Consumer rights in the balance

Today, the international consumer mo-vement commemorates World Con- sumer Rights Day. Malta, like other countries, does its bit in organising activities promoting public awareness about consumer rights and obligations. This year March 15 comes at a crucial moment in the relatively short history of consumer rights in Malta.

In recent years, Malta has made significant progress in the realm of consumer protection. There remain some significant gaps, notably with regard to measures relating to services - especially after-sales services, home loans and other credit protection issues. We certainly cannot rest on our laurels. However, the focus of this contribution is not on new measures that should be introduced - that will be a subject for future contributions - but on recent developments in consumer protection in the EU to the extent that consumer rights advocates are actually having to defend what has been gained to date.

The EU has without any doubt been a significant factor in the empowerment of consumers in Malta for at least the past 15 years. Since Malta joined the EU in 2004 - and, to some extent, before - EU consumer protection law has been one of the determining factors if not the determining factor in shaping Maltese consumer law.

To date, the influence of EU consumer law has, for the most part, been beneficial in ensuring the introduction under Maltese law of various provisions granting rights to consumers in areas ranging from distance selling to sale of goods. The impact of EU law has to date definitely been decisively positive for consumers in Malta.

However, this beneficial impact of EU consumer law may be reversed if a proposal by Brussels for a directive on consumer rights is approved in its present form. Until some years ago, the EU's approach to making consumer protection-related directives was one of minimum harmonisation.

This meant that member states (Malta included) were, when implementing under national law the provisions of the different consumer-related directives, allowed to include measures that went beyond what the directive stipulated, provided such measures catered for more extensive protection for consumers. This was the norm until at least the mid-2000s.

There was however a change of direction by the EU with the Unfair Commercial Practices Directive in 2005 and later with the new Consumer Credit Directive with both directives being maximum harmonisation directives.

This meant that, unlike in previous consumer-related directives, member states could not generally introduce measures beyond those listed in the directives even if these measures provided for more wide ranging measures to protect consumers.

This approach is again reflected in the proposed consumer rights directive, which proposes to regulate various key subjects including the use of unfair terms, sale of goods to consumers and distance selling. The main justification of the EU in adopting such an approach is, in the words of the Commission, "to contribute to the better functioning of the business-to-consumer internal market by enhancing consumer confidence in the internal market and reducing business reluctance to trader cross-border".

The overall objective is to minimise the fragmentation of different measures in the member states thereby leading to more certainty through such maximum harmonisation directives.

In doing so the EU claims that the measures included in these maximum harmonisation directives aim at a high degree of consumer protection.

However, in reality, if the proposed directive is approved in its present form it will mean that various member states, including Malta, will have to revise certain provisions of their existing consumer laws to the detriment of consumers. In Malta's case at least three instances come to mind.

The first relates to the broader definition of "consumer" under Maltese law whereby protection is also extended to individuals who are not the immediate purchasers or beneficiaries of the good or service purchased (the classical example being recipients of gifts).

The second instance relates to unfair terms, whereby under Maltese law protection is extended to all instances including those involving so-called individually-negotiated terms.

The final instance relates to the choice of remedies that a consumer has in the case of lack of conformity when purchasing a good. The EU proposal now envisages that in the first instance it will be the trader who determines what remedy the consumer has if there is a lack of conformity.

The Maltese consumer association has already signalled its concern about the negative impact that some of the measures in the proposed directive will have on Maltese consumers. It is also communicating its concerns to the Maltese MEPs given that the directive is before the European Parliament.

This contribution reflects only the author's views.

Dr Micallef is a member of the Consumers' Association.