European Law Report - Consumer rights plan
The European Commission has recently embarked on a European consumer rights plan intended to incorporate the current legislative measures dealing with consumer protection in a comprehensive directive on consumer rights. The proposed directive aims at a...
The European Commission has recently embarked on a European consumer rights plan intended to incorporate the current legislative measures dealing with consumer protection in a comprehensive directive on consumer rights. The proposed directive aims at a harmonisation of consumer law, in a bid to abolish the current disparate legislations at national levels.
Currently EU rules on consumer contractual rights originate from four EU directives on unfair contract terms, sales and guarantees, distance selling, and doorstep selling. These directives provide for minimum standards of protection for consumers, allowing member states to adopt stricter standards, if they so wish, in their domestic legislation. This necessarily leads to different standards being applied in different member states, leading to regulatory fragmentation and causing obstacles to cross-border trade.
The new directive is intended to bring together and merge these EU rules in a consistent and coherent way through a single instrument, while setting out EU-wide standards for consumer protection. A single legislation will make it easier for consumers to know what their rights are, and for traders and businesses to know what their obligations are. A single standard applicable in all the member states, on the other hand, will make easier the conclusion of cross-border transactions between suppliers and consumers. Hence, member states will not be allowed to introduce or keep national rules which differ from the proposed directive, whether or not those rules provide better protection.
The draft directive deals with the sale of goods and services from business to consumer. It is intended to harmonise the rights of consumers in relation to various aspects including the provision of information about the goods, late deliveries or non-deliveries, cooling-off periods, returns, refunds, repair terms and guarantees. It applies to both domestic and cross-border transactions, whether high street purchases or those made online.
In relation to information to consumers, the proposed directive requires traders to provide information in accordance with a clear set of information requirements, such as the main characteristics of the product, geographical address of the trader, price inclusive of taxes, arrangements for payment, delivery and duration of the contract. This will allow consumers to make informed choices on whether to purchase a product or not.
A cooling-off period of 14 days, allowing the cancellation of consumer contracts, will be introduced across the board. Specific consumer rights relating to sales will be put in place. The directive strengthens consumer protection against late delivery and non-delivery. In fact, under the draft directive, the trader is required to deliver the goods to the consumer within a maximum period of 30 days from signing the contract. During and until delivery, the trader bears the risk, cost of deterioration and loss of the goods. In addition, the consumer will have a right to a refund no later than seven days from the date of delivery.
The proposal also provides for the same standard set of remedies available to all consumers who purchase a faulty product. Where goods do not conform, repair and replacement is the first remedy provided. Consumers will be entitled to a refund in restricted circumstances, for instance where the trader refuses to remedy a faulty product or fails to do so in a reasonable time.
The proposed directive provides for a black and grey list of unfair terms included in consumer contracts. The "black list" contains contract terms which in all circumstances are considered unfair, whereas the "grey list" contains terms which are deemed unfair unless the trader proves otherwise to the satisfaction of the competent national authority. These lists have been introduced in the light of the stronger bargaining position of traders when concluding transactions with consumers.
The Consumer Rights Directive must be approved by the European Parliament and EU member states before coming into law. It is envisaged that this would be done by the end of this year. Member states would be required to transpose the directive into domestic law within 18 months of the measure coming into effect.
Dr Grech is an associate with Guido de Marco & Associates and heads its European law division.
Currently EU rules on consumer contractual rights originate from four EU directives on unfair contract terms, sales and guarantees, distance selling, and doorstep selling. These directives provide for minimum standards of protection for consumers, allowing member states to adopt stricter standards, if they so wish, in their domestic legislation. This necessarily leads to different standards being applied in different member states, leading to regulatory fragmentation and causing obstacles to cross-border trade.
The new directive is intended to bring together and merge these EU rules in a consistent and coherent way through a single instrument, while setting out EU-wide standards for consumer protection. A single legislation will make it easier for consumers to know what their rights are, and for traders and businesses to know what their obligations are. A single standard applicable in all the member states, on the other hand, will make easier the conclusion of cross-border transactions between suppliers and consumers. Hence, member states will not be allowed to introduce or keep national rules which differ from the proposed directive, whether or not those rules provide better protection.
The draft directive deals with the sale of goods and services from business to consumer. It is intended to harmonise the rights of consumers in relation to various aspects including the provision of information about the goods, late deliveries or non-deliveries, cooling-off periods, returns, refunds, repair terms and guarantees. It applies to both domestic and cross-border transactions, whether high street purchases or those made online.
In relation to information to consumers, the proposed directive requires traders to provide information in accordance with a clear set of information requirements, such as the main characteristics of the product, geographical address of the trader, price inclusive of taxes, arrangements for payment, delivery and duration of the contract. This will allow consumers to make informed choices on whether to purchase a product or not.
A cooling-off period of 14 days, allowing the cancellation of consumer contracts, will be introduced across the board. Specific consumer rights relating to sales will be put in place. The directive strengthens consumer protection against late delivery and non-delivery. In fact, under the draft directive, the trader is required to deliver the goods to the consumer within a maximum period of 30 days from signing the contract. During and until delivery, the trader bears the risk, cost of deterioration and loss of the goods. In addition, the consumer will have a right to a refund no later than seven days from the date of delivery.
The proposal also provides for the same standard set of remedies available to all consumers who purchase a faulty product. Where goods do not conform, repair and replacement is the first remedy provided. Consumers will be entitled to a refund in restricted circumstances, for instance where the trader refuses to remedy a faulty product or fails to do so in a reasonable time.
The proposed directive provides for a black and grey list of unfair terms included in consumer contracts. The "black list" contains contract terms which in all circumstances are considered unfair, whereas the "grey list" contains terms which are deemed unfair unless the trader proves otherwise to the satisfaction of the competent national authority. These lists have been introduced in the light of the stronger bargaining position of traders when concluding transactions with consumers.
The Consumer Rights Directive must be approved by the European Parliament and EU member states before coming into law. It is envisaged that this would be done by the end of this year. Member states would be required to transpose the directive into domestic law within 18 months of the measure coming into effect.
Dr Grech is an associate with Guido de Marco & Associates and heads its European law division.