The seismic shift in British politics signalled by the referendum decision on 23 June 2016 is likely to have far-reaching legislative consequences in the UK. In the event that the new Conservative government negotiates a ‘clean break’ from the EU (i.e. an arrangement not involving membership of the EEA), the UK will be faced with the prospect of regulatory reform on an unprecedented scale. At present, most areas of domestic law are influenced to some extent by EU legislation and some areas are wholly determined by it. In the areas currently most influenced by EU law, a ‘clean break’ scenario would raise many questions. Should the law be kept as it is? If not, what will take its place?
This article will consider the implications of a ‘clean break’ scenario on UK consumer law. By its very nature, consumer law affects more people more of the time than any other area of civil law. Beyond this, a consideration of UK consumer law is particularly relevant in the context of post-Brexit planning for two reasons. First, it is an area that is currently highly influenced by EU law and therefore serves as a good practical example of the sorts of challenges to be faced by lawmakers. Second, its broad scope, high public visibility, and control over a multitude of day-to-day transactions mean that swift legislative review will be necessary, as well as politically expedient for the government, following any ‘clean break.’
Although a temporary Act of Parliament incorporating all current EU regulation into domestic law could provide short-term stability while the process of reviewing the law is undertaken, decisions will eventually have to be made in many areas. A few of these areas are considered below.
Consumer Rights and Sale of Goods
The traditional approach to Sale of Goods Law in British jurisdictions did not automatically confer particular rights on consumers as a class. However, as a result of the Consumer Rights Directive, the current position is that UK Sale of Goods legislation is starkly divided between consumers and non-consumers. Consumers are given enhanced rights and afforded greater protection by the courts than commercial parties.
As practitioners in the area will know, dividing parties between consumers and non-consumers is often easier said than done. There will always be situations that fall somewhere between the two camps and categorisation can be difficult. In the worst instances, a degree of uncertainty is introduced into otherwise straightforward transactions. Rationalising this area should, therefore, be a priority.
The heart of the distinction is also ideological: how should freedom of contract be reconciled with social paternalism? The authors do not advocate a particular approach, but in a ‘clean break’ scenario the UK will be afforded the first opportunity in many years to determine the right answer to that question. It is an opportunity that should be seized.
The law relating to food (and in particular hygiene, safety, and the provision of information) is almost totally governed by EU law. The EU approach is marked by a dramatically different approach than was traditionally taken in the UK. In broad terms, this has led to a higher level of complexity and prescription than was previously the case.
Has the EU approach been beneficial? Without empirical evidence, it is difficult to analyse the efficacy of the approach. On the other hand, complex and prescriptive regulation is necessarily burdensome for traders. Consequently, it is suggested that a study should be undertaken to determine the efficacy of current food safety and hygiene law compared with that in other lighter regulation jurisdictions. An informed decision can then be taken as to whether the current level of regulation justifies the burden it places on traders.
A particular example of an area of food law that could benefit from urgent review – and one which would have a pronounced effect – relates to durability. At present, EU law dictates the terms of durability markings placed on food, such as use-by dates. It is notorious how much perfectly edible food is routinely thrown away because of this. Furthermore, EU law prevents retailers from giving such food away if the date has passed – regardless of the actual state of the food. Consumers, and in particular those who can ill-afford to do so, dispose of wholesome food on a huge scale even though many foods are safe well beyond their use-by dates. This is something which should be addressed.
The EU approach to consumer credit has undoubtedly complicated an area of law that should be consumer friendly. The Consumer Credit Directive excludes transactions over a certain sum of money and excludes credit secured on residential land (the latter now being dealt with by the Mortgage Credit Directive). EU law says little about consumer hire agreements and does not recognise hire-purchase. The result is consumer credit legislation where different regimes apply to the general bewilderment of many practitioners – let alone consumers.
To take an example, a consumer credit agreement or consumer hire agreement can fall within: (i) a regulatory regime dating from 1983 (and, if a bill of sale is involved, also from a regime introduced the century before last), (ii) the 2010 set of regulations where the Consumer Credit Directive applies, or (iii) the 2015 legislation intended to comply with the Mortgage Credit Directive.
There is no need for such complexity. Following a ‘clean break’, the current system should be abandoned and replaced with a single new Act.
Unfair Commercial Practices
The Unfair Commercial Practices Directive was incorporated into domestic law by the Consumer Protection from Unfair Trading Regulations 2008. The legislation has proven difficult to implement. Indeed, following the introduction of the 2008 Regulations, Trading Standards enforcement virtually came to a halt for a number of years due to the inability to tackle unfamiliar concepts and vague language.
Although much improvement has been made since the Regulations and the Directive remain problematic for practitioners and enforcers. What is a ‘commercial practice’? Can it relate to an isolated incident or must it involve a pattern of behaviour? These questions – and the chain of litigation that resulted from them – were made necessary by the vague language introduced into UK law by the Directive.
Previously, the Trade Descriptions Act 1968 had provided a workable piece of legislation dealing with similar issues. Having been in force for some 40 years, a substantial body of case law had developed around the Act providing certainty to consumers and traders – as well as a rich source of jurisprudence to the courts – which no longer exists. In a ‘clean break’ scenario, legislators would be well served to contrast the language of the 1968 Act with that employed in the 2008 Regulations.
Weights and Measures
One topic that has consistently proven emotive with the public is the choice of unit. Indeed, it has already been reported that some butchers are now offering their customers the opportunity to buy in pounds and ounces. Although perhaps not as pressing a concern as some others considered above, legislating in favour of imperial units of measurement over metric would present the government with an easy opportunity to win support from Brexiteers currently sceptical about the government’s commitment to the implementation of the referendum mandate.
From a regulatory point of view, there would be little difficulty in permitting domestic traders (particularly those selling meat, fruit, and vegetables) to choose between imperial and metric units. Exports to the EU would, of course, continue to be marked in metric units in compliance with EU legislation.
The above are only a few examples of areas that will require consideration. There are many others which will fall to be considered in the event of a ‘clean break.’ Such an exercise in legislative reform is unprecedented in UK history and is naturally daunting to many as a result. However, it also presents an unprecedented opportunity to reform the law for the better.