Court of Justice on criteria for choice of dealer in selective system

The Court of Justice handed down judgment today in Case C-158/11, Auto 24 SARL v Jaguar Land Rover France SAS, a reference from the Cour de cassation. It's an important decision on the application of Regulation 1400/2002 which will remain relevant after the new rules come into force this time next year. While I read and digest the judgment, here's an extract from the press release to be going on with:

The present case concerns the quantitative selective distribution system established by Jaguar Land Rover France (JLR), which refused to appoint the French company Auto 24 as an authorised distributor of new Land Rover  motor vehicles in Périgueux (France).  JLR’s distribution system provided for the possibility of concluding 72 dealership agreements for 109 sites, set out in a table in which the town of Périgueux does not feature. 

Auto 24 brought an appeal before the Cour de cassation (France) seeking, in essence, compensation for the loss resulting from the refusal to appoint it as an authorised JLR distributor in Périgueux. That court asks the Court of Justice to interpret the term ‘specified criteria’ [found in Article 1(1)(f) of the block exemption]. In essence, the question is whether, in order to benefit from that regulation, a quantitative selective distribution system must be based on criteria which are objectively justified and applied in a uniform manner in respect of all applicants for authorisation. 

... [T]he Court explains that it refers to criteria whose precise content may  be verified. It states that  it is not necessary that the selection criteria used be published, at the risk  of compromising business secrets, or even facilitating possible collusive behaviour.  

The Court  points out that  the exemption regulation lays down distinct conditions for application according to  whether the system in question is classified as ‘quantitative selective distribution’ or ‘qualitative selective distribution’. Therefore, if, in the context of the regulation, the quantitative selection criteria had to be objective and non-discriminatory, that would result in a conflation of the conditions required by the regulation for the application of the exemption regulation to qualitative selective  distribution  systems and those required for the application of the exemption to quantitative selective distribution systems. 

Consequently, the Court's answer is that, in order to benefit from the exemption regulation, a quantitative selective distribution system must be based, inter alia, on criteria whose precise content may be verified, but it is not necessary for such a system to be based on criteria which are objectively justified and applied in a uniform and non-differentiated manner in respect of all applicants for authorisation. 

The emphasis is in the original.

American Honda appeal against damages for inaccurate fuel consumption information

Automotive News reports that American Honda are appealing against a decision of a small claims court in California which awarded a consumer $10,000 because it considered Honda's claims about fuel economy of the Civic to be in accurate. This despite a court earlier approving a class action settlement, under which about 200,000 customers received payouts and rebates off new cars. The plaintiff in the latest case, a lawyer, opted out of the class action to pursue her own claim. Another 1,700 consumers are doing likewise - hence Honda's need to appeal that judgment.

Update (courtesy of Nicholas Yapp, Davenport Lyons): Honda have won the appeal, and Mrs Peters has been ordered to pay $75. She has no right of appeal. The judgment is here.

Dealing with dealer disputes: the Canadian way

How dealers will be protected from the arbitrary exercise of manufacturers' market power is, of course, a key topic whenever one talks about the block exemption (and who doesn't?). Here's an interesting piece (and here's another) by Irvin Schein, a commercial litigator at Minden Gross LLP, about how such disputes are handled in Canada, where National Automobile Dealer Arbitration Program exists to deal with precisely that sort of thing.

It sets out rules which bind both parties once they adopt them by signing an implementation agreement, usually at the same time as signing the dealer agreement. Where there is a conflict between the program and the dealer agreement, the program explicitly takes precedence. Very similar in many ways to the much-vaunted code of good practice to be operated as a supplement to the block exemption. Make that codes of good practice, as it is unlikely that there'll be one agreed code.

The Canadian program is more than just procedural rules: it also contains substantive provisions. There's a long list of the sorts of disputes that will be covered, including refusals to renew a dealer agreement. So manufacturers and importers are obliged to renew, unless they have cause not to do so. Just as US dealers have their Day in Court Act, so Canadian ones have their day in arbitration.

Just what we need over here - some would say.

US car dealers sue Mahindra & Mahindra

Dealers from five states have filed a lawsuit against Indian company, accusing it of fraud, misrepresentation and conspiracy. They claim that they were misled into investing and promoting the brand before reneging on its promises to deliver vehicles. The manufacturer allegedly walked away with cash and trade secrets worth $60 million.

An action brought against the Indian company in Missouri failed a while ago, and arbitration proceedings in London brought by Global Vehicles, the company's US importer, were concluded in Mahindra's favour in February.

The FT has the story here, and the dealers' lawyers Diaz Reus & Targ have more in a press release on their website here.

Construction and use regulations amended

Nothing remarkable about that, but as I have noticed the amending SI (2012 No 1404) let me give you a heads up - not that it's terribly exciting:

Regulation 3 amends the definition of “the emissions publication” in Schedule 7B to the 1986 Regulations by referring to the most recent (seventeenth) edition of the Department for Transport publication entitled “In Service Exhaust Emission Standards for Road Vehicles” (ISBN 978-0-9549352-7-6). The publication contains in-use emissions limits that petrol-engined cars and light vans are required to meet for the purpose of MoT and roadside emissions tests. The publication updates information on new models of such vehicles which have come onto the market since the previous amending Regulations (S.I. 2010/2060) came into force on 9th September 2010. It also revises a small amount of data on existing models.

So it's all about making the link between the legislation and the latest edition of the publication. Perhaps the more important news is that there is a seventeenth edition, which you can find here.

Ford F-150: now the whole vehicle is being copied

According to examiner.com, which might not be the most reliable source of news in the world (but the story is elsewhere too), Ford's IP problems with the F-150 have not finished yet. First they had a spat with Ferrari over the designation of last season's formula 1 car (likelihood of confusion? but of course!) then there was GM's Superbowl TV commercial. And now a Chinese manufacturer, SAC, is alleged to have ripped off the design of the vehicle as a whole. It seems they have some form for doing so, and as Dave Musker told last year's Motor Law conference there are many Chinese vehicle designs that look suspiciously like other manufacturers' products.

It doesn't look to me too much like a slavish copy, though. The blue badge in the middle of the grille isn't very clever, admittedly, but the lines of the truck itself look distinctly different - and how much freedom does the designer of a pick-up actually have? It's a pretty generic-looking truck, to my eye. But Ford, I know, have their own ideas of what amounts to counterfeiting ... So far, although news of the vehicle has been out for a while, I've seen no report of Ford taking any action about it.

OFT to refer car insurance market to Competition Commission

And not before time, you might say. The Press Release can be read here if you want all the gory details. The OFT reckons that competition in the market is "dysfunctional", and although there's nothing in the legislation expressly outlawing dysfunctional competition (which might just be a trendy alternative to a boring but legally correct expression) it is pretty clear that there's something not right. Having carried out a market investigation, the OFT has decided that there are features of the market that restrict, distort or prevent competition, and as no quick fix can be identified it proposes to refer the matter to the Competition Commision.

The problems arise from the way that, after an accident, the not-at-fault driver's insurers are in the driving seat. This opens up all sorts of possibilities for brokers, credit hire organisations and repairers, to take advantage of this lack of control and generate revenues through rebates and referral fees. The result is inflated costs forinsurers of at-fault drivers. This, the OFT says, "is an inefficient way for the sector to operate, raising the total costs for providing private motor insurance which drivers end up paying." It reckons that it might be better if competition were based on the quality and value of the service provided to insurance companies' clients, not on trying to load costs onto the competition to make them put their rates up. And who can argue with that, if it's a fair summary of what's going on?