheaper goods
You have damaged or altered the goods or failed to care for them in line with
instructions
You have used the goods for some time & problem is due to wear & tear
Goods lasted for period of time they could be reasonably expected
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Canon Pixma Printer
Purchased January 2013
Warranty period = covers the hardware of the product for 1 year from date of
purchase
Warranty service available in authorised Canon service centres – Irish address
supplied
Costs of transportation to Canon centre to be paid by consumer
Warranty does not cover any maintenance, repairs or replacement of parts due
to normal wear & tear – or any software
Warranty does not affect consumer’s statutory rights under applicable National
Law
CD-installation – important issue via-a-vis Directive
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Samsung Galaxy 7” Tablet
Purchased March 2013
Warrants the product is free from defects in material design and workmanship for
24 months [6 months for batteries]
If within warranty period, under normal usage, the product proves defective it
should be returned to the retailer where purchased. The liability of Samsung
and its appointed maintenance company is limited to the cost of repair and/or
replacement of the unit under warranty
Warranty only valid with proof of purchase [sales receipt etc]
Samsung’s obligations are to the repair of the defective part and at its discretion
replacement
Warranty not applicable if used with accessories not approved by Samsung or
failure of the product from incorrect installation or use not in compliance with
product manual instructions
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Civil, administrative & penal remedies
Ireland
Consumer contracts are protected by the Sale of Goods & Supply of Services
Act 1980. Under this Act the purchaser of goods has a number of rights - the
main ones are



Goods must be of merchantable quality – goods should be of reasonable
quality taking into account what they are meant to do, their durability and
their price
Goods must be fit for their purpose – they must do what they are reasonably
expected to do
Goods must be as described - the buyer must not be mislead into buying
something by the description of goods or services given orally by a
salesperson or an advertisement.
When you buy goods in a sale you have the same rights as when you pay full
price for the goods.
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Civil, administrative & penal remedies
Ireland
European Communities (Certain Aspects of the Sale of Consumer Goods and
Associated Guarantees) Regulations 2003 – transpose Directive 1999/44 –
give consumer additional protections & rights
If you made your purchase using your debit or credit card you may be able to
get your bank or credit card company to reverse the transaction. This is
called a chargeback
If repair or replacement are not offered by the seller & you are not happy with
the seller’s response – the option is available to seek damages in the Small
Claims Court - inexpensive, fast way for consumers to obtain redress –
claim cannot exceed €2,000.
Consumer completes Form [cost €25] – seller has 15 days to reply to Form
when received from the Court – reply sent to consumer and the Court tries
to settle the case at this stage. If no settlement it is set down for court
hearing. Not normal court hearing – informal, you can have legal
representation but its not compulsory – mediation-type proceedings – can
appeal the decision to the Circuit Court
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Civil, administrative & penal remedies
European Union
Alternative Dispute Resolution (ADR) and Online Dispute Resolution (ODR)
Procedures – new proposals adopted in March 2013
Every M.S. must have ADR procedures in place for all consumer contractual
disputes by March 2015 – they must be ‘fair, independent & transparent’
New obligation - all traders must inform consumers about ADR when a dispute
cannot be settled directly between consumer and trader
ODR – single entry point on web – complete your details of your dispute in your
own language – ODR notify the trader and together consumer & trader will
agree on which ADR entity to utilise. Disputes must be solved within 90 days
Why necessary ????? – in 2010 – 1 in 5 (20%) consumers in EU encountered
problem buying goods and services, especially over the internet – only a
very % of consumers sought and secured effective redress
Project will look at this issue – study & seminar – amendments to LCP ??
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Directive 2011/83 – Sales Contracts provisions
Preamble 13 – M.S can maintain or introduce national provisions on issues not
specifically addressed in the Directive, such as additional rules
concerning sales contracts, including in relation to the delivery of goods of
provision of information during the existence of the contract
Preamble 18 – the Directive will not affect national law in the area of contract
law for contract law aspects aspects that are not regulated by the
Directive – the Directive should not affect issues in relation to a lack of
consent; general contractual legal remedies; rules on excessive prices or
unethical legal transactions
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Directive 2011/83 – Sales Contracts provisions
Article 2 – definitions
Goods - means any tangible movable items
Sales contract – means any contract which the trader transfers or undertakes
to transfer the ownership of goods to the consumer and the consumer
undertakes to pay the price thereof
Commercial guarantee – means any undertaking by the trader or producer
(the guarantor) to the consumer, in addition to his legal obligation relating
to the guarantee of conformity, to reimburse the price paid or to replace,
repair or service goods in any way if they do not meet the specifications
or any other requirements not related to conformity set out in the
guarantee statement or in the relevant advertising available at the time of,
or before the conclusion of the contract
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Directive 2011/83 – Sales Contracts provisions
Article 3
Directive does not apply to contracts:











For social services
For healthcare
For gambling
For financial services
For property sales
For construction of new buildings
For package holidays
For timeshare
For foodstuffs
For passenger transport services
For telecoms
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Directive 2011/83 – Sales Contracts provisions
Article 5 – pre-Contractual information
Idea is that if the consumer is provided with clear & comprehensive information in the precontractual phase then they will make a more informed choice – but this doesn’t
affect existing National Contract Law & issues like ‘offer’ and ‘acceptance’
1.
2.
3.
4.
5.
6.
7.
The main characteristics of the goods
Information on the seller – name, address, tel no etc
Total price of goods inclusive of taxes, plus all additional charges i.e. delivery
costs, postage costs
The arrangements for payment and delivery times if necessary
A reminder of the conformity of goods with the contract obligation on the part of the
seller. The conditions of after-sales service and any commercial guarantees where
applicable
Duration of the contract
When selling digital content seller will be required to inform consumers of the
functionalities of such content, the protection measure available to them and any
relevant interoperability with hardware or software
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Directive 2011/83 – Sales Contracts provisions
Article 18 – Delivery
Preamble 51 & 52
The seller shall deliver the goods to the consumer (third party) by transferring the physical
possession or control of the goods to the goods without undue delay – no later than
30 days from the conclusion of the contract [unless parties agreed otherwise]
If the seller fails to deliver the goods within 30 days [or agreed time] – the consumer shall
ask him to deliver the goods within an additional period of time, appropriate to the
circumstances. If the seller fails again to deliver the goods – the consumer is entitled
to terminate the contract
If the contract is terminated, the seller is obliged to immediately reimburse the consumer
all monies paid under the contract
Besides termination of the contract – this Directive does not extinguish any other
remedies available to the consumer under National Laws for the non-delivery of goods
& termination of a contract.
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Directive 2011/83 – Sales Contracts provisions
Article 20 – Passing of the Risk
Preamble 55
In contracts where the seller delivers goods to the consumer the risk of loss or damage to
the goods passes when the consumer or a third party indicated by the consumer or a
carrier [e.g. DHL, Post Office] who was not commissioned by the seller to deliver the
goods, has acquired possession of the goods
French Law – the contract in and of itself transfers ownership from one party to another –
no need for physical transfer
German Law – the transfer of ownership [real property] takes place when registered
Idea of the Directive is to give the consumer a kind of ‘protective shield’ they being the
weaker party
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