Consumer protection - 10 year strategy consultation document

The UK government has issued a Consultation Document Extending Competitive Markets: Empowered Consumers, Successful Business in which the Department of Trade and Industry (DTI) sets out its aims and broad proposals for "a strategy to empower consumers and support business success" for the next 5 - 10 years. Comments are requested by 31 October 2004.

The DTI notes that it has strengthened the UK's competition regime, giving the Office of Fair Trading (OFT) significantly enhanced powers. It has also strengthened protection for consumers, giving them a powerful voice through "supercomplaint" procedures for consumer bodies to report problem markets to the OFT. The DTI now puts forward a range of proposals, which include a number that are significant from the perspective of the wider context of dispute resolution, access to justice, and extension of consumer protection, that have implications in relation to the compensation and liability climate. In particular:

• Improve UK redress mechanisms (making it easier for business and consumers to resolve complaints). The DTI will consider expanding the range of civil remedies, consolidating enforcement powers into one statute, and amending the balance between civil and criminal consumer law. The scope may also include business-to-business transactions in addition to business-to-consumer transactions
• Introducing representative actions, where designated consumer bodies could bring court actions on behalf of groups of consumers. This proposal would involve a significant extension of the powers of consumer bodies, and was withdrawn after it was proposed some three years ago by the Lord Chamberlain's Department. It is interesting that the DTI's own recent research (Comparative Report on Consumer Policy Regimes, DTI, October 2003) shows that provision of funding to consumer groups to take legal action generally results in only marginal involvement by such bodies as they are wary of the potential costs to themselves of launching litigation. Thus begs questions as to whether the government may insulate such bodies from cost consequences when they fail, or whether such mechanisms are in fact useful
• Coordinating enforcement arrangements, with closer collaboration of local authorities across the country
• A national first point of contact for consumers, which will refer consumers to high quality specialist advice and redress services, called Consumer Direct. There may be a website that brings together information on individual traders and their records, such as convictions, enforcement notices, or advertising code breaches
• The recently proposed EU Directive on Unfair Commercial Practices is viewed as providing an opportunity for the UK to review its piecemeal consumer protection legislation (there are currently some 65 Acts and 27 statutory instruments), and to introduce a new flexible legal framework, based on broad principles, such as a duty to act fairly
• Make it easier for consumers' money to be returned to them if a trader has been found by a court to have acted illegally
• Rationalising the law relating to the safety, sale and supply of goods and services into one instrument, together with new provisions relating to safety of services.