Service Standards for Consumers The Legislative Framework

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Service Standards for Consumers The Legislative
Framework

• Graham Branton - BERR

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Better Regulation in a consumer context

• Simpler but wider law principles-based
• Fewer prescriptive and specific obligations
• More self regulation and ADR focus on industry
  best practice
• Ensure systems for complaint handling more
  analysis of consumer detriment
• More predictable enforcement based on consumer
  detriment information

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Example 1 - CPRs

• Repeals detailed provisions in 23 laws
• Introduces general principles
• Removes specific obligations e.g.
• Prescriptive rules about how information has to
  be given (eg in writing) and, in certain cases
  where it must be displayed, are being abolished.
• Businesses are no longer obliged to follow the
  guidance in the new Pricing Practices Guide
  provided their price indications are not
  misleading.
• Certain advertisements for special offers will no
  longer have to give the end date of the offer.
• Hotels will no longer be required to display room
  prices in a prominent position in the reception
  area
• Restaurants will no longer have to comply with
  very detailed rules as to the content of menus
  and where they must be displayed.

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CPRs (2)

• General prohibition on unfair commercial
  practices (a general duty not to trade
  unfairly)
• Prohibition on misleading practices (actions and
  omissions)
• Prohibition of aggressive practices
• Prohibition of practices contrary to the
  requirements of professional diligence
• There must be consumer detriment - except for 31
  banned practices in Annex (e.g. claiming to be
  signatory to Code of Conduct when not)

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Conduct effect
Conduct only
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CPRs (3)

• Concept of average versus vulnerable consumer
  to determine consumer detriment
• Enforcement through criminal and civil law by
  Trading Standards and OFT also established
  means
• Impact of RES bill on enforcement
• Law Commission looking at private enforcement
  through claims for damages

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Example 2 - CEAR

• Oblige energy and postal businesses to belong to
  a redress scheme for complaint resolution
• Enable energy and postal regulators to fix
  binding complaint-handling standards
• Require estate agents to sign up to an ombudsman
  scheme c.f. consumer credit
• New powers for OFT to investigate estate agent
  activity if necessary

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Wider European vision

• UCPD can be seen as one half of a future European
  Consumer Code
• The missing half would be rules to define
  consumer rights this will be addressed in the
  review of the consumer acquis
• EU law would be generalised and set a framework
  across all sectors. It would be largely
  future-proof.
• Enforcement would be co-ordinated across Europe,
  independently administered and focused on
  evolving consumer threats. It could be adjusted
  by sector to areas of greater consumer risk,
  informed by market analysis major role for
  self-regulation and industry standards.
• No need for new legislation to respond to each
  new consumer detriment.
• Large swathes of existing domestic and some
  European law could be repealed. Consumers would
  understand their rights much better and have more
  confidence to shop across borders. Businesses
  would face similar law and similar enforcement
  practice across entire EU.

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Domestic Vision - Consumer Law Review

• Our vision is a simpler and more flexible regime,
  which is easier for business and consumers to
  understand and to use and where
• the main elements of consumer law are set out
  clearly in a small number of principles
• better and more targeted information enables
  consumers to make effective choices, and doesnt
  impose unnecessary costs on them and on
  businesses
• constructive resolution of disputes is achieved
  through appropriate tools and incentives making
  it easier for consumers to get redress but, at
  the same time, reducing the burdens on business,
  and
• risk-based enforcement focuses attention on rogue
  traders wherever they operate, not on routine
  inspections

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Consumer Law Review (2)

• Main focus on 3 elements
• Simplification of Law e.g. supply of goods and
  services, weights and measures, consumer credit
• Empowerment of consumers and redress includes
  complaints mechanisms, ADRs and consumer rights
  to compensation
• Compliance and enforcement impact of RES,
  predictability and consistency, internet

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Implications for Standards

• Government preference for self regulation, is
  likely to continue
• Principle-based legislation links naturally to
  the elaboration of sector-specific codes of
  practice to apply principles to sectoral
  specificities
• Attempts to analyse consumer detriment will put
  pressure on sectors with low satisfaction to
  develop consumer-friendly initiatives
• CPRs will force enforcers to identify what
  constitutes professional diligence