Wednesday, 23 June 2010

New targets for consumer rights – hit or miss?

The debate about the Consumer Rights Directive, on which we reported earlier on this blog, continues now that the European Parliament is revising the proposal. Recently, two draft reports have been produced under the direction of MEP Andreas Schwab, one dated 31 May 2010 and one dated 9 June 2010. Glancing through these, the many stakeholders that were dissatisfied with the initial proposal can take comfort, it seems, from Schwab´s efforts to “completely change the original Commission proposal”.

Which are the main changes then? The most significant change of direction relates to the decision to let go of the intention to opt for full harmonisation for every part of the Directive. As Commissioner Viviane Reding indicated, this approach does not seem appropriate nor feasible in light of the needs and wishes of Member States with regard to consumer law. Instead, a shift to ‘targeted full harmonisation’ for those issues where this degree of harmonisation would be of benefit to the single market may be welcomed. In the draft reports we see this reflected in the new proposal for Article 4, which reads: “Save as otherwise provided by this Directive, Member States may not maintain or introduce, in their national law, provisions diverging from those laid down in this Directive” combined with a range of exclusions at various places in the draft (e.g. in Article 4 itself, and in Article 5(3a), (3b) and (3c), Article 19, Article 22(2a), Article 26(5b), Article 28(5a), Article 34(1a), Article 35(1a)). The overall purpose appears now to be to put in place a uniform set of rules on distance and off-premises contracts, consumer sales and unfair terms which applies to simple sales and services transactions. The exclusions ensure that the Member States have a lot of leeway to diverge in cases where contracts are either specific (e.g. relating to immovable property, transport, or financial, healthcare and welfare services) or where it is deemed on other grounds that stricter provisions are required to ensure a high level of consumer protection (e.g. by designating additional terms as terms presumed to be unfair).

In the draft reports, this new plan for targeted harmonisation is backed-up with an evaluation scheme that requires Member States to report back to the Commission on actual diverging measures that have been taken in order to ensure a higher level of consumer protection. The advantage of this could be, one presumes, to at least be able to chart the remaining differences in national laws; and perhaps to encourage the Member States to conduct a review of their national consumer laws to see if and how greater alignment with EU law and policy is something that should be pursued.

For now, it seems to early to say whether these drafts should be regarded as a hit or a miss. One thing that is clear is that they open up the debate on the Directive in a positive way, giving interesting suggestions as to how the further revision of the acquis should unfold. And more importantly: placing the emphasis back on the substantive consumer rights that EU legislation seeks to ensure.

More developments on this are expected later this year, so stay tuned…

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