Chapter 18 Answer guidance to end of chapter questions

1. Do the combined effects of the Consumer Rights Directive, Consumer Rights Act, Rome, and Brussels Regulations (and UK equivalents) overprotect the online consumer?

To answer this question I would expect the student to discuss in order:

1. To identify that online consumers engage in distance agreements, which are regulated by the Consumer Protection (Distance Selling) Regulations. By regs.12 and 13 and Schs.2 and 3 the supplier of goods or services must supply a considerable amount of information before the contract is concluded, including the price of the goods or service including all taxes, any delivery costs, arrangements for payment and delivery, a description of the goods or service, the geographical address of the place of business of the supplier to which the consumer may address any complaints, and information about any after-sales services and guarantees. Failure to supply these may mean the consumer is not bound by the contract or even the possibility of a fine under reg.19.
2. To identify that the same Regulations allow a right of rejection and cancellation under reg.29. This allows the consumer to cancel the contract and return the goods without reason within 14 days (reg.30). Students may note similar cooling off periods for digital goods under regs. 36 and 37.
3. A discussion of the Rome and Brussels regulations should note that firstly these are no longer in effect in the UK post Brexit. For those states where they still apply it protects consumers by allowing them to raise claims in their local courts (or requiring them to be sued in their local courts) and protecting them by applying their law. Post Brexit the UK replicates choice of law through the amended Civil Jurisdiction and Judgments Act 1982. On jurisdiction it is more complex in that amendments to the Civil Jurisdiction and Judgments Act 1982 are designed to replicate the Brussels Regulation, but UK consumers lose the automatic recognition of judgements in overseas jurisdictions making enforcement more complex.
4. The Consumer Rights Act provides protections on safety, quality and service for goods including digital goods and services. It also provides protection against unfair contractual terms.
5. A balanced analysis of the provisions should probably conclude that the protections do not overprotect the consumer. The consumer is at a considerable disadvantage in terms of bargaining power, enforcement power and online buys goods ‘sight unseen’. These protections balance the bargaining power somewhat.

2. The European Commission have claimed that ‘The level of consumer confidence in cross-border shopping is low. One of the causes of this phenomenon is the fragmentation of the Consumer Acquis. The fragmentation and the related uneven level of consumer protection make it difficult to conduct pan-European education campaigns on consumer rights and to carry out alternative dispute resolution mechanisms.’ Is this true?

This is a broad question asking students to examine the current state of consumer protection law in the EU. Students should point out there is a framework of provisions (particularly for distance transactions which include internet transactions) including the Consumer Rights Directive, and the Brussels and Rome Regulations. The main body of protection is found in the Consumer Rights Directive which gives to consumers extensive powers of rejection of goods and or services and a thorough list of information to be provided before or at conclusion of the contract. There are however weaknesses, in particular the Consumer Rights Directive is really about information to be provided and a right to reject. There is little about quality of goods or services which in the UK is to be found in the Consumer Rights Act 2015, reflecting the fragmented nature of the consumer acquis. It is this that the Commission refers to in introducing the draft Online Sales Directive and draft Digital Content Directive. Students may note that the purpose of the proposed directives is to the respective differences in contract law regulation between member states. According to the Commission, differences in contract law between member states generate additional transaction costs when concluding cross-border transactions that deter both consumers and businesses from engaging in such transactions. The Commission believes the existence of different domestic provisions governing the contractual rights of consumers generates uncertainty among them as to the extent of their rights when purchasing from another EU jurisdiction. This lack of legal certainty deters consumers from making cross-border purchases, in particular online. Consequently, consumers do not exploit the potential of having access to a wider choice of goods and digital content at more competitive prices. The proposed directives will harmonize consumer rights, creating a single set of rules providing the same level of consumer protection across the European Union.

3. Do you agree with the following statement? ‘Consumer protection measures for online purchases are actually of little value as the individual consumer is not likely to pursue an action for the small amounts of money involved. It would be much better to allow freedom for online retailers and consumers to contract as they see fit. Retailers would then pass on cost savings to the consumer and this would be a real and tangible, benefit.’

This is a broadly worded question. There is no specific right or wrong answer to this it is designed solely to have students consider whether a free market approach may ultimately be preferable to a regulated consumer protection approach. The answer should range across the materials and discussion in Chapter 18.