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Thursday, 19 May 2011

Refunding deposits - or not

What happens if a deposit has been put down but the deal does not go through? Normally, you'd expect that if it were because the customer had changed his mind he'd forfeit the deposit, and if it were because the dealer wasn't able to supply the car the deposit would be returned.
There's no law directly on the point, although where there's a credit deal involved the Consumer Credit Act does say that customer's right to withdraw includes the right to have the deposit returned. Speculators got their fingers burned back in the late eighties when the Jaguar XJ220 lost a lot of its expected value between them putting down deposits and delivery being due. Eventually 25 of them bought themselves out of their contracts for £100,000 each, including the £50,000 deposit, rather than risk the loss of some £200,000 at market prices.
The Unfair Terms in Consumer Contracts Regulations also apply, and the OFT used its powers under them back in 2001 to require a dealer to delete a clause that purported to make the deposit non-refundable in any circumstances. A year later, the OFT insisted that the RMI change its standard retail order forms which said deposits would be forfeit if the customer did not complete within 14 days of the car being ready for collection. It had to be changed to 21 days, and to permit the dealer only to retain enough to cover its costs - the rest of the deposit would have to be refunded.
This is an area where what the contract says is the crucial thing. The law does not tell you how a deposit works - although dealers must not ignore the fact that the OFT has power to require changes to be made if the contract is unreasonable.

Monday, 16 May 2011

Copyright protection for car parts in Belgium

Benelux legal firm Nauta Dutilh has successfully represented two large French carmakers (I wonder who they could be?) in claims before the Court of Appeal, Mons, concerning infringement of copyright in spare parts. The firm's report of the matter is available here.

There's a short report of the case in the latest edition of Motor Law, so I will confine myself firstly to giving some additional information here, for which I am grateful to the lawyer who acted for the car makers, Philippe Péters. The case involved underlying artistic copyright works, not some sort of copyright in the design itself, and the designs were for visible car parts - body panels, mirrors, lights, bumpers and the like.

Secondly, the point about the presumption of ownership mentioned in the Motor Law report is also interesting. No such presumption would arise in English law, and the copyright would remain with the parts makers - except that there would be no copyright in the parts to begin with. However, our unregistered design right would probably give protection (if the designs qualified and were sufficiently original, which appears to be the case from what the court said) and if the designs had been commissioned the rights would belong to the commissioner - a very different situation from that pertaining under copyright law.

It's also worth observing that the designs directive says that designs can also be eligible for copyright protection to designs, but doesn't do anything to harmonise that copyright protection. The extent of copyright protection, and the conditions on which such protection is available, are for each of the Member States to decide for themselves. So a design can have extensive copyright protection in Belgium and no copyright protection worth speaking of here (although it will enjoy, of that's the right word, the brief protection of that fair weather umbrella, unregistered design).

Friday, 13 May 2011

March/April 2011 Motor Law newsletter

The latest edition of the Newsletter will be on its way to subscribers very shortly. It's full of the latest legal happenings affecting the industry, including:

  • Payment protection insurance - the Competition Commission's order;
  • Facebook being used to serve a court order;
  • No confusion between “ca” figurative mark and earlier KA marks for vehicles
  • Combine harvester design invalid 
  • Belgium: copyright law protects spares
  • Germany: independent garage cannot use VM’s logoOFT launches
  • market study into extended warranties
  • Turkey: Competition Board fines car and CV businesses over cartel
  • China: Car Resale Price Maintenance complaint
  • Fair dismissal for inappropriate comments on Facebook

The list of contents is on the website.

Saturday, 7 May 2011

Turkey: Competition Board fines car and CV businesses over cartel

Turkey's Competition Board recently concluded its investigations in the Turkish motor vehicles sector and imposed record fines, according to an article on Mondaq (free subscription) by Gönenç Gürkaynak of ELIG, Attorneys-at-Law, who  represented Mercedes-Benz Türk A.Ş.

The Authority launched an investigation against 23 passenger car and light commercial vehicle companies in September 2009, suspecting that a cartel was being operated contrary to the Competition Law. The  undertakings it investigated were suspected of having discussed future pricing policies, stock data, sales targets and sales strategies. 

The Board decided that the investigated undertakings violated Article 4 of the Competition Law (in similar terms to Article 101 of the Treaty on the Functioning of the European Union and Chapter 1 of the UK's Competition Act 1998) and imposed financial penalties on 15 undertakings, totalling approximately 277 million TL. This is by far the largest amount of fine that has ever been imposed by the Board.

Thursday, 5 May 2011

Fair dismissal for inappropriate comments made on Facebook

In Preece v JD Wetherspoons plc ET2104806/10 (24 April), an employment tribunal decided that a pub manager had been fairly dismissed for gross misconduct having made inappropriate and offensive comments on Facebook about some of her customers who had been abusive to her and who had been barred as a result. The comments were posted while was was still at work rather than in her spare time, and the Tribunal's reasoning suggests that it might have made a  difference if she had done it from home. She acknowledged that it was in breach of the employer's e-mail and internet policy, but argued that she believed her privacy settings restricted the number of people who could read the comments to 40 or 50. She also raised in mitigation the abuse she had suffered from the customers, who were mentioned by their forenames so her friends knew who they were.

The Tribunal found the company had passed each stage of the test laid down in the leading case of BHS v Burchell [1978] IRLR 379.
  • The company genuinely believed that Miss Preece had committed an act of gross misconduct;
  • It  had reasonable grounds to sustain its belief, with clear evidence that Miss Preece had entered into a Facebook conversation in which she made abusive comments regarding customers who could be identified by name;
  • It had carried out an investigation in to the matter that was reasonable in all the circumstances, and the enquiry and investigation was fair;
  • It was not for the Tribunal to substitute what it would have done in the circumstances in place of the action taken by the company. It was not relevant that this was a case where the Tribunal may have been more inclined to issue a final written warning. The Tribunal decided that dismissal was within the range of reasonable responses in view of the damage to the employer’s reputation.
Although this is only an Employment Tribunal decision, and therefore not a binding precedent, employers will be relieved to know that what employees do in social media can be considered sufficiently proximate to their employment to justify action for gross misconduct.

The fact that the employer's email policy was certain and clear, and that the employee had known it, was important here. As in other areas where legal risks have to be dealt with, employers must not only ensure that their staff know the rules (especially when they form part of a voluminous staff handbook or something similar) but that there is evidence to show that they do - that they have been told at an induction session, perhaps, or that there has been training on the topic and the employee signed the attendance sheet.