Total recall?

Product safety is an emotional subject that is being brought up more often nowadays. Since technology and communication keeps on improving, it is no wonder that in the legal world we tend to focus our attention nowadays more on preventing product defaults (therefore, regulating product safety and promoting unsafe product recall) rather than on product liability (regulating consequences of product defaults). Anyone who has heard stories about laptops overheating on their users' thighs (How the heat from a laptop can 'toast' the skin on your thighs) or children choking on toy parts (Two Children's Toys Recalled Due to Choking Hazards) would be happy to hear that yesterday the European Parliament's Consumer Protection Committee adopted two reports on: product safety and market surveillance. These reports aim to contribute to the review of current European product safety rules, by strengthening consumers' information rights and further regulating product safety requirements. (see our previous post: Product Safety in 2013) 

Some of the introduced by the MEPs changes in the current Product Safety Directive promote a new, voluntary, third-party issued safety label (EU Safety Tested mark) as well as make a label on product's country of origin mandatory, in order to increase transparency.

"Where a good was produced in more than one country, the country of origin will be where it underwent its "last, substantial, economically justified processing or working in an undertaking equipped for that purpose and resulting in the manufacture of a new product or representing an important stage of manufacture"." (Internal Market MEPs tighten up product safety and market surveillance rules)

 

The MEPs also brought back to the draft the 'precautionary principle' that Commission's Members wanted to remove from the currently binding rules. Pursuant to this principle, some products may need to be removed from the market faster, since consumers are given the benefit of the doubt as to their safety. Another interesting addition is a provision pursuant to which a pan-European database on product-related injuries suffered by consumers would be created. This could make it easier to monitor a product that enters a few different European markets at the same time. It was also suggested to introduce a public EU-wide blacklist that would name all firms that have been 'repeatedly found to have intentionally breached' EU product safety rules.

The vote in the plenary on these two new regulations is planned for December this year. (Interview: how new product rules will improve safety for consumers)

New rules on mortgages?

Yesterday, the Economic and Monetary Affairs Committee MEPs and EU member state representatives reached a preliminary deal concerning new harmonised rules on mortgages, mainly aiming to increase the sustainability of the credit market.

From what can be read in the EP press release, it seems that the proposal, which builds on a previous Directive proposal by the commission, is based on supervision, promotion of better decision-making and a degree of attention to borrowers who encounter financial difficulties.

Under the first aspect, more attention should be paid to"mortgage sellers".

As concerns decision-making, not only pre-contractual information should be improved, e.g. by offering a range of clearly comparable and sustainable alternatives; the proposal also envisages a cooling-off period of seven days. 

Once the contract is signed, the possibility to switch provider and to repay early should be guaranteed against "tying" practices.
Finally, in the event of default the imagined piece of legislation would:

- promote the stipulation of agreements foreseeing repayment in kind; 

- require "arrangements for selling the property for the "best effort" price and for facilitating the remaining debt repayments".

So much for the moment, with the negotiators having left important issues (such as that of implementation) open. The first impression is that the proposal stays quite timid on at least one crucial point: if vesting of the immovable is enough to cover a debt  "provided that the lender and borrower expressly agree to this in the contract", how should lenders convinced to include such agreement? Post-eviction indebtedness probably needs to be addressed a bit more resolutely than this.

Product Safety in 2013

Last week, the Commission launched the Product Safety and Market Regulation Package 2013.

The package's main content is represented by two proposed regulations, one concerning standards and the other addressing enforcement issues.

While the new Consumer Product Safety Regulation should mainly update (or enable actors to update) existing standards, the most important change to the existing regulatory framework should be an enhanced emphasis on product identification and traceability.

More "revolutionary" are the changes which would be brought about by the new Market Surveillance Regulation, which aims to create a one-tier system for major surveillance actions in the whole domain of non-food products (abolishing the current distinction between consumer and non-consumer goods). The new Regulation would therefore both unify procedural rules and stimulate the exchange of information among national authorities.

These actions should together contribute to mantaining and forstering a high level of product safety while simplifying the regulatory and procedural enviroment.

Whether the various stakeholders will agree with the Commission on this point, remains to be seen. In the meantime, more information can be found here, here and of course here.