Batt O'Keeffe (Cork North West, Fianna Fail)
Link to this: Individually | In context

There have been significant developments in relation to the proposed Directive since my last reply to the House on this question on 2 December 2010. In that reply, I stated that intensive discussions were proceeding under the Belgian Presidency in advance of the Competitiveness Council on 10 December with a view to achieving a final resolution of the outstanding issues. In the light of those discussions, the Belgian Presidency proposed the deletion of Chapters IV (consumer sales and guarantees) and V (unfair contract terms) of the proposal on the grounds that it was impossible to find a qualified majority among the Member States for the full harmonisation of these Chapters. In the Presidency's view, there was limited added value for either businesses or consumers in these Chapters without full harmonisation, while their transposition would involve a legislative burden for national authorities.

The Presidency approach secured agreement at COREPER on 8 December on a qualified majority vote basis. It was agreed at Competitiveness Council on 10 December that the text of the proposed Directive revised in accordance with the agreed approach would be submitted for formal adoption to the Environment Council on 20 December. In the event, it is now to be submitted to the Agriculture Council on 24 January. The proposal is to be considered next by the European Parliament. The Committee on Legal Affairs [JURI] is scheduled to vote on it on 20 January and the Committee on Internal Market and Consumer Protection [IMCO] to do so on 26 January. The proposal is expected to be discussed by the European Parliament in plenary session in March, and the Hungarian Presidency will seek to reach agreement with the Parliament at the first reading.

As agreement had previously been reached on the deletion of Chapter II on consumer information, the decision reached at Council has effectively reduced the substance of the Directive to Chapter III on information and withdrawal rights for distance and off-premises contracts. It is to be renamed accordingly 'Proposal for a Directive on Consumer Rights in Distance and Off-Premises Contracts'. In view of the deletion of Chapters IV and V of the proposal, it is proposed that the existing minimum harmonisation Directives on consumer sales and guarantees and unfair contract terms respectively will remain in force.

As I indicated in my previous replies on this issue, the concerns about the impact of the proposed Directive on Irish consumer rights centred mainly on its provisions on consumer remedies for faulty goods and, in particular, on their implications for what is known as the right to reject. By this is meant the right to return faulty goods, obtain a refund of the price, and, in so doing, to terminate the contract. A fully harmonised provision along the lines originally proposed would have meant that the right to reject would be a remedy of second rather than first resort for faulty goods. If the Presidency approach is approved by the European Parliament, the proposed deletion of Chapter IV will result in the retention of the existing minimum harmonisation regime. As a result, the concerns expressed about the impact of the proposed Directive on the right to reject and on related matters such as the reduction in the liability period for faulty goods would no longer apply.

In this event, the provisions of the proposed Directive on distance and off-premises contracts will apply on a full harmonisation basis. The impact of the full harmonisation status of these provisions on Irish consumer legislation is limited, however, by the fact that the domestic Regulations which give effect to the existing minimum harmonisation Directives on distance and off-premises contracts did not make use of their minimum harmonisation basis to add additional protective measures. The proposed Directive also provides for the exclusion of a number of sectors from its scope (property; the construction and substantial conversion of new buildings; financial services; passenger transport services; social services; healthcare services; and gambling), and as a result Member States will retain legislative autonomy in respect of the regulation of distance and off-premises contracts in these sectors.

The minimum harmonisation basis of the consumer information rules under the Services and E-Commerce Directives will also be unaffected by the proposed Directive, and Member States will still be permitted to impose additional pre-contractual information requirements in the framework of both Directives even where these apply to distance and off-premises contracts.