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BackConsumer and business organisations are still not happy with the EU proposal on a Common European Sales Law. During a hearing in the Legal Affairs Committee of the European Parliament, the Austrian Federal Chamber of Labour was for the first time given the opportunity to take an official position on some aspects of the Common European Sales Law. Not only the Chamber of Labour, but also representatives of UEAPME, the European Association of Craft, Small and Medium-sized Enterprises, as well as a French industry representative showed little enthusiasm for the approach chosen by the Commission, which brings no substantial added value to either consumers or businesses.
Wagner: the Common European Sales Law does not bring a consistently high level of consumer protection
In her opening statement, the expert of the Vienna Chamber of Labour, Alice Wagner made it clear that the Chamber of Labour would reject the text of the Common European Sales Law in the form proposed by the Commission. Unfortunately, the demand analysis, which had been carried out by the Commission, was to a large extent indecisive and sources had only been quoted selectively. Wagner cited the claim that 99 % of businesses would not engage in cross-border transactions because adjusting commercial contracts for 27 different national legal systems would be too expensive, as an example. However, in reality, in the quoted Eurobarometer survey only 10 % of entrepreneurs would name different legal systems as an obstacle for cross-border activities. 54 % did not regard this as an obstacle at all, said Wagner. The Chamber of Labour had fundamental concerns with regard to the so-called optional instrument. In practice, the trader would decide on concluding the contract with the consumer whether the national or the Common European Sales Law would apply. And in any case, business representatives would always choose the law, which would benefit them and not the consumers. More suitable would have been a harmonisation of the civil law, partly in form of full harmonisation and partly in form of minimum directives. Unfortunately, the Common European Sales Law was lacking a consistently high level of consumer protection, for example in respect of unfair terms or statute of limitation.
Remedial measures for consumers also need to be improved
Commenting on the main subject of the event, the issue of warranty, Alice Wagner said that this point would reflect the intention of the Commission to improve consumer protection. For example, the free choice between remedies of warranty and dispensing with an obligation to notify defects had to be welcomed. But there was also a need for improvement in respect of warranty: for example, the flexible commencement of the warranty period would create a certain legal uncertainty for consumers. As the warranty period would begin at the point where consumers should have been aware of a defect, it is not clear whether this also included a “control obligation” for consumers. Other legal remedies would also pose problems for consumers; for example avoidance on grounds of error. The trader had to be notified of an error; this was not required in Austria, informed AK expert Wagner. Austria’s regulation in respect of the right of retention was better than that provided by the Common European Sales Law. In Austria, if provided with a faulty product or service, consumers had the right to retain full payment until they received a faultless product or service. This was not the case under EU law, said the AK expert. It would also be desirable to provide for a longer period for the reversal of the burden of proof.
Criticism also by the representative of European small and medium enterprises
The expert of UEAPME, the European Association of Craft, Small and Medium-sized Enterprises, Dora Szentpaly-Kleis, showed little enthusiasm concerning the EU proposal on a Common European Sales Law by the Commission. UEAPME had hoped for full harmonisation; unfortunately, the Commission had decided in favour of the voluntary optional instrument. In respect of warranty, the UEAPME expert criticised the option of terminating the agreement among other. Termination of a contract should be the final resort. With regard to terminating the contract in case of non-fulfilment of the service, it had been stated that it would be possible to terminate the contract if the lack of conformity of the service or goods would be considerable. However, according to Szentpaly-Kleis it had not been defined what the term “considerable” would involve. Apart from that, consumers were not required to observe a limit for terminating a contract; hence, they were able to terminate a contract after a year, even if they had been aware of a fault right from the start, criticised the UEAPME expert.
French industry demands legal certainty and comprehensible rules
Anne-Laure Constanza, a French entrepreneur and representative of the French industry named the conditions, which were necessary for a Common European Sales Law to be accepted by SMEs: they had to result in a simplification and lower transaction costs; legal certainty would be essential. Such rules also had to be comprehensible for economic operators. A high level of consumer protection was alright; however, it should not place an excessive burden on businesses, said Anne-Laure Constanza. Unfortunately the rules in Annex I were not easily accessible and comprehensible. There were a number of subjective terms, which customers could interpret in different ways, and that was very dangerous for businesses. The free choice of remedies of warranty was a significant burden for businesses, which could entail high costs, commented the UEAPME expert. According to the Common European Sales Law, the right to terminate a contract would be one-sided. Buyers would be able to do this with ill intent and traders had no control over it.
Commission: only slight deterioration with regard to General Terms and Conditions in Austria
At the end of the event, Dirk Staudenmayer of the European Commission presented his opinion and reacted above all to the statements of the AK expert: he began by protesting against the criticism that the Common European Sales Law would not provide a consistently high level of consumer protection. As mentioned by Alice Wagner, the free choice of remedies of warranty was positive for consumers. According to the Commission, this would be a huge advantage compared to Austrian law. In respect to General Terms and Conditions, Austria’s regulations were only slightly better. With regard to the flexible commencement of the warranty period, the Commission would assume that there was no control obligation for consumers; the criticism voiced by the AK expert was therefore difficult to understand. Only one Member State had a period in respect of the reversal of the burden of proof, which was longer than 6 months; hence, the Commission did not see any need to extend it. Apart from that, the Commission would not abandon full harmonisation; it would be retained where necessary.
AK expert: Austrian consumers are faced with various aspects of deterioration
AK expert Wagner reacted immediately to the comments of the Commission: with regard to the flexible period it would be better to incorporate the mentioned advantage - i.e. that there was no control obligation for consumers - in the text. Apart from that, it would be no advantage for consumers if the issue of warranty was improved, if they were faced with other problems, for example in respect of contract terms but also regarding other issues, where Austrian law was far better for consumers than the proposal on a Common European Sales Law, said the AK expert Alice Wagner in her closing comments.
Another hearing in the Legal Affairs Committee shall follow in July. In September, the Committee on Internal Market and Consumer Protection, which is responsible for this dossier, will carry out a hearing. According to some MEPs, it is expected that the negotiations in the European Parliament will be complete at the end of the legislative period.
In her opening statement, the expert of the Vienna Chamber of Labour, Alice Wagner made it clear that the Chamber of Labour would reject the text of the Common European Sales Law in the form proposed by the Commission. Unfortunately, the demand analysis, which had been carried out by the Commission, was to a large extent indecisive and sources had only been quoted selectively. Wagner cited the claim that 99 % of businesses would not engage in cross-border transactions because adjusting commercial contracts for 27 different national legal systems would be too expensive, as an example. However, in reality, in the quoted Eurobarometer survey only 10 % of entrepreneurs would name different legal systems as an obstacle for cross-border activities. 54 % did not regard this as an obstacle at all, said Wagner. The Chamber of Labour had fundamental concerns with regard to the so-called optional instrument. In practice, the trader would decide on concluding the contract with the consumer whether the national or the Common European Sales Law would apply. And in any case, business representatives would always choose the law, which would benefit them and not the consumers. More suitable would have been a harmonisation of the civil law, partly in form of full harmonisation and partly in form of minimum directives. Unfortunately, the Common European Sales Law was lacking a consistently high level of consumer protection, for example in respect of unfair terms or statute of limitation.
Remedial measures for consumers also need to be improved
Commenting on the main subject of the event, the issue of warranty, Alice Wagner said that this point would reflect the intention of the Commission to improve consumer protection. For example, the free choice between remedies of warranty and dispensing with an obligation to notify defects had to be welcomed. But there was also a need for improvement in respect of warranty: for example, the flexible commencement of the warranty period would create a certain legal uncertainty for consumers. As the warranty period would begin at the point where consumers should have been aware of a defect, it is not clear whether this also included a “control obligation” for consumers. Other legal remedies would also pose problems for consumers; for example avoidance on grounds of error. The trader had to be notified of an error; this was not required in Austria, informed AK expert Wagner. Austria’s regulation in respect of the right of retention was better than that provided by the Common European Sales Law. In Austria, if provided with a faulty product or service, consumers had the right to retain full payment until they received a faultless product or service. This was not the case under EU law, said the AK expert. It would also be desirable to provide for a longer period for the reversal of the burden of proof.
Criticism also by the representative of European small and medium enterprises
The expert of UEAPME, the European Association of Craft, Small and Medium-sized Enterprises, Dora Szentpaly-Kleis, showed little enthusiasm concerning the EU proposal on a Common European Sales Law by the Commission. UEAPME had hoped for full harmonisation; unfortunately, the Commission had decided in favour of the voluntary optional instrument. In respect of warranty, the UEAPME expert criticised the option of terminating the agreement among other. Termination of a contract should be the final resort. With regard to terminating the contract in case of non-fulfilment of the service, it had been stated that it would be possible to terminate the contract if the lack of conformity of the service or goods would be considerable. However, according to Szentpaly-Kleis it had not been defined what the term “considerable” would involve. Apart from that, consumers were not required to observe a limit for terminating a contract; hence, they were able to terminate a contract after a year, even if they had been aware of a fault right from the start, criticised the UEAPME expert.
French industry demands legal certainty and comprehensible rules
Anne-Laure Constanza, a French entrepreneur and representative of the French industry named the conditions, which were necessary for a Common European Sales Law to be accepted by SMEs: they had to result in a simplification and lower transaction costs; legal certainty would be essential. Such rules also had to be comprehensible for economic operators. A high level of consumer protection was alright; however, it should not place an excessive burden on businesses, said Anne-Laure Constanza. Unfortunately the rules in Annex I were not easily accessible and comprehensible. There were a number of subjective terms, which customers could interpret in different ways, and that was very dangerous for businesses. The free choice of remedies of warranty was a significant burden for businesses, which could entail high costs, commented the UEAPME expert. According to the Common European Sales Law, the right to terminate a contract would be one-sided. Buyers would be able to do this with ill intent and traders had no control over it.
Commission: only slight deterioration with regard to General Terms and Conditions in Austria
At the end of the event, Dirk Staudenmayer of the European Commission presented his opinion and reacted above all to the statements of the AK expert: he began by protesting against the criticism that the Common European Sales Law would not provide a consistently high level of consumer protection. As mentioned by Alice Wagner, the free choice of remedies of warranty was positive for consumers. According to the Commission, this would be a huge advantage compared to Austrian law. In respect to General Terms and Conditions, Austria’s regulations were only slightly better. With regard to the flexible commencement of the warranty period, the Commission would assume that there was no control obligation for consumers; the criticism voiced by the AK expert was therefore difficult to understand. Only one Member State had a period in respect of the reversal of the burden of proof, which was longer than 6 months; hence, the Commission did not see any need to extend it. Apart from that, the Commission would not abandon full harmonisation; it would be retained where necessary.
AK expert: Austrian consumers are faced with various aspects of deterioration
AK expert Wagner reacted immediately to the comments of the Commission: with regard to the flexible period it would be better to incorporate the mentioned advantage - i.e. that there was no control obligation for consumers - in the text. Apart from that, it would be no advantage for consumers if the issue of warranty was improved, if they were faced with other problems, for example in respect of contract terms but also regarding other issues, where Austrian law was far better for consumers than the proposal on a Common European Sales Law, said the AK expert Alice Wagner in her closing comments.
Another hearing in the Legal Affairs Committee shall follow in July. In September, the Committee on Internal Market and Consumer Protection, which is responsible for this dossier, will carry out a hearing. According to some MEPs, it is expected that the negotiations in the European Parliament will be complete at the end of the legislative period.