II. The Proposal for a directive on consumer rights -
How good is it for consumers?
The Proposal for a directive on consumer rights is part of a
process of reviewing the Consumer Acquis 305 which started in 2004
with the aim to simplify and complete the existing regulatory fram ework
regarding consumer law306. The objective of the Review is the
creation of a consumer internal market which rightly balances the call for
competitiveness in the business field and the need for high protection as
regard consumers307. Albeit these two aims seem at first sight
divergent, providing that an adequate balance is stricken in the Proposal, the
rules it lays down are said to have many positive consequences for both
consumers and business308. Before going any further, it shall here
be recalled that the Proposal brings together four existing
Directives309. However, as defined in the introduction, this work is
only aimed at analysing some of the consumers' rights provided for under the
Directive of 1999.
The objectives pursued by the Commission are described at
length (A). However, when confronted to the content and the form of the
Directive, the Proposal seems unable to achieve its goal (B). Thus, as the
basis on which is erected the Proposal is undermined, there are calls for new
approaches capable of reaching the aims assigned (C).
A. The Proposal's objectives and the ways to achieve
them
The Proposal postulates that there is a need for new rules
regulating consumer contract law and that these rules are better being
uniformed throughout Europe. The Commission's arguments justifying both
standpoints lie on the same basis, which is mainly economic: the completion of
the internal market .
First of all, the Commission notes that the current practice
of regulating consumer law through minimal harmonisation directives has led to
a fragmented regulatory framework310. All further drawbacks
highlighted are said to steam from this observation. Firstly, the different
rules currently prevailing all over Europe are said to lead to high transaction
costs for business trading cross-border. Thus, these so-called compliance costs
often deter businesses, especially small and medium-sized
companies311, willing to provide goods and services to other
countries in Europe from so doing. As an example, responses from the green
paper showed that 55% of retailers considered the extra costs of complying with
the different rules in Europe as very important or fairly
important312. Secondly, even if business actors actually decide to
provide goods and services to other countries, the additional compliance costs
will be included in the prices. As a consequence, consumers are directly
affected since they have either a large choice of goods and services but at
high prices or either a restricted access to them. Thirdly, the fragmented
regulatory framework is also decried for undermining consumers' confidence and
to prevent them from shopping beyond the frontiers of their own country.
Indeed, they do not know on which rules they can rely on and the level of
protection they enjoy in a foreign country. Thus, they
think that any problem occurring with goods acquired
cross-border will be very difficult to solve. Conversely, if they felt secure
in the transaction, for instance if they knew they are well-protected even in
another Member States, they would be more disposed to
contract313.
For the Commission, these drawbacks stand as obstacles in the
development of the internal market and it is its duty to have them raised.
Indeed, it has to be recalled that the establishment and the development of the
internal market is, since the beginning, one of the European Union's
goal314. Thus, the positive consequences said to be brought by a
common set of rules applicable everywhere in Europe regardless of the country
concerned justify the Commission's intervention.
Put it in a positive manner, the Proposal's objectives are to:
«Contribute to the better functioning of the
business-to-consumer internal market by enhancing consumer confidence in the
internal market and reducing business reluctance to trade
cross-border»315.
These objectives can be achieved by «decreasing the
fragmentation, tightening up the regulatory framework and providing consumers
with a high common level of consumer protection»316. As
the practice of minimum harmonisation is unable to put
317
an end to the fragmentation of the regulatory framework , the
Commission is of the opinion that a full harmonisation Directive is the best
way to complete the aim assigned to the Proposal.
It is worth noting that the Proposal is based on article 114
of the Treaty on the Functioning of the European Union318
(previously article 95 of the EC Treaty). This legal basis specifically states
that the Commission's proposals, in particular as regard consumer
protection, take as a base high level of protection »319
must « a . However,
article 169(2) of the Treaty (previously article 153(2) of the
EC Treaty) on the Functioning of the European Union provides that measures
taken on the basis of article 114 are adopted for «the completion of
the internal market». Conversely, in accordance with articles
169(2)(b) and 169(3), articles 169(4) states that the Commission's proposals
aiming at certain policy goals, including consumer protection, cannot prevent
Member States from «maintaining or introducing more stringent
protective measure». As the Proposal provides for full harmonisation,
its primary goal is thus the development of the internal market320.
This might explain why the Proposal's content is, as we will see, not so much
consumer-friendly321.
B. The Proposal's ability to reach its
objectives
The analysis of both its content (1) and its form, which is to
say the fact that it provides for a full harmonisation directive (2), shows
that the Proposal as it is currently designed is not the best way to reach the
aims assigned to it.
1. The Proposal's content
The provisions regarding consumer sales and guarantees laid
down in the Proposal are mainly based on what was already stated in the
Directive of 1999322. As a matter of fact, while transposing it, a
lot of Member States provided for more protection than what was process
«gold -plating» 323
stated in this Directive, a called . However, they
cannot do the same with the regime the Proposal sets forth.
Indeed, it provides for a full harmonisation directive which
means that Member States cannot maintain or introduce provisions different from
the one the Proposal 324
written down in . To put it
concretely, this means that all provisions exceeding those
laid down in the Directive of 1999 will have to be repealed by the Member
States325 . Thus, the content of the provisions and the exact
protection they grant to consumers are ought to be carefully analysed.
This Proposal is highly criticised since except on a few
matters, there is no real improvement of the protection already existing. Even
worst, with the full harmonisation provided for by the Proposal, some rules
which were satisfying as setting a minimum level of protection for consumers
appear to be too low and thus questionable as they have to be transposed
exactly as they are stand in the Proposal. More precisely, it will be seen that
their implementation in some Member States, as France and the UK for instance,
would lead to a decrease in the protection already given to
consumers326. Moreover, this part will also show that many
provisions stated in the Proposal are far from being clear and need to be
interpreted by judges. Likewise, the rules stated do not give any bargaining
power to consumers in case of disagreement with sellers. Finally and more
generally, it will be
demonstrated that the Proposal's rules are not designed to
reach the objectives assigned to it.
All these consequences are to be avoided since consumers
regard as natural any improvement of the law protecting them whereas any
regression is seen as unjustifiable327. As such, the regression
resulting from the proposal in some Member States will undermine the European
Union's legitimacy. This potential outcome is not to be underestimated
providing that one of the final aim of the harmonisation of European law is the
building of the Europe of the citizens328.
However, it is worth noting that V. Reding, in her first speech
as the new
Commissioner responsible for the Proposal, declared that
«it is clear that the proposal
»329
as it is today does not offer the right level of
protection on all issues . She then added that she was going to work with
the Parliament and Member States in order to increase the level of consumer
protection stated in the Proposal. Thus, when assessing the Proposal, it must
be kept in mind that amendments are going to be added.
The Proposal provides that seller must deliver goods which are
conforming330.
331
Conformity of the good is to be assessed at the time of the
delivery . Thus, the assessment of the Proposal will be made by first analysing
the rules as regard delivery of the good (a) and by having a closer look to the
regime set as regard nonconformity (b).
a. The delivery of the good
Provisions regarding the delivery of the good are in practice
important for consumers, especially when they buy goods online. As this issue
was not dealt with under the Directive, it is a great step forward that it is
tackled by the Proposal. Its article 22 states that the material possession of
the good must be transferred within 30 days
332
from the date of the conclusion of the contract . This is a
default rule and parties are allowed to agree for a longer or a shorter period.
If the seller fails to make a delivery in the agreed period, the consumer is
entitled to a refund of any sum he has paid within seven days after the date
when the delivery was supposed to take place333.
of a long 334
First all, be
it can noted that, rule,
as default period
the stated is rather .
Indeed, in most cases, when the good is purchased directly at
the store for instance, the delivery would be expected to take place
immediately. Moreover, even though the delivery has to be made after the
conclusion of the contract, 30 days remain a long period. Currently, most of
the Member States provides that the delivery must take place within a
reasonable period which is less than 30 days, and some of them
335
even states that the delivery has to take place immediately .
As long as parties can freely provide for another period if necessary, it seems
difficultly understandable why the default rule is so long. It thus seems to
move back consumers' rights as they stand now in most Member States.
In addition, no guidance is given as regard the notion of late
delivery and non-
delivery. To put it concretely, when is a consumer
confronted to a late delivery and/or
a non-delivery? These are classic questions which courts have
to solve 336 and for which answers might vary. It is thus
regrettable that the Proposal does not precise them further. As it provides for
full harmonisation, this task should be fully undertaken and should not leave
such important issue to Memb er States an. This is not in line with the
Proposal's aim to put an end to the fragmentation of the rules amongst Member
States.
b. The regime for non-conforming good
The assessment of the Proposal will be made by first analysing
all issues pertaining to non-conformity of a good (i), the time limits allowed
to lodge a claim (ii) and the remedies available for consumers (iii).
i. The non conformity
Provisions regarding non-conformity are at the core of the
balance which is to be found between the consumers and the sellers' interests.
Indeed, non-conformity is the reason why a consumer will complain to the seller
and, consequently, is the very object of the disagreement or even the
litigation arising between them. More than the notion of non conformity itself
(a), what is important is the presumption attached to it
((3) and the duty to notify any non-conformity
(y).
á. The notion of non-conformity
Article 24(2) of the Proposal specifies what is exactly meant
by non-conformity and replicates almost verbatim the provisions
already laid down in the Directive of 1999. Thus, we will not develop this
point.
However, the Proposal brings a slight change in its article
24(3) which , as tiny as it seems at first sight, can have in practice
significant consequences. The Proposal specifies that there is no lack of
conformity if the consumer, when contracting, was aware or «should
reasonably have been aware» of the non -conformity of the good
purchased337. As a comparison the existing Directive provided that
there is no lack of
338
conformity if the consumer «c ould not reasonably be
unaware » of it . Where the Directive states a negative rule
(consumers «could not»), the Proposal provides for a
positive rule (the consumer «was» and
«should»). Thus, one can wonders whether the modification
brought by the Proposal could be interpreted as putting on consumers an onus to
investigate the good before purchasing it339.
If such interpretation was to be true, the Proposal would go
too far since it would impose on consumers an unfair and too heavy duty. It is
not denied that consumers claiming for a remedy because of an obvious defect
they could not be unaware of are likely to be acting in bad faith and should
not be granted such remedy. However, consumers are ought to think that any good
looking normal at first sight is actually normal. This is especially true as
regard complicated goods such as laptop as well as for pre -packaged good for
which an examination is in fact impossible340. Even the Vienna Sales
Convention itself, which applies to international sales contracts
occurring between professionals, does not put such a
duty on the buyer's shoulders341.
â. The presumption of non-conformity
When a good does not work properly or does not work at all, it
can be difficult to prove whether this problem comes from a defect affecting
the good or whether the good has in fact been badly used or damaged after it
has been purchased. This is especially true concerning complex goods, as
cameras for instance. Thus, the outcome of the case often depends upon the
party on which lies the burden of proof. Indeed, it is as hard for a consumer
to prove that the good purchased is actually defective than for a seller to
prove that it is the consumer who is responsible for the problems which
occurred342.
That why s principle the six presumption 343
is the Proposal the
replicate of months
already laid down in the of 1999 344
Directive . It however changes the moment when
the period begins (the passing of risk in the Proposal instead
of the delivery in the Directive of 1999). Indeed, if during the first sixth
months after the passing of risk a problem occurs, the defect is presumed to
have already existed when the risk passed. Conversely, if the defect appears
after the first sixth months, then it is the consumer who has to prove that the
problem occurred because the good is defective. It shall here be recalled that
in fact, risks pass usually at the delivery of the good345. This
rule seems to be reasonable and to strike an equitable balance between the
consumers and the sellers' interests. However, it can be regretted that such
presumption is not further extended. Indeed, even though this
opinion is not agreed by everyone346, I think that the presumption
should apply after the good has been replaced or repaired. Indeed, in both
cases, the good was not conforming and a remedy was granted to the consumer.
However, the new good or the good replaced is ought to be as good as a new one
and I do not see why the presumption described above should not apply again in
these cases.
ã. The duty to notify
Article 28 of the Proposal provides that consumers, to be able
to lodge a claim for lack of conformity, must notify any such non-conformity
within two months after the moment they discovered it347. Such rule
was already provided for under the Directive of 1999 but, after many debates,
was made optional, and many countries did not implement it348.
This rule seems to me to be unfair and hardly justifiable as
regard the overall balance of the Proposal. Indeed, consumers already have to
prove that the good they have purchased does not conformed and, except during
the first sixth months, that this non-conformity already existed when they
acquired it. Thus, I do not see the rationale of any rule aiming at
increasing the burden of the proof consumers have to provide. Furthermore I
think that a two months notice is anyway too short.
Moreover, providing that proving the existence of any
non-conformity will get harder
as the time passes, it is in the consumers'
interest to notify such lack of conformity as
soon as
possible349. Thus, if they do not actually notify such
non-conformity within
two months, one can reasonably assumes that something
impeached them from so doing. As an example, if the good was purchased far away
from where is living the consumer, in a nother Member State for instance, all
information necessary to give any notice to the seller, at first place his
details, can be hard to find. As a result, such provision actually hampers
consumers' cross-border acquisitions since it will be harder, in practice, to
obtain a remedy for goods purchased in another country. Providing that the
Proposal seeks to facilitate cross-border transactions, this rule seems to be
even less understandable.
As a matter of fact, this rule already existed in the current
Directive and was already implemented by some Member States. However, an
analysis of the overall context in these countries shows that this duty to
notify was implemented as a counterbalance to other rights already granted to
consumers. In the Netherlands for instance, such duty exists but the consumers
have the possibility to claim for remedies throughout the economic life span of
the product and can freely choose the remedies they prefer. Accordingly,
stating a duty to notify was seen as counterbalancing such strong power given
to consumers. Providing that no such power is given to consumers in the
Proposal, the imposition of a duty to notify is highly questionable.
Finally, it must be noted that the Proposal's provisions are
rather lapidary and do not tackle the consequences of a failure of the duty to
notify. Does the consumer lose all remedies? That would be very harsh. In any
case, here again, the Proposal's rule is not clear enough and, if it was to be
adopted as it currently stands, would lead to a decrease in the protection
granted to consumers in many Member States.
ii. The duration of the guarantee: the two years cut-off
period
The provisions as regard the duration of the guarantee are at
the heart of any set of rules regulating consumer sales since they provide for
the length of time during which consumers are entitled to claim for a remedy in
case of non-conformity. While consumers call for a long period, businesses
argue that they are in need for some legal certainty and cannot carry the risk
of hav ing to comply with consumers' complain for a too long period. As in the
current Directive350, the Proposal provides that consumers have two
years from the delivery of the good to lodge a claim for
non-conformity351.
The Proposal provides for a full harmonisation directive. As a
result, the two years period originally stated as a minimum guarantee in the
Directive of 1999 is now turned into a maximum period from which Member States
cannot derogate. Such consequence is highly questionable and many authors see
this short period as a «large step back»352 in
consumers' protection and argue for its deletion or, at least, its
extension.
In addition, it must be noted that this two years period
starts right at the delivery of the good and not at the discovery of the
non-conformity. This means that after this two years period, even though
consumers can prove that the good they acquired does not conform and that such
non-conformity already existed at the moment of the delivery, they will not be
entitled to claim for remedies. Thus, this period is too short, especially for
goods which are expected to last for much longer than two years. Consequently,
if consumers want to enjoy a longer protection when buying these
kind of items, their only choice is to purchase a commercial
guarantee which is often costly. Moreover, such short period does not work as
an incentive for producers to design goods intended to work for a longer
period. Such outcomes can hardly be seen as protecting consumers.
Moreover, a lot of Member States allowed for a longer period.
As an example, the
legal guarantee lasts for up to five years in Norway and
Scotland, six years in
England, Wales and Northern Ireland and throughout
the economic lifespan of the
353
good in the Netherlands . In these Member states, the
implementation of a two years period would have odd effects. Indeed, in the UK
and in the Netherlands for instance, this longer period concerns all contract
of sales and is therefore applicable for both consumers and non-consumers.
Thus, if the Proposal's provisions were to be applied as they stand now in
these countries, non-consumers would enjoy a greater protection than consumers.
Thus, the latter would be likely to pretend they are not consumers or were not
acting as consumers when purchasing the nonconforming good in order to
beneficiate from the better rule354.
Technically speaking, there are two ways to improve the
existing rule: either provides for a longer period, such as the six years
period in England, Wales and Northern Ireland for instance, or to states that
this two years period begins at the discovery of the non -conformity of the
good, such as in France as regard the two years period for latent defect for
instance.
Furthermore, it is to be noted that there is no suspension of
the two years cut-off
period when the goods are under repair. Conversely, in
case of reparation, a new
period of two years applies from the moment when the consumer
is in possession of the replaced good355. Such difference is rather
surprising providing that a consumer who had his good repaired is as much
entitled to expect for a conforming good for a period of two years as a
consumer who had his good replaced. Moreover, since sellers are the one who
have the choice between repair and replacement356, one can assume
that, in addition with the fact that it is generally less expensive, they will
prefer to carry out repair to avoid the renewal of the two years period.
Finally, as such, this provision will not encourage sellers to be
diligent in the reparation of the goods357.
iii. The remedies
The Proposal provides that consumers are entitled to repair,
replacement, price reduction and rescission (a) as well as for
damages (13).
a. The hierarchy in the remedial scheme:
repair or replacement first, price
reduction or rescission second
The hierarchy was already provided by the Directive of 1999
which functioning has already been detailed (A. The Directive of 1999 on
certain aspect of the sale of goods and associated guarantees). Thus, this
part only aims at analysing the changes made to it and at explaining the
consequences that its implementation in all Member States would have.
When transposing the Directive of 1999, some Member States
have chosen to implement the hierarchy, such as Germany and France for
instance, whereas some other States, UK, chose to choice consumers 358
as
such the leave the to . In the UK,
all buyers are entitled to reject the good at a first stage.
However, as the Proposal provides for a full harmonisation directive, the UK
would not be allowed to leave such remedy to consumers. Thus, where
professional buyers would be able to terminate the contract and reject the good
if it appears to be non -conforming, rules would be less consumer-friendly for
consumers who would, as a first tier of remedy, be only able to ask for repair
or replacement. This absurd situation shows that as it stands now, Member
States are likely to be unwilling to accept the Proposal.
Moreover, under the Proposal, consumers' possibility to choose
between the remedies is even more restricted than under the Directive. Indeed,
the latter let the primary choice between all remedies to the consumer:
«In the first place, the consumer may require the
seller to repair the goods or he may require the seller to replace them, in
either case free of charge, unless this is impossible or
disproportionate»359.
Conversely, the Proposal states:
«The trader shall remedy the lack of conformity by
either repair or replacement according to his
choice»360.
Thus, under the Proposal, consumers cannot even choose the
remedy they think the most appropriate to solve the lack of conformity they
suffered. Such restriction is questionable as consumers are the prejudiced
party and should therefore be able to choose. If it is true that sellers are
not necessarily at fault when delivering a nonconforming good since they can be
unaware of such non -conformity, consumers are definitely not at fault
themselves. Thus, sellers should be the party who carries the risk and should
not be given the power to select the remedy. Moreover, as they are primarily
concerned with financial considerations, they are likely to choose the less
costly solution which will often be the repair of the good, even though the
good should in fact be replaced. Furthermore, consumers are left with no
bargaining power since they have to accept the remedy chosen by the seller. In
the consumers' field, such bargaining power is of great significance since in
practice, it is the first defense consumers can oppose to sellers. The second
defense is the judge but, as already highlighted, consumers are often unlikely
to go to court, especially when the good at stake is not very expensive. Thus,
the Proposal's provision leads to an unwelcome decrease in consumers'
protection361.
In addition, in practice, contrarily to the result sought,
this Proposal's rule is likely to prevent consumers from purchasing goods
abroad. Indeed, as they cannot ask for the termination of the contract, they
will have to accept a repair or the replacement of the good. However, if the
item has been bough abroad, that means consumers will have to send it back to
the seller and then wait for it to be repaired or replace. Such scheme involves
a heavy process which lies on consumers who will thus prefer to buy goods close
to the place where they are living as it will then be easier to comply with the
Proposal's provisions.
Moreover, when it comes to price reduction and termination of
the contract, th e rules appear to be unclear and ambiguous. As an example, no
guidance is provided regarding the calculation of the price reduction. Yet, as
sellers are in a more powerful position, they can impose their way of
calculation which can then be at the consumers' disadvantage. Thus, for the
sake of consumers' protection, more details on this point would have been
welcomed.
Likewise, no information is given as to the way the contract
is to be terminated and the consequences attached to such termination. Thus,
these issues are left to national laws, which is rather surprising considering
the fact that the termination of the contract is likely to be problematic and
considering the aim of the Proposal which is to harmonise the law on field
362
his
t . As a matter of fact, Member States provide for
363
many different manners to terminate the contract . As an
example, in France, such termination has to be commanded by a judge (latent
defect and «obligation de délivrance conforme) or can be freely
used (lack of conformity provided for by the Ordinance of 2005) whereas in the
UK, consumers can freely choose it. Moreover, a lot of questions are left
unanswered such as how the parties have to undo the performances they have
already made. Indeed, providing that the rescission of the contract brings it
to an end with retroactive effects, questions such as whether consumers have to
pay for the utilisation of the good and whether the decrease in the good's
value and its fair wear and tear have to be supported by consumers are left
open.
Furthermore, the reasons entitling consumers to claim for
price reduction and rescission of the contract are not enough detailed. The
Proposal states that consumers can claim for the second tier of remedy if:
Ò(a) The trader has implicitly or explicitly refused
to remedy the lack of conformity
(b) the trader has failed to remedy the lack of conformity
within a reasonable time
(c) the trader has tried to remedy the lack of conformity,
causing significant inconvenience to the consumer
(d) the same defect has reappeared more than once within a
short period of timeÓ364.
If the Proposal gives helpful indication by saying that the
assessment of the
«reasonable timeÓ and the
Òsignificant inconvenienceÓ has to take into account
the
nature of the good and the purpose for which the consumer has
purchased it, in
practice, these notions are likely to be debated at court and
will have to be explained
further by judges. Moreover, no further
explanation is given as regard the
reappearance of the defect within a short
period. This new limb is an improvement
since it was not provided by the existing Directive. However,
the notion of Ò same defectÓ is unclear since we do not
know whether it must affect the same good or the replace or repaired good. Here
again, this notion will have to be explained by judges. Such outcome is
questionable as rules applicable to consumers should be clear
enough to be understood and applied by both parties to the
contract and should be usable by consumers on their own.
Finally, the remedial scheme does not take into account some
situations where consumers have lost all confidence in the sellers' and their
goods. In such cases, consumers will only be willing to bring the contract to
an end. As an example, if a car's brakes appear to be defective, the consumer
might not have trust in this car anymore and will not want to have it repaired,
replaced or even to have its price reduced. These remedies would simply be
inadequate as the consumer will just be willing to terminate the contract and
give back the car. However, following the Proposal's rules, the consumer would
be forced to accept a repair or a replacement. Thus, generally speaking, it can
be said that the Proposal's rules do not give enough flexibility as regard the
remedies available for consumers and should thus be amended.
â. Damages
The existing Directive does not provide for any rules as
regard damages. Thus, this issue was governed by Member States' themselves
which all have different ways to tackle it. As an example the scope of damages
which can be recovered under French law is wider than under English law.
Surprisingly, the Proposal barely deals with this matter and only states that
«consumer may claim damages for any loss not remediedÓ by
the repair, replacement, price reduction or rescission, as the case may be.
This can be the case if a car's engine explodes and blows away a garage, for
instance. Under the Proposal, in such case, the consumer would be able to claim
for damages which would be awarded in accordance to his national rules. As a
result, differences between Member States in the way damages are to be granted
and as
regard the scope of damages which can be recovered, such as
damages covering disappointment or distress for instance, will
remain365. This is questionable since the Proposal's aim is to
harmonise consumer sales.
2. The Proposal's method - Full
harmonisation
Full harmonisation is a rather new approach which was announced
in the 2002
Communication on the Consumer policy strategy 2002 -2006 of 7
May 2007366. It was
367
then a method used in four Directives dealing with consumer
protection . As the Proposal is also following this approach, a lot is at stake
for Member States which will lose their sovereignty over some matters. As such,
Òfull harmonisation will probably be the most Proposal
»368
controversial aspect of the . If this way of acting is
the best
one in order to achieve the objectives stated by the
Commission, then little can be said to criticise it. However, from this
perspective, this approach seems in fact undesirable and has even been
described as a «toxic packageÓ369. Indeed, the
meaning of full harmonisation is rather obscure (a) and a directive which
provides for full harmonisation does not seem to be the best way to achieve the
Proposal's objective (b). In addition, generally speaking, it is doubtful that
any unified solution is desirable (c).
a. The uncertain extent of the full harmonisation
Article 4 of the Proposal states:
«Member States may not maintain or introduce, in
their national law, provisions diverging from those laid down in the Directive,
including more or less stringent provisions to ensure a different level of
consumer protection».
Likewise, two decisions delivered by the ECJ on 23 April 2009
make clear that in case of a full harmonisation Directive, Member States cannot
adopt rules which are more protective of consumers than those laid down in the
Directive. These decisions are concerned with the Directive on unfair
commercial practices370 and state:
«(...) the Directive fully harmonises those rules at
the Community level. Accordingly (...), Member States may not adopt stricter
rules than those provided for in the Directive, even in order to achieve a
higher level of consumer protection» 371.
These decisions are confirmed by another decision delivered by
the ECJ on 14 January 2010 372.
The impossibility for Member States to keep their own existing
rules protecting consumers beyond the standards laid down at the EU level flows
clearly from both article 4 of the Proposal and the words of the ECJ itself.
However, the extent to which Member States are prevented from so doing remains
unclear. In other words, the ascertainment of what falls within the Directive's
scope and what does not is not self- evident. As V. Reding acknowledges
herself, this is due to the fact that the relationship between cons umer
contract law and general contract law is not clear373.
To put it concretely, if the Proposal was to be adopted,
Member States would have to transpose it exactly as it stands and could not
maintain or implement different rules374. However, this is only true
in the fields which are regulated by the Proposal. Conversely, in other areas,
nothing precludes Member States from providing for different rules that those
laid down in the Directive. As an example, while Member States could not give
up the hierarchy of remedies for consumers, they would not have to provide for
it for all contracts of sales since the Proposal is only concerned with
consumer protection. Beyond this apparent simplicity, it can be difficult to
determine which fields are concerned with the Proposal and which fields are
not. To stick to our example, if there were a hierarchy of remedies applicable
for consumers whereas other buyers would remain free to choose the remedy they
want, would consumer be entitled to rely on the general law of sale and claim
for the remedy they want? If the answer is yes, then the Proposal's objective
to bring to an end the existing fragmented regulatory framework in Europe is
clearly illusory. Conversely, if the answer is no, which seems to be the right
way to interpret the notion of full harmonisation375, absurdly,
consumers would be likely to pretend they were acting for a professional
purpose in order to avoid being qualified as consumer and to beneficiate from
more lenient rules. Indeed, we have already seen that as they are currently
shaped, the French and the English rules protecting consumers are often
provided for all buyers376. Thus, providing that the Proposal leads
to a regression in consumers' protection, if France and the UK were only to
implement the Proposal in the field of consumer law, professional buyers would
be more protected than lay people buying as consumers. Such outcome is
described as a «legal mess»377 and is highly
criticised by authors.
To avoid this « legal mess », Member States
can rightly decide to extend the scope of
the Directive while transposing
it. Such process is referred to as «spontaneous
harmonisation» of
law and permits to preserve a certain unity and coherence between
378
general contract law and consumer contract law . Thus, as an
example, Member States could decide that the two years time limit to lodge a
claim applicable to consumers is in fact applicable to all buyers. However,
this shows that the Proposal's influence in national law might be far greater
than assumed at first sight and that the frontiers between the Proposal and
national law are blurred and vague379.
Moreover, as a matter of fact, the only thing certain about
full harmonisation as stated in the Proposal is the uncertainty it provides for
Member States as regard its influence on other fields it does not specifically
govern. Indeed, the Proposal will need the European Court of Justice (ECJ)'s
help to clarify its scope. However, in the mean time, no definitive answers
will be available and this will introduce legal uncertainty in all Member
States380.
In addition, the Proposal threatens wide areas of national
law, both in France and in the UK. Indeed, some main features of consumers'
protection in France and in the UK are in the questioning room. As an example,
as it provides for a right to terminate the contract as a first tiers of
remedy, the English right of rejection is incompatible with the Proposal which
provides for a hierarchy in the remedies. Likewise, the French latent defect
provides that if the good appears to be defective, buyers have two years to
lodge a claim from the moment they discovered the defect. This seems to
be incompatible with the Proposal which provides for a period of two years
from the passing of risk. These are only examples and generally
speaking, many rules
deeply settled in national legal systems might have to be removed
in accordance with the Proposal.
b. Is a full harmonisation Directive the right way to reach the
Proposal's
objectives?
Full harmonisation is the way chosen by the Proposal to
provide for a high level of consumer protection as well as to fulfill its other
objectives. However, we have already seen that full harmonisation does not go
without drawbacks and that its coverage area is unclear. These shortcomings are
ought to be further detailed in order to assess the Proposal's ability to reach
the aim it targets.
The Proposal points out the fragmented regulatory framework
currently prevailing in
Europe as being very costly for businesses willing
to sell goods or provide services in
381
other member States and, thus, as hampering cross -border
transactions . However, no empirical evidences are given by the commission to
support this allegation and these costs have never calculated 382
been . Even more, as M. Loos argue, whether a
common set of rules will increase cross-border trade and will
decrease prices for consumers is far from being certain383. In fact,
a lot of different reasons are said to prevent companies from doing business
outside the country where they are implanted, such as commercial practices,
languages, customs, lack of knowledge
384
about people needs and about the right ways to meet the
demand... None of these concerns would be answered by a full harmonisation
Directive. In addition, if law is a factor of importance, tax law or procedural
law are more likely to be problematic than consumer law385.
Actually, the extent to which the fragmented regulatory framework
in Europe as regard consumer law actually impedes cross-border
business remains unknown386.
The Proposal also justifies full harmonisation by saying that
the instauration of a common set of rules will strengthen consumer confidence
and is thus a way to allow them to fully enjoy the internal market. However,
here again, the Commission does not detail further this opinion and does not
give any evidence showing that consumers' confidence would be reinforced by the
implementation of a full harmonisation directive387. Albeit there is
a lack of studies on this matter, I do not believe that legal considerations
play an important role in consumers' decision to shop abroad or not.
In practice, one of the most common ways for consumers to shop
in another Member
388
State is the internet. In this case, consumers are often
attracted by low pricesor by the fact that some items are only available
online. However, I doubt that they actually wonder which law will be applicable
to the contract they are going to conclude. It is even more doubtful that legal
matters can prevent them from buying on the internet. In fact, they probably do
not particularly care of the exact location of the seller as long as it does
not increase the price they will pay. Actually, it is interesting to notice
that even in their own country, consumers are generally more reluctant to shop
when they are far away from where they live because they know that if something
goes wrong, it will be harder to solve the problem389. This
disinclination is not due to the legal framework but to obvious geographical
considerations390. Thus, as long as consumers are ready to shop
online, they agree to ta ke the risk that if a problem arises, it will be more
difficult to solve. Hence, what is of significance is not full
»391
harmonisation since it is thus a «solution to an
irrelevant or non existent problem . Instead, what really matters is the
Proposal's ability to provide consumers with a way to solve their problem
simply and, if possible, without any judge's help. A common set of rules
applicable similarly everywhere in Europe would assist consumers in the
understanding of their right after a problem occurred but would
probably not work
as
an incentive to make them purchase a good in a foreign
country.
Moreover, generally speaking, it must not be forgotten that
consumers shop, first of all, in their own country. Providing that the proposal
will lead, in some Member States, to a decrease in the level of protection
consumers are currently enjoying, I do not see how this will strengthen their
confidence in the internal market. Instead, such consequence is more likely to
undermine consumers' confidence in the European institutions. Full
harmonisation is therefore likely to have more drawbacks than advantages. Thus,
a deeper analysis of the potential consequences of the Proposal should be
undertaken before going forward.
Furthermore, it should be kept in mind that even if the
Proposal's advantages exceed
392
its shortcomings, full harmonisation is costly and, thus,
might not be desirable . These costs are, in particular, the price of the
implementation and interpretation of a new body of law which is, in a way,
alien to the national legal system of the country trying to adapt it or, more
likely, to adapt to it393. In addition, the existing directive has
just been adapted by member States which just get used to it. Thus, providing
for changes might not be desirable either for consumers and businesses for
which legal certainty is an important issue.
Finally, whether a full harmonisation Directive is the best way
to achieve
harmonisation remains an open question. More precisely, one can
wonder why the
394
Commission did not cho ose to act through a regulation instead
of a Directive . Indeed, even though member States cannot derogate from the
rules laid down in a in the Proposal, they still need to transpose them. As a
result, Member States will still have different national laws using different
languages and concepts which might be interpreted differently. Therefore,
companies willing to trade in other Member States will still need to identify
the right law of transposition and to understand how it works alongside the
given law 395
countr y's national . Moreover, it must not be forgotten that
full harmonisation does not prevent consumers from relying on
other legal basis to solve their problem. As an example, In France, consumers
would still be entitled to rely on the general law of contract and, for
instance, on the error on a substantive quality of the good, to ask the
termination of the contract which provided them with a good which was not at
all the one they were willing to acquire. Likewise, as we have already
highlighted, claims concerning the allocation of damages will be governed by
the national law of each Member States. Thus, the understanding of the system,
even harmonised at the European level, provided by these countries entails a
good understanding of their overall legal system. This process is neither
self-evident nor cost-free. Conversely, is a unified solution is to be taken,
for the sake of clarity a regulation would have made sense since it would have
been immediately and similarly applicable to all Member
States396.
c. Is a unified solution the ideal solution?
More than merely aiming at the implementation of a particular
rule, the Proposal targets in fact a policy goal. Thus, in particular
in the field of consumer protection, I am of the opinion that a unified
solution is not desirable.
The aim of the Proposal is to protect consumers as efficiently
as possible while taking into account reasonable interests of businesses. As
already highlighted, such process involves subtlety as it is necessary to
strike a fair balance between divergent interests. However, all Member States
have a different conception of what is a faire balance, depending on
the value given to the concept of freedom of contract for
instance397. Thus, as an example, the Czech Ministry on Trade and
Industry made clear that it regards consumer protection as an aim as long as it
does not «restrict the economic activity of
vendors»398. Conversely, we have seen that the UK has for
instance a more generous conception of what is a fair balance. Moreover, Member
States also have different priorities and preferences and are thus unlikely to
strike the balance similarly399. Hence, there is no unique answer.
Even more, there should not be any unique answer. Indeed, jurisdictions
providing for different rules can learn from each other400. This is
especially true since commercial practices and, thus, ways to protect consumers
continuously change. Therefore, the best scheme to protect consumers is not yet
fully found and is in fact varying. As a consequence, I am of the opinion that
leaving alongside different legal systems providing for different answers is
the best way to follow commercial practices and to protect efficiently
consumers. Put it concretely, I believe that it is better to state only a
minimum threshold of protection than to provide for uniformed and static
rules.
In addition, if unified rules are laid down, they should be as
good as possible and, even more, «future proof»401 .
Indeed, as Member States will not be allowed to modify them and as any
amendment would have to be undertaken at the European level, any flow affecting
the rules could only be corrected after a lengthy and heavy
process402. In the mean time, the flaw would remain and would
undermine consumers' confidence. A text is in fact «future proof» if
two conditions are met: first, if the provisions laid down are good and there
is no legitimate claims for any amendment and, second, if the text is
flexible enough to adapt to upcoming and unknown economic
practices403. As a matter of fact, the Proposal is fairly criticised
and flexibility is a quality inherently alien to a process aiming at providing
for uniformed rules.
Furthermore, as said, the striking of the balance and the
conception of what is a fair balance between consumers and businesses'
interests is different depending on the legal system, culture and history of
any country. Thus, if any law can be «ideal», what would be ideal in
a country would most probably not be a good rule in another country. That is
why the Proposal leads to regression in some countries while it leads to an
improvement of consumers' protection in other Member States404. To
sum up, a unified solution which, per se, lacks flexibility and is
mechanical in its application, is arguably a bad solution for consumers.
C. Alternative solutions
Now that we have demonstrated that, as it currently stands, it
is doubtful that the Proposal will reach the aims targeted by the Commission
and is thus, as it currently stands, undesirable for consumers, it is
interesting to have a look at other solutions which could better achieve these
objectives. This approach raises the question of what is the best level law
405
to regulate consumer . As a mater of fact, a single level
regulation might not be the best solution. Thus, three
different ways can be followed, which all involve regulation on a multilevel
basis: full harmonisation on selective matters only (1), minimum harmonisation,
but at a high level (2) or the use of the «blue button» (3). These
suggestions will be assessed through their ability to complete the aims
assigned to the Proposal.
1. Full targeted harmonisation
As we have pointed out, the main criticisms targeting the
Proposal concern the fact that it provides for a full harmonisation Directive.
Indeed, as such, the rules laid down become mandatory for Member States which
cannot provide for a better protection for consumers. However, if the Proposal
was providing for full harmonisation only on specific points which would be
those, in the Commission's view, which really need to be unified throughout
Europe, the Proposal would not faced so much opposition and would be more
likely to be accepted by Member States406. This solution is even
referred to as Òthe magical words»407 and is
supported by many authors, including those of the EC Consumer Law C
ompendium who overtook an in-depth analysis of
some European Directive's implementation in Europe, including
the Directive of 1999 408. In addition, it is worth noting that V.
Reding declared that she «will consider the option of more targeted
harmonisation where it is practicalÓ409.
The points to be fully harmonised would have to be clarified
but, following the Commission's reasoning, there would likely be those which
create barriers to trade. As an example, it could be thought that it is
important to unify the period during which consumers can lodge a claim in order
to provide legal certainty in the business field . Conversely, providing for a
strict hierarchy in the remedies consumers are entitled to claim does not seem
to be a major obstacle standing in the way of companies willing to provide
goods or services in other Member States.
Thus, such solution would have the advantage to shape the
Proposal in a way which would enable it to reach its objectives. Indeed, as
major barriers to trade would be removed, or at least lowered, the level of
consumer protection would not, generally speaking, decrease. Enjoying both a
satisfying level of protection and some common rules they know and can rely on,
consumers would thus gain confidence in the internal market. In addition, this
solution would permit to leave to Member States their sovereignty over some
matters whose roots are deeply implanted in their history, culture and legal
system.
However, arguably, such solution would not provide for any
simplification as it would create a system which would have a complex
relationship with national rules depending on whether a given rule is optional
or provides for full harmonisation. Moreover, the regulatory framework would
remain fragmented and would be ruled at
the national level since Member States could keep some of
their provisions and would anyway have to transpose the Directive
themselves. As such, it would not bring clarity to consumer and business and,
though being better than a Directive providing for full harmonisation of its
whole content, is not desirable.
2. A high level of minimum harmonisation
This solution would transform the current Proposal which
stands for full harmonisation to a new Proposal which, as the previous one,
would only provide for minimum harmonisation. However, the aim would be to
grant consumer with a level of protection far higher than in the current
Directive.
The main advantage of such solution is to allow Member States
to keep their sovereignty over their law which sometimes goes at the heart of
their legal system. As an example, France could keep its systems of latent
defect and «garantie de conformité» which are strongly linked
with the Civil Code and its history. Likewise, the UK could keep its right of
rejection which has been shaped by cases law and lies at the core of the law
ruling the sale of good. Moreover, the pro tection consumers could rely on
would be, generally speaking, higher. As such, consumers' confidence would
increase.
However, such solution would not put an end to the fragmented
regulatory framework prevailing in Europe and thus, would not lower the costs
necessary to sell goods and services in other Member States. As such, this
solution is unlikely to attract the Commission's approval.
3. The so-called «blue-button»
This «blue button» is also called the
28th law as it would provide for a new set of rules regulating
consumers at the European level410. This new set of rules would
merely offer consumers another ground on which they could rely and this new
basis would exist alongside the existing provisions of Member States and would
not threaten them. As an example, this new regime could be set through a
regulation and, as such, would provide for exactly the same protection
everywhere in Europe. Thus, wherever they would be in the European Union,
consumers would always enjoy de facto a minimum level of protection as
they could always rely on this new regime.
This solution would protect Member StatesÕ existing
rules. However, the main weakness of this solution is that it does not provide
for any simplification in the regulatory framework in Europe411.
Even worst, it would probably further complicate some matters and would not
raise the so-called compliance costs standing in the way of businesses willing
to trade in other Member States.
Nonetheless, I believe that this solution is the best one.
Indeed, as we have demonstrated, bringing to an end the fragmented regulatory
framework in Europe is very difficult, cannot be achieved with a full
harmonisation directive and is anyway not desirable. Thus, the «blue
button» solution can provide for a high level of protection for consumers
similarly applicable throughout Europe. As compared to a minimum and
full targeted harmonisation Directive, the law applicable within all Member
States would be the same. Thus, this would strengthen consumer's
confidence in the internal market as they would know that
wherever they are, there is an efficient law on which they can rely if the
contract they are concluding goes wrong. As such, still keeping in mind the
Proposal's objective, this would lead to an increasing of cross-border
transactions and would thus permit the development of the internal market.
Finally, beyond the aims assigned to the Proposal, such solution would also be
an important part of a process leading to the creation of a commune culture
throughout Europe and, thus, to the creation of a Europe of the
citizens412.
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