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New Consumer Protection Rules Adopted in the UK: Particular Note for Online Retailers and Suppliers of Digital Content

New Consumer Protection Rules Adopted in the UK: Particular Note for Online Retailers and Suppliers of Digital Content

Motor Law volume 13 number 11

Here are links to further information on some of the stories in the latest Motor Law:

OFT on consumer rights bill www.oft.gov.uk/shared_oft/reports/oft_response_to_consultations/OFT1502.pdf
TSI response http://www.tradingstandards.gov.uk/policy/policy-consitem.cfm/newsid/1297
www.oft.gov.uk/shared_oft/reports/oft_response_to_consultations/draft-cpr.pdf
www.oft.gov.uk/shared_oft/reports/oft_response_to_consultations/draft-consumer-contracts.pdf
Review of consumer protection co-operation http://ec.europa.eu/dgs/health_consumer/dgs_consultations/ca/consumer_protection_cooperation_regulation_201310_en.htm
Prize promotions http://www.cap.org.uk/News-reports/Media-Centre/2013/Promoting-our-promotions-guidance.aspx
'Made in EU' http://www.europeanvoice.com/article/imported/safety-claim-at-heart-of-tough-fight-over-made-in-eu-label/78575.aspx
The consequences of not mediating PGF II SA v OMFS Company 1 Ltd [2013] EWCA Civ 1288
Spain: price-fixing in car market http://www.cncompetencia.es/Inicio/GestionDocumental/tabid/76/Default.aspx?EntryId=198842&Command=Core_Download&Method=attachment
Lookers merger with Shields http://www.oft.gov.uk/OFTwork/mergers/Mergers_Cases/2013/Lookers
Parts supply: antitrust investigations http://www.automotiveworld.com/news-releases/nsk-plea-agreement-with-respect-to-bearings/, http://www.automotiveworld.com/news-releases/jtekt-plea-agreement-with-the-united-states-department-of-justice-concerning-certain-automotive-products/, http://www.autonews.com/article/20130924/OEM10/130929955/panasonic-executive-charged-with-price-fixing-on-toyota-components#axzz2fyjC6LHx, http://www.autonews.com/article/20130925/OEM10/309259967/magna-iac-faurecia-part-of-german-price-fixing-probe#axzz2fyjC6LHx
South Africa: no spares protection Bayerische Motoren Werker Aktiengesellschaft v Grandmark International (Pty) Ltd and Another (722/12) [2013] ZASCA 114
CO2: Germany wants transition http://www.europeanvoice.com/article/2013/september/germany-tries-new-objection-as-car-co2-vote-returns/78294.aspx
Commission's Daimler dilemma http://www.europeanvoice.com/article/imported/commission-faces-daimler-dilemma/78106.aspx
EU van emissions targets move forward http://ec.europa.eu/clima/policies/transport/vehicles/vans/
MEPs resist vehicle noise limits http://hy-tec.eu/2013/02/eu-parliament-votes-on-noise-level-of-motor-vehicles/
Restrictive covenants: wide but valid Coppage & Anor v Safety Net Security Ltd [2013] EWCA Civ 1176 (11 October 2013) http://www.bailii.org/ew/cases/EWCA/Civ/2013/1176.html
US: Ford Truck dealers http://www.bloomberg.com/news/2013-09-11/ford-didn-t-breach-truck-dealer-contracts-ohio-jury-says.html
CCTV for parking to be outlawed http://www.telegraph.co.uk/finance/newsbysector/transport/10337749/Councils-using-CCTV-cameras-to-fine-motorists-to-be-made-illegal-within-months.html
Persistent fuel thieves will be prosecuted http://www.telegraph.co.uk/news/uknews/crime/10357320/Legal-loophole-closed-to-prosecute-persistent-fuel-thieves.html
Compensation for breach of Data Protection Act Halliday v Creation Consumer Finance Ltd (CCF) [2013] EWCA Civ 333
Phoenix: report of disciplinary hearing http://www.frc.org.uk/News-and-Events/FRC-Press/Press/2013/September/FRC-publishes-Final-Report-of-Disciplinary-Hearing.aspx
Cooper Tire appeals merger ruling http://www.ft.com/cms/s/0/bac43520-4bb4-11e3-8203-00144feabdc0.html
 Case C95/ Commission v Germany (Volkswagen Law case) http://curia.europa.eu/juris/documents.jsf?num=C-95/12
Scrap Metal Dealers Act 2013 (Prescribed Documents and Information for Verification of Name and Address) Regulations 2013 (SI no 2276)  www.legislation.gov.uk/uksi/2013/2276/pdfs/uksi_20132276_en.pdf

Chancellor's financial statement

 Two matters of interest to Motor Law readers in today's financial statement from the Chancellor:

The statutory maximum price of the MOT test for a car will be frozen at £54.85 until 2015, a total saving of £50 million for motorists.

The paper tax disc will be abolished, removing an administrative inconvenience for millions of motorists.

BBC One - Watchdog - My Consumer Victory: Sale of Goods Act 1979

We all know that the Sale of Goods Act implies a condition that the quality of goods supplied will be “satisfactory”, and that this includes, in appropriate cases, that the goods will be durable. The standard the goods must meet is what “a reasonable person would regard as satisfactory, taking account of any description of the goods, the price (if relevant) and all the other relevant circumstances”. Of course, there's nothing there that would give you a cast-iron answer to every problem with a defective car, but since satisfactory quality replaced merchantable quality as the touchstone back in 1995 we haven't had the sort of tricky problems that used to trouble the courts. But what damages is the customer entitled to if a car doesn't meet the standard?In a case featured on BBC TV’s Watchdog recently (although dating back to 2009), a dealer was ordered to pay £1,175 in compensation and interest, plus £170 costs, to a customer whose 16 month old ex-demonstrator C4 Picasso broke down on a family holiday in France. The repair that would take weeks, and although Citroën agreed to pay for it, they would not meet the cost of a hire car to continue the holiday, the flights home, or the cost of returning to pick up the car when it had been repaired – what lawyers call consequential or indirect losses.
The customer sued in the county court, claiming that there was a breach of the warranty of satisfactory quality and seeking damages for the consequential losses. He argued that the gear linkage failure meant that the car was not durable enough to be of satisfactory quality, and the court agreed that it should have lasted longer than 16 months. The fact that the manufacturer had repaired the defect at its expense would not have amounted to an admission that there was a defect, although it might have been pretty strong evidence: in any case the claim under the Sale of Goods Act lay against the dealer who had sold the car to the customer, not the manufacturer with whom the customer did not have a contract.
It is well-established that where someone suffers consequential losses they can claim them from the person at fault, provided the losses are not too remote. This means that the court has to be satisfied that there was a strong possibility of the losses arising from the breach. In non-consumer contracts liability for these losses is commonly excluded, and in business-to-business transactions this makes a lot of sense – if a computer fails and brings a business to a grinding halt the consequential losses could be much more than the price of the computer. It is also generally reasonable to expect businesses to take precautions against equipment failures like that, and “reasonable” is exactly what the Unfair Contract Terms Act 1977 says it must be. But in a consumer contract, any attempt to limit or exclude liability would be prohibited by the 1977 Act, and void.
There have been several cases in which car-buyers have been awarded consequential damages, going back to the 1978 case Jackson v Chrysler Acceptances where the customer had specifically said the car was needed to go on holiday and the court awarded £75 when the holiday was spoilt, although the more important aspect of that case was the finding that if the camshaft, exhaust, radiator and clutch assembly all needed replacing within a few months the car, which was new, was not merchantable, and that continuing to pay HP instalments did not amount to acceptance. Consequential losses also featured in another great merchantable quality case, Bernstein v Pamsons Motors, in which Mr Bernstein was awarded £150 for a spoilt day out, “comprising nothing but vexation”.
A dealer who faces a claim from a consumer for something like a ruined holiday has little room for manoeuvre. The contract cannot limit or exclude the liability, and if the manufacturer has agreed to fix the problem free of charge it would be hard to argue that the car was of satisfactory quality. In the Picasso case, the consequential losses arose because the car could not be repaired quickly, and if you find yourself in that position it could be a lot cheaper to get hold of the part needed and get it to where the car is. The customer is also more likely to be happy if you've saved his family holiday.

The perils of naming a new model

Coming up with a name for a new model of car is a fraught business. An excellent website which I frequently enjoy reasing, Letters of Note, provides in epistolary form part of the process by which one notorious model name was arrived at: May I submit UTOPIAN TURTLETOP?

Accidents caused by uninsured drivers - elsewhere in the EU

Bloy v Motor Insurers' Bureau [2013] EWCA Civ 1543 (29 November 2013) is an eye-opening case for one who hasn't paid much attention to insurance law since finishing the Commercial Law paper in the Law Society's Part II examination - and that, if you know about these things, will give you an idea about how long ago it was. The claimants (Mrs Bloy was the injured party's mother and litigation friend, the other claimant her infant son) sued for damages for extensive personal injuries that occurred in a car accident in Lithuania in 2007. The other driver was a local, and was convicted of driving while under the influence of alcohol, or whatever words Lithuanian law uses ('influence' suggests something subtle and external, or involuntary, doesn't it? Shall we just say 'drunk'?). She was also uninsured. The claimants were both British citizens.

Under the motor insurance directives (details of which you can find in the judgment, if you feel the need) the MIB is responsible not only for picking up the pieces left when uninsured drivers in the UK hurt people, but also when British citizens are injured by uninsured drivers in other EU countries. That's logical, although I suppose not inevitable: the Directives could have done the opposite, making the Lithuanian MIB (the judgment tells us that there is one) responsible. But, consistent with other consumer-orientated legislation I suppose, the Directives chose to make the injured party's home MIB the responsible one.

The question in this case was, whose law applies? The Directives set minimum levels for compensation, which the (UK) MIB comfortably, and generously, exceeds: its Lithuanian oppo chooses not to. The MIB wanted the amount of compensation to be governed by Lithuanian law. The matter was dealt with, one might think conclusively, in the judgment of Moore-Bick LJ in Jacobs v Motor Insurers' Bureau [2010] EWCA Civ. 1208, [2011] 1 WLR 2609 - but the MIB sought to distinguish the present case from that judgment.

To cut quite a long story short, they received short shrift from the Court of Appeal, and instinctively I feel that must be the right answer. The compensation payable to the injured party should surely be at a level appropriate for his home country, not at the lower level that might apply in the country where the accident occurred.