Directive of the European Parliament and of the Council on Consumer Rights

1. Directive of the European Parliament and of the Council on Consumer Rights Liz Pope (liz.pope@prai.ie) Property Registration Authority (Ireland) ELRA Conference Tallinn 1st and 2nd December 2011

2. Directive • Amends Council Directive 93/13/EEC and 1999/44/EC • Repeals Council Directive 85/577/EEC [consumer protection re contracts negotiated away from business premises] and 97/7/EC [consumer protection in respect of distance contracts] • Why? Simplify/update the rules, close unwanted gaps and remove inconsistencies

3. Purpose • High level of consumer protection provided for Art 169(1) and 169(2) (TFEU) through measures adopted pursuant to Art 114 • Internal market without internal frontiers/free movement of goods and services • Right balance between consumer protection and competitiveness of enterprises • More fully exploit the cross border potential of distance selling

4. Without prejudices to national law in area of contract law not regulated by the Directive e.g. validity of a contract for lack of consent. • MS may maintain or introduce language requirements regarding information/terms • Not to affect national law on legal representation e.g. agent/trustee • Applies to all traders whether public or private

5. Some Definitions • Definition of consumer: natural person [persons who are acting outside their trade, business, craft or profession]. If dual purpose, if trade purpose not predominant, deemed to be consumer. • Digital content: data produced and supplied in digital form e.g. computer programmes, apps, games, music, videos or texts irrespective of means of access

6. Definitions cont’d • Distance Contract: contract is concluded between trader and consumer under organised distance sales or service provision scheme, with exclusive use of means of distance communication (e.g. mail order, Internet, fax, phone) up to an including time contract concluded. • Will cover e.g. consumer visits to a store for information but later purchases and concludes by distance. But, will not apply contract negotiated on business premises and finally concluded at distance, or where initiated by distance but concluded at business premises of the trader.

7. Definitions cont’d • Off-premises contract: concluded in physical presence of both trader and consumer in a place not business premises of the trader (e.g. consumer’s home or workplace) • Business premises: whatever form servers as usual place of business of trader (widely interpreted) • Apply to contacts relating to the supply of utilities

8. Scope of the Directive • Directive concerns contract concluded between traders and consumers. It should not affect national law in contracts relating to employment, succession rights, family law, incorporation of companies or partnership agreements • Establishes rules on information to be provided for distance contracts, off premises contracts and contracts other than off premises contracts. Regulates right of withdrawal • Without prejudice to Rome 1 • Information requirements to complete those of 2006/123/EC on services in internal market and 2003/31/EC on legal aspects of information society services and electronic commerce • Member States should be free to decide to extend the provisions to areas not falling within its scope

9. Immovable Property [Article 3 (3)(e), Recital 26] Not applicable: • to contracts related to the transfer of immovable property or rights thereto • Contracts relating to the creation or acquisition of immovable property • Contracts for construction of new buildings or substantial conversion of existing buildings • Rental accommodation for residential purposes • May relate to property yet to be developed Already subject to specific requirements in national legislation. Outside the scope of this Directive. However, service contracts relating to construction of annexes like a veranda or garage and to those related to repair and renovation other than substantial conversion are included in its scope as are contacts relating to the supply of services a real estate agent and to contracts relating to rental of non-residential accommodation

10. Other exclusions • MS may decide not to apply where goods/services minor value n/e €50 • Social services excluded • Healthcare special regulations due to complexity excluded • Gambling excluded • Does not apply to consumer financial services, package travel and timeshare • Obligation to inform in advance re deposit such as block on credit card • Information to be provided mandatory and not to be altered.

11. Right of withdrawal • Distance, can’t see the goods, should have right of withdrawal. Opportunity to test and inspect. • Obligation at start to inform if any delivery restrictions and means of payment • Consumer fully read and understand main elements before placing order • Existing varying lengths of withdrawal period between MS causing uncertainty and compliance cost. Same period to apply [14 days from date of conclusion of contract, sales 14 days after consumer acquires physical possession of goods or if in stages, from date of last delivery]. Calendar days [Council Reg. No. 1182/71] • If trader fails to inform consumer, withdrawal period to be extended. • Consumer should remain free to withdraw in his own words once statement unequivocal, burden of proof lies with the consumer • Should be option of web based withdrawal form • Trader to reimburse all payments inc expenses of delivery borne by consumer. • Consumer to return not later than 14 days after informing trader of decision to withdraw

12. Right of withdrawal • Right to withdraw not appropriate in certain circumstances depending on nature of goods/services • Should not apply to goods made specifically to order • Main cause dispute concerns delivery (damage, late or partial), should remain subject to national law • Sales contracts, if no alternative agreement not later than 30 days from date of conclusion • Trader prohibited from charging consumers fees that exceed cost borne by trader for certain means of payment

13. Consumer protected against any risk of damage or loss to goods occurring before he has physical possession • MS to lay down penalties for infringement of the Directive (effective, proportionate and dissuasive) • Consumers to be aware of rights at point of sale • Consumer exempted form obligation to pay for any unsolicited goods or services

14. Implications of registration of title Articles 3 and 26 Not applicable for creation acquisition or transfer of immovable property or rights therein Or for construction new builds, substantial conversion, or rental of residential accommodation However does apply to non substantial conversions and non residential rentals so may have implications for those contracts which are dealt with as distance contracts and for therefore for Registrars who investigate contracts prior to effecting registration

15. Summary-top ten benefits consumers • Eliminate hidden charges and cost • Increased price transparency • Banning pre-ticked boxes on websites • 14 days change mind • Improved refund rights • EU wide model withdrawal form • Eliminates surcharges credit cards • Clearer info on who pays for returned goods • Better consumer protection • Common rules for businesses, easier to trade EU

16. The End Thank you