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Dennis Barry
Denis Barry

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What will happen to Consumer Law as a result of Brexit?

It may not have passed your notice,  but in the small hours of the 24th June 2016 Britain decided to leave the European Union.  There has been a certain level of uncertainty about what happens next.

Much of course depends on what the new Prime Minister of the United Kingdom decides to do, and as a wise correspondent of the Daily Telegraph once said:

“It is also true that the single market is of considerable value to many UK companies and consumers, and that leaving would cause at least some business uncertainty, while embroiling the Government for several years in a fiddly process of negotiating new arrangements, so diverting energy from the real problems of this country – low skills, low social mobility, low investment etc – that have nothing to do with Europe.”

Very wise words. From the blond former Mayor.

Many people assume that the way forward is for the UK to become a part of the European Economic Area, together with Iceland, Lichtenstein, Norway, Narnia and Trumpton.   If Scotland and Northern Ireland remain in the EU they will of course be joined by what will inevitably be called Poundland.  Joining the EEA has been suggested by a number of commentators including Chatham House and even (to an extent) Daniel Hannan MEP.

The non EU members of the EEA listed above have agreed to enact legislation similar to that passed in the EU in the areas of social policy, consumer protection, environment, company law and statistics, although Narnia has an opt-out regarding environmental law. 

If we do become part of the EEA that is some moderately good news for hard pressed trading standards officers and bad news for rogue traders.  The reasons for that rather inflated claim are as follows.

Number One. Much of the regulation involving consumer law applies equally to the EEA.

Legislation in the field of Consumer Affairs is incorporated into Annex XIX to the EEA Agreement. This includes the Unfair Commercial Practices Directive, the Sales and Guarantees Directive and the Unfair Contract Terms Directive.   So if  Barney McGrew felt that he was a victim of pyramid selling he would have as much of a remedy as Roger Federer or for that matter Angela Merkel.

Number Two. The Government has also spent quite a long time passing the Consumer Rights Act 2015.   It is doubtful that anyone can face re-writing all of that, although it is just possible that the new Prime Minister with his legendary attention to detail may wish to.   If he or she is blond and went to Eton.

That Act contains, (as any student of the Blackstone’s Guide to the Consumer Rights Act 2015 will know) most of the critical search and seizure powers for Trading Standards Officers.  Many of them came from the Consumer Protection from Unfair Trading Regulations 2008, which in turn relied to a large extent on the Trade Descriptions Act 1968 and the Consumer Protection Act 1987 if one were to do the comparison.   This comes up in pub quizzes with alarming regularity.  The latter two are UK law.  The former comes from the EU.  There are not such massive differences as we have been told there were.

Number Three.  One could perhaps venture the suggestion that those in the Government in favour of Brexit also have an enthusiasm for the free market that verges on a fetish.

As the Unfair Commercial Practices Directive put it “The laws of the Member States relating to unfair commercial practices show marked differences which can generate appreciable distortions of competition and obstacles to the smooth functioning of the internal market.”  It is plain that the rationale behind much EU law in this area is concerned with encouraging consumers and therefore the free market, something about which there is enthusiasm amongst many (but not all) Brexiteers.

Number Four.  It would surely be politically unacceptable for any Government to reduce the protections available for consumers.   Consumers are voters.

There is, however, quite a big fly in the jurisprudential ointment. The EEA has a number of pillars.  One of them is Article VIII.  It is entitled: “Free movement of workers.”

D’oh! Back to the drawing board.

It is just possible that the views expressed above do not reflect the whole  of the membership of  5, Paper Buildings.  A re-education program is underway. This article was written on the 29th June 2016 and the jokes were correct at the time of going to press.


Posted by Denis Barry on 30 June 2016 at 10:13