Wednesday, March 28, 2012

Joint English and Scottish Law Commission Report on Consumer Redress for Misleading and Aggressive Practices

The Law Commission in England and the Scottish law Commission have released a joint report on the protection of consumers against misleading practices.

From the summary:
"We recommend new legislation to provide redress to consumers who experience
misleading and aggressive practices in their dealings with traders. Our aim is to
clarify and simplify the current law on misleading practices, and to improve the
law on aggressive practices by filling the gaps in the current law. We recommend targeted reform (...)"

"In particular, we recommend that :
  • (1) There must be a contract between the parties or a payment made by the consumer. Thus consumers would not, for example, be entitled to compensation if they visited a shop in response to a misleading advertisement but did not buy anything. Nor would consumers have a separate right to compensation for being misled about their rights.
  • (2) The consumer would only have a right against the other party to the contract, usually the retailer or service provider. The legislation would not provide additional rights against others in the supply chain, such as producers or against individual directors.
  • (3) The list of banned practices under the Regulations would not give rise to automatic redress; they would only be covered by the new right if they would affect an 'average consumer'.
  • (4) The general prohibition against commercial practices which are 'contrary to the requirements of professional diligence' should not give rise to redress. It is too uncertain.
  • (5) Land transactions and financial services should not be covered. Instead the existing law should remain."
The report also recommends two tiers of remedies for consumers under a new law:
"Tier 1remedies would be the standard remedies and would apply on a strict liability basis. The amount would be based on the price paid and would not require evidence of loss. This means they could be used in both the civil courts and alongside enforcement action, for example in criminal compensation orders. By contrast, Tier 2 remedies would apply only if the consumer proved additional loss;they would also be subject to the trader’s due diligence defence."

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posted by Michel-Adrien at 7:30 pm


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