Out-Law / Your Daily Need-To-Know

UK consumers could win rights of direct action under unfair trading law

Out-Law News | 22 Jan 2009 | 9:10 am | 2 min. read

The European Parliament has called for a change to the way the UK has implemented consumer protection laws to allow cheated customers to take direct action against businesses.

The Parliament has adopted a resolution which demands that countries who have implemented the Unfair Commercial Practices (UCP) Directive in a way which denies them the right to take direct action change their laws.

The UK implemented the Directive last year when the Government created the Consumer Protection from Unfair Trading Regulations 2008 (the CPRs).

Under the UK CPRs criminal prosecutions can only be brought by the Office of Fair Trading (OFT), local authority Trading Standards Services (TSS) and, in Northern Ireland, the Department of Enterprise, Trade and Investment.

"Some Member States have provided that only certain regulatory bodies may enforce national rules adopted in implementation of the UCP Directive and have not made provision for a direct right of redress for consumers, who thus are not entitled to bring claims for damages resulting from unfair commercial practices," said the text adopted by the Parliament.

"[The Parliament] calls on Member States which have not already done so to consider the necessity of giving consumers a direct right of redress in order to ensure that they are sufficiently protected against unfair commercial practices," it said.

The Parliament also asked the European Commission to tell consumers more about their rights under the UCP Directive.

"[The Parliament] calls on the Commission and the Member States to organise information campaigns to heighten consumers' awareness of their rights, providing them with greater protection against unfair commercial practices and misleading comparative advertising," it said.

In the Parliamentary debate EU Commissioner Androulla Vassilou did not directly address the demand that EU countries all allow their citizens to take direct action. She said only that there was an existing framework for countries to use to co-ordinate their enforcement of laws deriving from the Directive.

She did say the Commission was trying to improve how citizens are informed.

"The Commission would like to assure this House that it will continue to work closely with Member States to ensure adequate and effective enforcement of the directives on unfair commercial practices and misleading comparative advertisement," she said. "The database containing national transposition measures and case-law will be set up this year and will serve as a useful tool in this respect."

Vassilou, though, rejected a proposal by the Parliament that consumer protection law be extended to cover some small business transactions.

"The report mentions the need to protect not only consumers but also SMEs against unfair commercial practices. On this point the Commission reminds the European Parliament that a full harmonisation directive on unfair business-to-consumer practices was already a very ambitious proposal which would have failed if its scope had been extended to business-to-business unfair competition practices," she said.

"It has been concluded from the consultation leading up to the proposal and from the deliberations in Council that there was little support for extending the scope of the directive to cover business-to-business unfair commercial practices. As regards aggressive practices which were regulated for the first time at EU level through the directive on unfair commercial practices, it was considered that such practices occur almost exclusively in business-to-consumer relationships. Misleading business-to-business practices are already covered by the directive concerning misleading and comparative advertising. Such practices should continue to be regulated solely by this directive," said Vassilou.

The Parliament's resolution has been sent to the Commission and the EU member states for consideration.