Comparative Consumer Sales Law

Geraint Howells, Christian Twigg-Flesner, Hans-W. Micklitz, Chen Lei

• Publisher: Taylor & Francis
• Year: 2017
• eBook ISBN: 9781317163176
• Edition: 1
• Topic: Law
• Subtopic: Corporate Law
• Index: Law

For many years, legislators around the world have responded to the particular needs of consumers by introducing dedicated rules for consumer sales contracts. In the European Union, a significant push came through the adoption of the Consumer Sales Directive (99/44/EC). Elsewhere in the world, legislation focusing on consumer sales contracts has been introduced, for example in New Zealand and Australia. This book offers a snapshot of the current state of consumer sales law in a range of jurisdictions around the globe. It provides both an overview of the law in selected jurisdictions and compares the application of these rules in the context of two case scenarios.

1
Consumer sales law in Australia

Gail Pearson

I. The Australian consumer market

The retail market for goods and services represents about 5% of gross domestic product (GDP) and employs about 10%.¹ Its relative importance is declining.² Food retailing is about 48% of the total, and household goods about 19%, followed by clothing and soft goods.³ These figures exclude cars, car parts and fuel. Households spend less on consumer goods and more on services such as eating out.⁴ After 2017, for the first time in 100 years, Australia will not have an automotive industry due to high cost manufacturing, and changing consumer preferences in a competitive market.⁵ The market for smartphones, tablets and apps is buoyant with a high take-up rate.⁶ The apps market is dominated by free and low cost apps, particularly social networking and weather apps, and the use of apps for smart appliances is growing.⁷

Retail is a multi-channel industry with bricks and mortar department stores, specialty stores, supermarkets and significant online distribution.⁸ Retail establishments correlate with population distribution.⁹ The impact of technology is significant,¹⁰ and online shopping continues to grow.¹¹ Most is domestic.¹² Online shoppers also buy internationally at lower prices as part of the global retail trade.¹³ Australia has more frequent online shoppers than some European countries, but fewer than the United Kingdom, United States, and Germany.¹⁴

Australia imports a high percentage of its retail items, including passenger cars.¹⁵ One of the problems is car recalls due to faulty airbags for the driver and front passenger.¹⁶ The market for apps is global. Australians download and buy apps from app stores or retail platforms provided by entities such as Apple and Google.¹⁷ More people download onto mobile phones than tablets, and significantly more free apps than paid apps.¹⁸ In-app promotion of further apps, particularly in games for children is a problem. Consumer sales problems as indicated by complaints data and advice contacts show problems with cars¹⁹ by contrast with confidence in apps (although not in mobile and broadband plans and billing).²⁰

II. Access to justice for consumers and enforcement of consumer law

Australia is a Federation, and the national consumer laws are administered in a multi-regulator framework.²¹ Federal and state agencies, including the Australian Competition and Consumer Commission (ACCC), Consumer Affairs Victoria, and NSW Fair Trading, all take the initiative in different matters. Victoria is leading a national campaign to identify which businesses receive most complaints²² and a recent New South Wales (NSW) law allows publication of such names.²³ The policy is public exposure as a form of reputational regulation similar to platform based ratings.²⁴ In online shopping, often the most effective form of consumer redress is a credit card chargeback. The project, led by Victoria, is to create nationally consistent information and guidance for the use of chargebacks.²⁵

Australian regulators are influenced by ‘responsive regulation’ which escalates from education and persuasion for compliance, through to prosecution. They aim to reduce consumer harm by engaging with business and providing accessible educational material on consumer rights. Some state regulators are more likely to take regulatory action such as requiring a supplier to substantiate claims, or an Undertaking from a supplier²⁶ than direct enforcement. The ACCC takes strategic enforcement action, but there have been few consumer guarantees cases and instead litigation to prevent misrepresentations about the consumer guarantees.²⁷ This means the scope of the new consumer guarantee law is being worked out first in Tribunals rather than superior Courts.

Consumers can seek justice by dealing directly with the retailer; making a complaint to an External Dispute Resolution (EDR) scheme; complaining to a regulatory agency; approaching an Administrative Tribunal, a lower Magistrates Court or County Court, or, depending on the size and type of claim, a higher state Court or the Federal Court.

Although EDR is well developed in certain sectors of the economy, there is no Retail Ombudsman. The Telecommunications Industry Ombudsman can take complaints about apps.²⁸ App stores themselves provide a consumer-regulatory system that filters quality with peer advice, recommendations and ratings.²⁹

The agencies, through websites, telephone call centres and regional offices,³⁰ encourage consumers to deal directly with the supplier to resolve a problem and then, if necessary, step in.³¹ NSW manages to resolve about 93% of complaints without resort to a Court or Tribunal.³² Cross-border complaints are directed towards the International Consumer Protection and Enforcement Network.³³

Many civil disputes involve consumer issues³⁴ and raise problems with inappropriate advisers and unmet legal needs.³⁵ Not all state jurisdictions have a civil and administrative Tribunal and in some states the appropriate forum is the Magistrates Court.³⁶ The NSW Civil and Administrative Tribunal (NCAT) has a Consumer and Commercial Division. It can hear consumer claims up to $40,000;³⁷ and is trialling online dispute resolution for consumer claims up to $5,000.³⁸ It is not bound by rules of evidence, nor is legal representation necessary.³⁹

There are differences between the Tribunals regarding appeals to the Court.⁴⁰ Tribunal and Court fees are not a barrier for most, but the cost of representation for Court is a problem as there is little legal aid for consumer disputes.⁴¹

III. The legal framework for consumer sales

The Competition and Consumer Act 2010 (Cth) (CCA) re-enacted the Trade Practices Act 1974 (Cth) and introduced changes in consumer protection rules. The Australian Consumer Law (ACL) is in Schedule 2 to the CCA. It applies to all sectors of the economy except financial services which are governed by other statutes.⁴² There is provision for extra territorial jurisdiction.⁴³

The structure of the ACL follows a conventional pattern of definitions followed by Parts for particular sets of protections. The following outlines this structure: Chapter 2, General Protections (misleading or deceptive conduct, unconscionable conduct and unfair contract terms provisions); Chapter 3, Specific Protections (including false representations, pyramid and other selling mechanisms, consumer guarantees and product safe provisions); Chapter 4, offenses; Chapter 5, Enforcement and Remedies.

Chapter 3.2 Division 1 contains the consumer guarantees. The consumer guarantees impose performance standards on a supply of goods to a consumer. In general, these require a supply ‘in trade or commerce’ to ‘a consumer’ that is not a sale by auction. There is a consumer if the value of the goods is $40,000 or less or if the goods are of a kind ordinarily used for personal, domestic or household purposes.⁴⁴ Neither instance applies if the goods were acquired for resupply or for using up or transforming them in trade or commerce.⁴⁵ The right of recovery is against the supplier. The guara...

Table of contents

• Cover
• Title
• Copyright
• Contents
• List of tables
• Notes on contributors
• Comparative consumer sales law – introduction
• 1 Consumer sales law in Australia
• 2 Consumer sales law in the European Union
• 3 Consumer sales law in Germany
• 4 Consumer sales law in Hong Kong
• 5 Consumer sales law in People’s Republic of China
• 6 Consumer sales law in New Zealand
• 7 Singapore consumer law
• 8 Consumer sales law in the United Kingdom
• 9 Consumer sales law in the United States
• 10 Consumer sales law in Vietnam
• Index