Are you familiar with consumer protection law in Lithuania or Romania? What 
about Spain or Greece?
This may be a new requirement of EU legislation, which SmallBizPod highlights today – and could have a significant impact on small businesses who trade online.
In a nutshell, it is all very well if you’re a multinational with an international legal department, but quite a different matter if you’re a sole trader, eBay entrepreneur or small business trading online and find you must understand and comply with consumer legislation in 27 different member states.
Let’s nip this this ridiculous proposal in the bud – and soon. The regulation is to be decided by the European Parliament and Council of Ministers. It’s therefore vital that the issue is raised with MEPs, please contact your local MEP now, and further advice is available from the Federation of Small Business.
‘Are you familiar with consumer protection law in Lithuania or Romania? What about Spain or Greece?’ (Ellee)
I think you’re missing the point. The new regulations propose that disputes over consumer contracts be dealt with under the jurisdiction of the member state the consumer is resident in.
Consumer law is going to be harmonised thoughout the EU on 12th December 2007 by the implementation of the Unfair Commercial Practices Directive. The Trade Descriptions Act, Part 3 of the Consumer Protection Act and over a dozen other pieces of UK consumer protection legislation are about to go out of the window anyway and be replaced by subjective EU wide legislation.
Yes, I do know about EU Consumer Protection law, I will admit, however, that I do not know anything about Lithuanian or Romanian contract law.
Surely the whole point of the EU is to harmonise business and consumer regulations across the whole of the European Union.
This is a difficult one. Either we centralise all laws in this case to a central European Court or we allow member states to tailor the regulations to their own laws.
I think the sensible thing to do would be to pass a set of common regulations by which EU traderes had to obide by, and then if these regulations are broken … the individual can take the company to their home court.
Harmonising contract law would be a big step to take. It’s developed over hundreds of years, it would be a huge, almost unfathomable change to make.
David, Steven
I think the first sensible thing is to give business people the freedom to do as they will (as long as it’s legal, honest, decent and truthful)
The second thing is to get out of the profoundly undemocratic, vile, illiberal, mendacious EU.
Steven_L,
Yes, this is the major problem with the EU as it is today… so many competing laws and nuances. As a believer in a European Common Market, it would make sense to allow small businesses to advertise and compete equally in Spain and Bulgaria over the internet.
But being against European Centralisation, I wouldn’t like to see a European Court take even more powers away from – like you say – hundreds of years of law development… countries have unique laws and heritages for a reason.
It’s quite a conundrum …
As originator of the post that Ellee links to, I thought I’d chip in. Agreed if consumer legislation is harmonised across the EU ahead of amendments to Rome I, then there is no issue for small businesses. This is how the EU should work.
Problem is many would see the application of Directives as uneven across the EU and national laws remaining to muddy the waters.
Steven, does the Commercial Practices Directive replace all consumer-based legislation in the UK and across the EU? If so, can business owners be sure the Directive will in reality be applied equally and in the same way across each member state?
‘As a believer in a European Common Market, it would make sense to allow small businesses to advertise and compete equally in Spain and Bulgaria over the internet.’ (Jeremy Jacobs)
This was the idea behind the Unfair Commercial Practices Directive. Product Safety laws are already harmonised. Now they are harmonsiing fair trading laws, this will happen in a few months time. Unfair terms in consumer contracts are already harmonised, but no-one has ever tried to harmonise contract law itself.
To be honest I don’t think they need to go that far at all. Let business negotiate terms with business on an individual basis and choose the jurisdiction of their contract. With consumer contracts all they have to do is set out some basic implied terms like we already do with the Sale of Goods Act and the Supply of Goods and Services Act.
This way consumers all over the EU would have easy to understand common rights regarding defective or misdescribed products and business would have a simple set of rules to adjust to. The proposal to allow consumers to claim in their country of origin effective might mean that UK courts are obliged to enforce orders from other member states in the remit of business to consumer contracts.
‘Steven, does the Commercial Practices Directive replace all consumer-based legislation in the UK and across the EU? If so, can business owners be sure the Directive will in reality be applied equally and in the same way across each member state?’ (Alex Bellinger)
It provides for maximum harmonisation of fair trading laws. There are some exceptions such as immovable property, financial services, precious metals (hallmarking) and (topically) contract law.
Of course it won’t be applied ‘equally’ in each member state, nor will it be applied ‘equally’ in each local authority area in the UK. The legislation will effectively be the same in each member state, however it will be enforced differently. In Spain, for example, consumer protection authorities operate on a regional basis and rather than take criminal prosecutions take civil injunctions against offending traders, often ordering them to cease trading for a period of months or years. Rogue traders then just up and move to a different region – lind of like crack-heads and ASBO’s if you like.
Here in the UK we tend to use criminal prosecution. This can also be ineffective at deterring rogue traders who make more money from their scams than the fines they receive. It is very rare they get sent to prison.
One of the biggest gripes UK industry has about product safety legislation is that some member states just put it on a shelf and forget about it. The same will no doubt happen in some member states with new fair trading laws.
I’m surprised there hasn’t been much media fuss about the Unfair Commerial Practices Directive however, it’s the biggest shake up to fair trading law in 40 years.
yawn
Yawn indeed … but I’ve always thought that’s exactly how the EU ends up passing dodgy legislation. Nobody can be bothered to get past its inherent tedium!
I’m with jeremy on his first comment- and also the second!
Really? I wouldn’t be at all fussed if we left the EU myself. I think it would result in a better standard of living for the majority of people, but hurt big business.
As for the bit he said about ‘honest, decent, truthful’ you’d have a job applying subjective principals like that to traders through legislation. A lot of people would say porn is not ‘decent’, or that price conditioning used by salespeople is not ‘truthful’. As for ‘honest’, what would happen to newspapers?
Its this sort of reason that Big Business has been happy to suck up to NuLabour. More regulation strangles small companies first. Just as the outrageous abuse of patient laws tries to do.