Unfair Practices
Cases
Carrefour Hypermarches (Judgment)
[2017] EUECJ C-562/15
Consideration of the questions referred
18 By its three questions, which should be considered together, the referring court asks, in essence, whether Article 4(a) and (c) of Directive 2006/114 must be interpreted as meaning that advertising, such as that at issue in the main proceedings, which compares the prices of products sold in shops having different sizes or formats is unlawful. Furthermore, the referring court is unsure whether the fact that the shops whose prices are being compared are of different sizes or formats constitutes material information, within the meaning of Article 7(1) and (2) of Directive 2005/29, to which Article 4(a) of Directive 2006/114 refers, and, where relevant, what degree and what medium of communication that information must have.
19 It should be noted that Directive 2006/114 codifies Council Directive 84/450/EEC of 10 September 1984 concerning misleading and comparative advertising (OJ 1984 L 250, p. 17), which, after having been amended on several occasions, was repealed and replaced by Directive 2006/114, with the result that the Court’s case-law on the interpretation of Directive 84/450 is fully applicable to situations covered by Directive 2006/114.
20 Accordingly, it should be noted that Directive 2006/114 carries out an exhaustive harmonisation of the conditions under which comparative advertising in Member States might be permitted and that such harmonisation implies by its nature that the lawfulness of comparative advertising throughout the European Union is to be assessed solely in the light of the criteria laid down by the European Union legislature (judgments of 8 April 2003, Pippig Augenoptik, C-44/01, EU:C:2003:205, paragraph 44, and of 18 November 2010, Lidl, C-159/09, EU:C:2010:696, paragraph 22).
21 Furthermore, according to settled case-law of the Court, since comparative advertising contributes to demonstrating, in an objective manner, the advantages of various comparable goods and thus to stimulating competition between suppliers of goods and services to the consumer’s advantage, the conditions to be met for such advertising must be interpreted in the sense most favourable to that advertising, while ensuring at the same time that comparative advertising is not used anticompetitively and unfairly or in a manner which affects adversely the interests of consumers (see, to that effect, judgments of 25 October 2001, Toshiba Europe, C-112/99, EU:C:2001:566, paragraphs 36 and 37; of 19 September 2006, Lidl Belgium, C-356/04, EU:C:2006:585, paragraph 22; and of 18 November 2010, Lidl, C-159/09, EU:C:2010:696, paragraphs 20 and 21 and the case-law cited).
22 However, on the one hand, Article 4 of Directive 2006/114 does not require the format or size of the shops selling the goods whose prices are being compared to be similar and, on the other hand, a comparison of the prices of comparable products sold in shops of different formats and sizes, in itself, is likely to contribute to the achievement of the objectives of comparative advertising referred to in the preceding paragraph of this judgment and does not undermine fair competition or the interests of consumers.
23 That being said, advertising which compares the price of products sold in shops of different sizes or formats cannot be regarded as permitted, within the meaning of Article 4 of Directive 2006/114, unless all of the conditions laid down in that article are satisfied.
24 In particular, such advertising must compare prices objectively and must not be misleading.
25 It follows from Article 4(c) of Directive 2006/114 that the prices must be compared objectively (see, to that effect, judgment of 19 September 2006, Lidl Belgium, C-356/04, EU:C:2006:585, paragraph 45).
26 However, in certain circumstances the difference in size or format of the shops in which the prices being compared by the advertiser have been identified may distort the objectivity of the comparison. This may be the case where the advertiser and the competitors whose prices have been identified belong to retail chains which each have a range of shops of different sizes and formats and where the advertiser compares the prices charged in shops in its retail chain having larger sizes and formats with those identified in shops having smaller sizes and formats in competing retail chains, without that fact appearing in the advertising.
27 As observed by the Advocate General in points 43 and 57 of his Opinion, the prices of consumer products are likely to vary according to the format or size of the shop, with the result that an asymmetric comparison of that kind may have the effect of artificially creating or increasing the difference between the advertiser’s prices and the prices of competitors, depending on the selection of the shops used in the comparison.
28 However, Article 4(a) of Directive 2006/114 requires comparative advertising not to be misleading, within the meaning of Article 2(b) of that directive or of Articles 6 and 7 of Directive 2005/29.
29 It is apparent from those provisions that comparative advertising will be misleading if it may in any way, either by action or omission, deceive the consumers to whom it is addressed and affect the economic behaviour of those consumers or, for those reasons, adversely affect a competitor. Advertising will, therefore, be misleading under, inter alia, Article 4(a) of Directive 2006/114, read in conjunction with Article 7(1) and (2) of Directive 2005/29, if it omits material information that the average consumer requires, according to the context, in order to take an informed transactional decision or if it hides such information or provides it in an unclear, unintelligible, ambiguous or untimely manner and which consequently may cause the average consumer to take a transactional decision that he would not have taken otherwise.
30 While Directive 2005/29 does not define the concept of ‘material information’, it is nevertheless apparent from Article 7(1) and (2) of that directive that information which the average consumer requires, according to the context, in order to take an informed transactional decision and the omission of which, therefore, may cause that consumer to take a transactional decision that he would not have taken otherwise is ‘material’.
31 It is for national courts to ascertain, in the light of the circumstances of each particular case, whether, bearing in mind the consumers to whom it is addressed, advertising may be misleading (see, to that effect, judgments of 18 November 2010, Lidl, C-159/09, EU:C:2010:696, paragraph 46 and the case-law cited, and of 12 May 2011, Ving Sverige, C-122/10, EU:C:2011:299, paragraph 51). In order to do that, national courts must, first, take into account the perception of an average consumer of the goods or services being advertised who is reasonably well informed and reasonably observant and circumspect and, secondly, take account of all the relevant factors in the case, having regard, as follows from Article 3 of Directive 2006/114, to the information contained in the advertisement at issue and, more generally, to all of its features (see, to that effect, judgment of 18 November 2010, Lidl, C-159/09, EU:C:2010:696, paragraphs 47 and 48 and the case-law cited).
32 In the present case, advertising in which the advertiser, with a view to comparing the prices of products sold in its shops with those of products sold in competitors’ shops, uses, on the one hand, the prices charged in shops having larger sizes or formats in its retail chain and, on the other hand, the prices charged in shops having smaller sizes or formats in the retail chains of competitors, whereas each of those retail chains contains a range of shops of different sizes and formats, is liable to deceive the average consumer by giving that consumer the impression that all the shops forming part of those retail chains have been taken into consideration in making the comparison and that the price differences indicated are valid for all the shops in each chain irrespective of their size or format, whereas, for the reasons set out in paragraph 27 of the present judgment, that is not necessarily the case.
33 That advertising is liable to influence the economic behaviour of the consumer by causing him to take a decision in the mistaken belief that he will benefit from the price differences claimed in the advertising when buying the products concerned in all the shops in the advertiser’s retail chain rather than in shops belonging to the competing retail chains.
34 It follows that such advertising is liable to be misleading within the meaning of Article 4(a) of Directive 2006/114.
35 That will not be the case, however, if the consumer is informed that the advertising in question compares the prices charged in shops having larger sizes or formats in the advertiser’s retail chain with the prices displayed in shops having smaller sizes or formats in the retail chains of competitors, since the consumer will then know that it is only when buying the products concerned in the shops having larger sizes or formats in the advertiser’s retail chain that he can benefit from the price differences claimed in the advertising. Consequently, that information, in the context of such advertising comparing the prices charged in shops forming part of retail chains each possessing a range of shops of different sizes and formats, is necessary to enable the consumer to take an informed decision to buy the products concerned in the advertiser’s shops rather than in competitors’ shops and not to take a decision to purchase which he would not otherwise have taken. Therefore, the issue in this context is one of material information, within the meaning of Article 7(1) and (2) of Directive 2005/29.
36 It follows from the foregoing considerations that advertising, such as that at issue in the main proceedings, comparing the prices of products sold in shops having different sizes or formats is liable, where those shops are part of retail chains each having a range of shops having different sizes and formats and the advertiser compares the prices charged in shops having larger sizes or formats in its retail chain with those displayed in shops having smaller sizes or formats belonging to a competing retail chain, not to comply with the requirement that there be an objective comparison under Article 4(c) of Directive 2006/114 and to be misleading, within the meaning of Article 4(a) of that directive, unless consumers are informed that the comparison was made between prices charged in shops having larger sizes or formats in the advertiser’s retail chain with those displayed in shops having smaller sizes or formats in competitors’ retail chains.
37 Concerning the question of the degree to which such material information must be communicated, and by what medium this must be done, it should be noted that Directive 2005/29 does not contain any specific details in that regard. Nevertheless, it is apparent, first, from Article 7(2) of that directive that material information cannot be hidden or provided in an unclear, unintelligible, ambiguous or untimely manner and, secondly, from Article 7(1) and (3) of that directive that, in order to assess whether information has been omitted, account must be taken of the limitations of the communication medium used and, where that medium imposes limits of space or time, any measures taken by the trader to make the information available to consumers by other means.
38 With regard to advertising such as that at issue in the main proceedings, it follows from the foregoing considerations that the information on the basis of which the comparison was made between the prices charged in shops having larger sizes or formats in the advertiser’s retail chain and those displayed in shops having smaller sizes or formats in competitors’ retail chains is information in the absence of which it is highly likely that the advertising would fail to fulfil the objective comparison requirement and would be misleading. Therefore, that information must not only be provided clearly but, as the Advocate General stated in points 75 to 79 of his Opinion, be contained in the advertisement itself.
39 It is for the referring court to ascertain whether, in the case in the main proceedings, in the light of the circumstances of the case, the advertising at issue fails to meet the objective comparison requirement and is misleading, taking into consideration the information referred to in paragraph 31 of the present judgment, in particular the indications given in the advertising itself concerning shops in the advertiser’s retail chain and those in the retail chains of competitors whose prices have been compared, that information being relevant for the purpose of assessing both the objectivity of the comparison and whether that advertising is misleading.
40 Having regard to all of the foregoing considerations, the answer to the questions referred is as follows:
– Article 4(a) and (c) of Directive 2006/114, read in conjunction with Article 7(1) to (3) of Directive 2005/29, must be interpreted as meaning that advertising, such as that at issue in the main proceedings, which compares the prices of products sold in shops having different sizes or formats, where those shops are part of retail chains each of which includes a range of shops having different sizes or formats and where the advertiser compares the prices charged in shops having larger sizes or formats in its retail chain with those displayed in shops with smaller sizes or formats in the retail chains of competitors, is liable to be unlawful, within the meaning of Article 4(a) and (c) of Directive 2006/114, unless consumers are informed clearly and in the advertisement itself that the comparison was made between the prices charged in shops in the advertiser’s retail chain having larger sizes or formats and those indicated in the shops of competing retail chains having smaller sizes or formats.
– It is for the referring court, in order to assess the lawfulness of such advertising, to ascertain whether, in the case in the main proceedings, in the light of the circumstances of the present case, the advertising at issue satisfies the objective comparison requirement and/or is misleading, first, by taking into consideration the average consumer of the products in question who is reasonably well informed and reasonably observant and circumspect and, secondly, by taking into account the information contained in that advertising, in particular the information concerning the shops in the advertiser’s retail chain and those in the retail chains of competitors whose prices have been compared and, more generally, all of the elements in that advertising.
On those grounds, the Court (Second Chamber) hereby rules:
Article 4(a) and (c) of Directive 2006/114/EC of the European Parliament and of the Council of 12 December 2006 concerning misleading and comparative advertising, read in conjunction with Article 7(1) to (3) of Directive 2005/29/EC of the European Parliament and Council of 11 May 2005 concerning unfair business-to-consumer commercial practices in the internal market and amending Council Directive 84/450/EEC, Directives 97/7/EC, 98/27/EC and 2002/65/EC of the European Parliament and of the Council, and Regulation (EC) No 2006/2004 of the European Parliament and of the Council (‘Unfair Commercial Practices Directive’), must be interpreted as meaning that advertising, such as that at issue in the main proceedings, which compares the prices of products sold in shops having different sizes or formats, where those shops are part of retail chains each of which includes a range of shops having different sizes or formats and where the advertiser compares the prices charged in shops having larger sizes or formats in its retail chain with those displayed in shops having smaller sizes or formats in the retail chains of competitors, is liable to be unlawful, within the meaning of Article 4(a) and (c) of Directive 2006/114, unless consumers are informed clearly and in the advertisement itself that the comparison was made between the prices charged in shops in the advertiser’s retail chain having larger sizes or formats and those indicated in the shops of competing retail chains having smaller sizes or formats.
It is for the referring court, in order to assess the lawfulness of such advertising, to ascertain whether, in the case in the main proceedings, in the light of the circumstances of the present case, the advertising at issue satisfies the objective comparison requirement and/or is misleading, first, by taking into consideration the average consumer of the products in question who is reasonably well informed and reasonably observant and circumspect and, secondly, by taking into account the information contained in that advertising, in particular the information concerning the shops in the advertiser’s retail chain and those in the retail chains of competitors whose prices have been compared and, more generally, all of the elements in that advertising.
Untoy -v- GE Capital Woodchester Ltd (t/a GE Money)
[2015] IEHC 557
O’Malley J
The Consumer Protection Act 2007
56. This Act implements the Unfair Commercial Practices Directive (Directive 2005/29/EC). A “commercial practice” is defined as
“any conduct (whether an act or omission), course of conduct or representation by the trader in relation to a consumer transaction, including any such conduct or representation made or engaged in before, during or after the consumer transaction”.
57. Section 41 of the Act prohibits unfair commercial practices in the following terms:
(1) A trader shall not engage in an unfair commercial practice.
(2) A commercial practice is unfair if it-
(a) is contrary to one or both of the following (the requirements of professional diligence):
(i) the general principle of good faith in the trader’s field of activity;
(ii) the standard of skill and care that the trader may reasonably be expected to exercise in respect of consumers,
and
(b) would be likely to –
(i) cause appreciable impairment of the average consumer’s ability to make an informed choice in relation to the product concerned, and
(ii) cause the average consumer to make a transactional decision that the average consumer would not otherwise make.
(3) In determining whether a commercial practice is unfair under subsection (2), the commercial practice shall be considered in its factual context, taking account of all of its features and the circumstances.
58. Section 42(1) provides that a trader shall not engage in a “misleading commercial practice”. This concept is expanded upon in ss. 43 to 46. Section 43(2) defines it in part as follows:
“A commercial practice is misleading if it would be likely to cause the average consumer to be deceived or misled in relation to any matter set out in subsection (3) and to make a transactional decision that the average consumer would not otherwise make.”
59. Section 43(3) sets out a lengthy list of matters covered by the “misleading practice” concept. The plaintiff relies on s.43(3) (b) (iv) (the characteristics of a product, including its benefits or fitness for purpose); s.43(3)(c) (the price of the product, the manner in which that price is calculated or the existence or nature of a specific price advantage); s. 43(3)(f) (the identity of the trader, including its affiliation or connection with others); s.43(3)(g) (the extent of the trader’s commitments) and s.43(3)(h) (the trader’s motives for the commercial practice).
60. Subsection (4) of s.43 provides that if the misleading commercial practice involves the provision of information, it is not a defence in any proceeding to show that the information is correct.
61. To engage in a misleading practice as described in s. 43(1) or (2) is an offence.
62. Section 46(1) provides further definition as follows:
“A commercial practice is misleading if the trader omits or conceals material information that the average consumer would need, in the context, to make an informed transactional decision (“material information”) and such practice would be likely to cause the average consumer to make a transactional decision that the average consumer would not otherwise make.”
63. Subsection (3) lists certain types of information that are to be considered as “material”. Subsection (4) stipulates that:
“The material information set out in subsection (3) is in addition to and not instead of any other information that the trader is required by law to provide to a consumer, including, without limitation, any information required to be provided by regulations under this Act.”
64. The plaintiff says that the defendant failed to provide material information about its relationship with the insurer and the commission earned on the sale.
65. Section 74 (2) provides to a consumer who is aggrieved by a prohibited act or practice a right of action for damages, which may include exemplary damages, against the trader. (By virtue of subs.(1), a “prohibited act or practice” does not include a misleading commercial practice described in s.45. However, this latter provision is not relied upon in the instant case).
The disclosure of commission
66. The plaintiff submits that the level of commission, particularly where it is substantial, has a bearing on the assessment of the fairness of the relationship. Its disclosure would alert prospective consumers to the motivation of the intermediary, and whether it was putting its own financial interests ahead of those of the consumer.
67. As mentioned above, reliance is placed on Plevin v Paragon Personal Finance Ltd.
68. Before considering this authority, it is necessary to put it in context. Sections 140A and 140B of the Consumer Credit Act 1974 (as added in 2006) permit a court in the United Kingdom to reopen a credit agreement if it determines that the relationship between the creditor and the debtor is “unfair to the debtor” having regard a list of factors. The court is given discretion to order inter alia the repayment of any sum paid to the creditor. After the list of potential factors to be considered, s.140A(1)(c) refers to a general consideration of
“any other thing done (or not done) by, or on behalf of, the creditor”.
69. It must be noted that the legislation provides that, if a debtor asserts that a contract was unfair, it is for the creditor to prove that it was not.
70. The Insurance Mediation Directive does not require the disclosure of commissions. The ICOB rules in operation at the time did require such disclosure, but only in limited circumstances involving commercial customers. It was noted in Plevin that this was a considered policy on the part of the Financial Services Authority.
71. At p. 635 of Plevin Lord Sumption summarised the then leading authority on the issue as follows:
“The current leading case on the relationship between section 140A and the ICOB rules is the decision of the Court of Appeal in Harrison v Black Horse Ltd [2012] Lloyd’s Rep IR 521. The Court of Appeal considered an application by a borrower under section 140A to recover the single premium paid on a PPI policy sold with a loan. There was no credit broker involved. The borrower dealt directly with the lender, who acted as an intermediary with the insurer. The commission taken by the lender was 87%. Tomlinson LJ, delivering the only reasoned judgment, described this level of commission as “quite startling”, adding that there would be “many who would regard it as unacceptable conduct on the part of lending institutions to have profited in this way”. But he declined to find that the relationship was thereby rendered unfair, because the lender had committed no breach of the ICOB rules either in charging the commission or in failing to disclose it. At para 58, he said:
“…the touchstone must in my view be the standard imposed by the regulatory authorities pursuant to their statutory duties, not resort to a visceral instinct that the relevant conduct is beyond the Pale. In that regard it is clear that the ICOB regime, after due consultation and consideration, does not require the disclosure of the receipt of commission. It would be an anomalous result if a lender was obliged to disclose receipt of a commission in order to escape a finding of unfairness under section 140A of the Act but yet not obliged to disclose it pursuant to the statutorily imposed regulatory framework under which it operates.”
72. Lord Sumption went on:
“The result of this decision was that in the present case both the Recorder and the Court of Appeal were bound to dismiss Mrs Plevin’s claim so far as it was based on non-disclosure of the commission. The Court of Appeal expressed dismay at this outcome. In my opinion, the dismay was justified. I think that Harrison was wrongly decided.
The view which a court takes of the fairness or unfairness of a debtor-creditor relationship may legitimately be influenced by the standard of commercial conduct reasonably to be expected of the creditor. The ICOB rules are some evidence of what that standard is. But they cannot be determinative of the question posed by section 140A, because they are doing different things. The fundamental difference is that the ICOB rules impose obligations on insurers and insurance intermediaries. Section 140A, by comparison, does not impose any obligation and is not concerned with the question whether the creditor or anyone else is in breach of a duty. It is concerned with the question whether the creditor’s relationship with the debtor was unfair. It may be unfair for a variety of reasons, which do not have to involve a breach of duty. There are other differences, which flow from this. The ICOB rules impose a minimum standard of conduct applicable in a wide range of situations, enforceable by action and sounding in damages. Section 140A introduces a broader test of fairness applied to the particular debtor-creditor relationship, which may lead to the transaction being reopened as a matter of judicial discretion. The standard of conduct required of practitioners by the ICOB rules is laid down in advance by the Financial Services Authority (now the Financial Conduct Authority), whereas the standard of fairness in a debtor-creditor relationship is a matter for the court, on which it must make its own assessment. Most of the ICOB rules, including those relating to the disclosure of commission, impose hard-edged requirements, whereas the question of fairness involves a large element of forensic judgment. It follows that the question whether the debtor-creditor relationship is fair cannot be the same as the question whether the creditor has complied with the ICOB rules, and the facts which may be relevant to answer it are manifestly different. An altogether wider range of considerations may be relevant to the fairness of the relationship, most of which would not be relevant to the application of the rules. They include the characteristics of the borrower, her sophistication or vulnerability, the facts which she could reasonably be expected to know or assume, the range of choices available to her, and the degree to which the creditor was or should have been aware of these matters.
I turn therefore to the question whether the non-disclosure of the commissions payable out of Mrs Plevin’s PPI premium made her relationship with Paragon unfair. In my opinion, it did. A sufficiently extreme inequality of knowledge and understanding is a classic source of unfairness in any relationship between a creditor and a non-commercial debtor. It is a question of degree. Mrs Plevin must be taken to have known that some commission would be payable to intermediaries out of the premium before it reached the insurer. The fact was stated in the FISA borrowers’ guide and, given that she was not paying LLP for their services, there was no other way that they could have been remunerated. But at some point commissions may become so large that the relationship cannot be regarded as fair if the customer is kept in ignorance. At what point is difficult to say, but wherever the tipping point may lie the commissions paid in this case are a long way beyond it. Mrs Plevin’s evidence, as recorded by the Recorder, was that if she had known that 71.8% of the premium would be paid out in commissions, she would have “certainly questioned this.” I do not find that evidence surprising. The information was of critical relevance. Of course, had she shopped around, she would not necessarily have got better terms. As the Competition Commission’s report suggests, this was not a competitive market. But Mrs Plevin did not have to take PPI at all. Any reasonable person in her position who was told that more than two thirds of the premium was going to intermediaries, would be bound to question whether the insurance represented value for money, and whether it was a sensible transaction to enter into. The fact that she was left in ignorance in my opinion made the relationship unfair.
The next question is whether that state of affairs arose from something done or not done by or on behalf of Paragon…
…On that footing, I think it clear that the unfairness which arose from the non-disclosure of the amount of the commissions was the responsibility of Paragon. Paragon were the only party who must necessarily have known the size of both commissions. They could have disclosed them to Mrs Plevin. Given its significance for her decision, I consider that in the interests of fairness it would have been reasonable to expect them to do so. Had they done so this particular source of unfairness would have been removed because Mrs Plevin would then have been able to make a properly informed judgment about the value of the PPI policy. This is sufficiently demonstrated by her evidence that she would have questioned the commissions if she had known about them, even if the evidence does not establish what decision she would ultimately have made.”
73. Mr. Moran accepts, of course, that the statutory context is different to that pertaining in this jurisdiction. However, he relies on the Court’s analysis of the importance of the information to the customer.
The defendant’s case
74. As noted above, the defendants object to the form of the case stated. They also object to each question raised as being framed in overly vague or general terms, and/or as raising matters that were not argued in the District Court, and/or as raising matters that are not in dispute, and/or as raising issues that are moot.
75. It is submitted that some of the issues could not be determined in the absence of evidence, and that it was incumbent on the plaintiff to call evidence on such matters. This argument is made in relation to the assertion on behalf of the plaintiff that advice should have been given – there was no evidence as to what such advice might have been. It is also made in respect of the question about available options, on the basis that no evidence was adduced as to what the available options were. The range of options is publicly available. Such evidence, from a witness with knowledge of the market, would be required before a court could reach any determination.
76. Similarly it is contended that, where there is an allegation of breach of a duty of care, a plaintiff would be expected to call evidence as to what is to be expected of an intermediary. No such evidence was adduced.
The submissions on the questions
Questions (i) and (ii) (whether an insurance intermediary owes the customer any duty of care, and if so what duty is owed; whether the duty is affected by the relationship between intermediary and underwriter; whether the duty is affected by the customer’s status as a consumer)
77. Mr. Moran points to the acceptance by the defendants that they have a duty to act honestly and in good faith, fairly and professionally in the best interests of the customer and to act with due skill, care and diligence in the best interests of the customer.
78. Mr. McCullough says that these questions are phrased at such a level of generality as to be, in effect, unanswerable and that they do not arise from the factual findings made by the trial judge. There was no evidence before the District Court as to what advice was or should have been given.
79. However it is accepted that insurance intermediaries are governed by the 2005 Regulations. It is further accepted that they have to comply with certain general principles under the consumer Protection Code, including the duty to act honestly, fairly and professionally in the best interests of the customer, and to act with due skill, care and diligence to the same end. Quoting from Breslin, Banking Law (Third ed. 2013) at 6-20, it is said that the Code
“effectively imposes a duty of care on the bank to provide sufficient information to its customers so that the customer is in a position to make an informed choice as to the contract options open to it.”
80. It is submitted that the Code is “one of the factors which informs the duty of care owed by an insurance intermediary to a customer.” Other factors will, it is said, vary from case to case.
81. The defendant denies that the relationship between the intermediary and the underwriter is a factor affecting or informing the duty of care, and objects to this aspect of the question on the basis that it was not raised in the District Court. The status of the customer as a consumer affects the duty, in so far as the intermediary is bound to comply with the Consumer Protection Code in selling financial products to consumers.
Questions (iii) and (iv) (whether an intermediary is under a positive obligation to advise a customer, and whether an intermediary is under an obligation to assess suitability in relation to payment protection insurance)
82. Counsel for the plaintiff submits that the answer to both questions is “Yes”. He says that the acceptance by the plaintiff in cross-examination that the product sold to him was suitable is irrelevant and does not amount to a discharge of the defendants’ duty. The obligation to advise is, he suggests, probably not distinct from the obligation to assess suitability.
83. Again, the defendants say that these questions are too vague and general to be of assistance. It is submitted that no suggestion has been made as to the source, content or extent of such obligations.
84. It is also submitted that they do not arise out of the factual findings of the District Court, given the plaintiff’s acceptance that the PPI products sold to him were suitable for him and that he was eligible to benefit from them.
85. Without prejudice to the foregoing, the defendant says that an intermediary is not under a positive obligation to advise a customer in relation to the sale of PPI.
86. However, it is accepted that the Consumer Protection Code and the Regulations require the intermediary to carry out a “customer fact find” and to provide the customer with a product suitability statement.
87. It is further accepted that the Code (Ch. 2, 24 – 31) and Regulation 19(7) require a regulated entity to gather sufficient information from the consumer to enable it to make a recommendation for a product or service suitable to that consumer. The level of information gathered should be appropriate to the nature and complexity of the product being provided.
88. Mr. McCullough submits that these provisions do not require an intermediary to assess suitability of the range of products across the market as a whole.
89. The defendant says that since PPI is a relatively simple product, it is deemed to be suitable for the customer if the customer is deemed to be eligible to purchase it.
Question (v) (whether an intermediary is under a positive obligation to inform a customer of the available options; whether such an obligation could be affected by letters of appointment held by the intermediary)
90. It is submitted by Mr. Moran that the duty to act openly, honestly and fairly and in the customer’s best interests means that the intermediary is obliged to present all of the available options and make a recommendation on the most suitable. He says that it is clear on the evidence, including the letter from the defendants, that they had conducted no assessment of the plaintiff’s employment status and had not recommended the most suitable option.
91. Mr. McCullough again says that the question is too vague and was not considered in the District Court. It does not arise, given the plaintiff’s acceptance that the PPI products purchased by him were suitable. It is further submitted that, in the absence of any evidence that there were other, more suitable options available that might have been better for the plaintiff, it would not be possible to find that there had been a breach of such a duty and that damage flowed from it.
Question (vi) (what material facts, if any, must be brought to the attention of the customer in relation to payment protection insurance)
92. Mr. Moran says that the customer must be informed of anything that might have a material affect on his or her assessment of the transaction, including the nature of the relationship between an intermediary and an underwriter (including levels of commission); the options available to the customer; an explanation as to suitability and the reasons why the product recommended is the most suitable. All of this information should be placed in the context of the customer’s financial position and requirements.
93. It is submitted by the defendant that the material facts which must be brought to the customer’s attention are those set out in Regulations 19 and 20 of the 2005 Regulations, and perhaps the matters set out in the Code.
94. The defendant accepts that there was a breach of regulation 19(1)(d) in that the plaintiff was not informed that the companies were connected. However, it says that no damage flowed from the breach, since the plaintiff said that he had assumed that GE Money and the underwriter were “the same entity”, or parts of the same larger entity. Since that was in fact the case, the breach of the regulation made no difference to him. He had not given evidence that it would have made a difference, and it would not be open to this court to find that he would have acted differently, had he been informed.
Question (vii) and (ix)(whether, if there is a duty to advise or inform, breach of such duty constitutes a misleading and/or aggressive commercial practice within the meaning of the Consumer Protection Act 2007; and what is the test of causation in action for breach of statutory duty)
95. It is not suggested by the plaintiff that the definition of an “aggressive” practice applies. The case made is that the defendant engaged in a misleading practice.
96. In relation to causation, the plaintiff says that if a breach is found to have occurred, the court must consider whether it was likely to have led to a transactional decision that the average consumer would not otherwise have made. Under s.74(2) of the Act it would also have to consider an award of damages irrespective of loss. On a common law approach, the test would be as set out by Floyd L.J. in Saville v. Central Capital – whether, if the duty had not been breached, the plaintiff would have purchased the policy.
97. The defendant says that Question (vii) is “unworkably” vague. In any event it does not arise, since there was no finding that any such duty was breached.
98. Mr. McCullough submits that Question (ix) is premised on an assumption that there had been a finding that if the plaintiff had been given different information, he would not have purchased the PPI. The question does not in fact arise, given the findings of the trial judge. Without prejudice, the defendant’s position is that the normal rules in relation to causation apply. The plaintiff must show that but for the breach complained of the damage complained of would not have occurred.
Question (viii) (as to where the burden of proof lies in relation to a dispute about the discharge of a duty of care)
99. Mr. Moran relies here on the statement of principle by Sir Stanley Burton in Saville v Central Capital, favouring the burden being placed on the defendant. He argues that if the plaintiff is correct in believing that the commission was so large that it created a conflict between the financial motivation of GE Money and the interests of the plaintiff, that would be a point he could not prove unless the burden was shifted.
100. It is submitted on behalf of the defendant that this issue does not arise since there is nothing to suggest that the onus of proof played any part in the decision of the trial judge. It is further submitted that, as in practically all civil litigation, the burden of proof is on the plaintiff to establish on the balance of probabilities that a duty of care has not been discharged. The comments made by Sir Stanley Burton in Saville are described as obiter. They were in any event made in the context of consideration of the ICOB rules, and the statutory provisions that made those rules actionable.
Question (x) (whether there is a duty to disclose commission)
101. The plaintiff relies here on the judgment of the United Kingdom Supreme Court in Plevin. Mr. Moran says that in both jurisdictions, there was no express regulatory obligation to disclose commission. However, the findings of that Court demonstrate that commission may become relevant depending on its size. In this case, the trial judge decided that it was not relevant, regardless of size.
102. On the question of disclosure of commission, Mr. McCullough submits that it is not required by either the Regulations or the Code. It is accepted that the common law duty of care is informed by the Code. However, it is submitted that, in the first instance, the Code is not directly enforceable or actionable in itself. In this regard the judgment of Birmingham J. in Zurich Bank v McConnon [2011] IEHC 75 is relied upon.
103. Secondly, it is submitted that the Code does not require disclosure of commission. The reference to “charges” in General Principle 6 is to costs or fees payable by the customer to the regulated entity and does not encompass commission, since that is not payable by the customer.
104. The review of the Code conducted by the Central Bank in December 2008 is relied on in support of this position. The consideration of the issue in that document proceeded on the basis that there was no such requirement in respect of non-life assurance, and the question whether such a regulation should be introduced was discussed. On foot of the issues identified, new rules were introduced in the 2012 Code.
105. It is argued that there is no duty of disclosure at common law and that the principle that contracts of insurance are uberrima fides has no application. In any event there were no factual findings in the case as to what the consequences of such an obligation would be.
106. Referring to the Consumer Protection Act 2007, Mr. McCullough says that it would not be possible for the court to determine whether the sections relied upon can apply without embarking on a fact-finding exercise. “The general principle of good faith”, “the standard of skill that the trader may reasonably be expected to exercise”, the question whether false information was provided, and the likelihood that an “average consumer” would be affected in making a decision are, he says, all matters that require to be grounded in expert evidence.
107. It is also submitted that if there was no obligation to disclose commission under the 2006 Code, failure to disclose it could not be considered to have been an unfair or misleading commercial practice, at least in the absence of “extensive factual analysis and evidence”.
108. It is submitted that Plevin cannot assist the plaintiff given the differences in the statutory context. In the first place, the provisions in question were concerned with the relationship between creditors and debtors, and not with insurance intermediaries.
109. Secondly, it is noted that the ICOB rules were, by statute, specifically made actionable but they did not require disclosure of commission. The result in Plevin therefore turned on the provisions of s.140A, and the finding of the Court that the commission paid in the case made the contractual relationship “unfair” within the meaning of that section so as to permit a court to re-open the agreement and grant relief.
110. Mr. McCullough points out that there is an equivalent provision in ss. 47 and 48 of the Consumer Credit Act 1995 but, again, it applies only to credit agreements. He submits that any duty to disclose commission could only arise in a statutory context or by virtue of a Code. No such duty has been imposed in any context.
Question (xi) (whether a breach of the European Communities (Insurance Mediation) Regulations, and particularly reg.19, amounts to a breach of statutory duty, and, if so, whether the breach was actionable by a customer)
111. The plaintiff relies on Law v. FSO on this aspect. Baker J. found that the Ombudsman had erred in finding that the documentation supplied to the appellants, although lacking certain prescribed information, was sufficient to comply with the statutory requirements.
“In doing so he failed to take into account the mandatory nature of the Regulations and the absence of information at the time of investment as to what the investment services were to cost the appellants in fees to the intermediary…”
112. It is submitted in the instant case that the learned trial judge appears to have placed excessive weight on the evidence that the plaintiff knew that the PPI was optional and had signed the contract, in circumstances where there had been a failure to provide the information about the inter-company relationship required by the regulation and a failure to comply with the common law duty to disclose the commission.
113. Mr. McCullough says that at an abstract level the answer to this question is probably yes, but it does not arise in this case. The plaintiff’s evidence was that he assumed that GE and the insurer were the same company. The admitted breach of the regulation therefore caused him no loss.
Question (xii) (whether the communication of optionality and/or the existence of a cooling-off period discharges the duty of the intermediary)
114. The plaintiff submits that the answer is “No”, and these obligations should be seen as additional to those otherwise identified by him.
115. The defendant complains that this question is vague and ambiguous, and fails to identify the duty in issue. It had been argued by the defendant in the District Court that optionality and the cooling-off period were relevant but no finding of fact was made raising this question.
Question (xiii) (whether the intermediary is entitled to rely on contractual warranties and/or estoppel to the effect that the customer has understood the optional nature and main terms of PPI)
116. Mr. Moran accepts that the District Judge found that the plaintiff knew that the policy was optional, and that the plaintiff said in cross-examination that it was suitable and had signed it. However, he says that the court is obliged to embark upon a “holistic” assessment having regard to the judgment of Baker J. in Law v FSO.
117. Mr. McCullough says that it was clear that the plaintiff understood that PPI was optional, and elected to buy it. No issue of contractual warranties or estoppel arises. There is nothing to indicate that the learned District Judge had placed excessive weight on the fact of the plaintiff’s signature.
118. Question (xiv) was not pursued.
Discussion and conclusions
119. It seems to me that the concern expressed by the court about the content of the case stated, and many of the submissions made thereon on behalf of the defendant, are valid. It is clear that many of the questions in this case simply cannot be answered without embarking upon a treatise on consumer rights in the area of the sale of insurance policies, without reference to the facts of the case. The plaintiff’s representatives have, I think, attempted to create far too large a structure of law on the relatively small foundations of the case.
120. However, in the circumstances, I do not believe that it would be helpful to remit the matter for amendment. There are, I consider, sufficient findings of fact to enable the court to deal with those aspects of the case that appear to be of most relevance to the transactions in question. For this purpose I propose to amend the questions.
121. Having regard to the findings of fact (which I think I am justified in taking as including implicit findings that the policies were sold to the plaintiff, and that the issue of commission was not relevant), the overarching issue is whether the trial judge applied the correct principles of law in assessing the facts and dismissing the plaintiff’s claim. The questions that seem to me to be pertinent to that issue are these: –
1. Was the defendant obliged to ensure that the policies sold to the plaintiff were suitable to his circumstances?
2. Did the failure to inform the plaintiff as to the relationship between the defendant and the underwriter have any legal consequence?
3. Did the non-disclosure of the fact of, and the amount of, the commission to be earned by the defendant have any legal consequence?
122. It appears that any doubt as to suitability arose from the advice of a friend of the plaintiff to the effect that the policies were of no benefit to him, because of the nature of the plaintiff’s employment. However no issue in this regard was actually established in evidence.
123. The problem here is not, in my view, really about the burden of proof, but is, rather, a matter of locus standi. Although it was pleaded that the policies were unsuitable, that plea was made without specificity as to the reasons for the alleged unsuitability. As it happens, the plaintiff’s evidence was to the effect that the policies were suitable. That is the only evidence on the issue. It was therefore not, in my view, open to him to contend that the defendant should have taken steps to ensure that they were suitable, and that the failure to take such steps sounds in damages.
124. If I am wrong about that I would accept the argument made by the defendant that the plaintiff bears the burden of proof in relation to the question of unsuitability. I do not think that the plaintiff is correct in characterising the plea that the product was unsuitable as a negative assertion. It is as much a positive assertion as a plea in a road traffic case that the defendant failed to comply with the rules of the road. In any event, even if a burden did lie on the defendant I would consider that it was discharged by eliciting, in cross-examination, the plaintiff’s evidence that the product was suitable. The “peculiar knowledge” principle does not have any application in circumstances where the issue as to suitability, in so far as it arose at all, turned on the employment status of the plaintiff. That was a matter for him to establish if it was relevant.
125. On the second question, I note that the admitted breach was described by counsel for the defendant as “accidental”, “technical” and “inadvertent”. There was, of course, no evidence that it was accidental or inadvertent, and that certainly is a matter within the knowledge of the defendant. The use of the word “technical” is not particularly helpful. The defendant’s main point is that the breach was irrelevant in this particular case because the plaintiff said that he had assumed that GE Money and the underwriter were “the same entity” and they were were in fact related companies, or parts of the same entity.
126. I think that counsel for the plaintiff is correct in saying that this aspect should be considered in conjunction with the issue of disclosure of the commission.
127. It is obvious that the policy behind all of the statutory and regulatory provisions referred to above is that the consumer should be given adequate information before entering into a transaction. There is an express requirement in the 2005 Regulations that the consumer must be told the nature of the relationship between the insurance intermediary and the underwriter. This requirement cannot be regarded as mere window-dressing – it is a mandatory part of the information structure.
128. The defendant says that nothing turns on this admitted breach because the plaintiff said that he assumed that the intermediary and the underwriter were the same entity, and they were in fact parts of the same entity. However, this is where, in my view, the question of commission becomes material. If a consumer believes that the one entity is selling both the loan and the insurance, he or she is unlikely to think that commission arises. Where the services are being provided by entirely separate entities, commission becomes a more likely possibility and one which the average consumer might enquire into. Where the companies are related, and one is paying commission to the other, it seems to me that both of these pieces of information are material since the consumer may well not realise that he or she is, in effect, paying “on the double” to related entities. At that point, the size of the commission becomes relevant for the reasons identified by Lord Sumption in Plevin. Depending on the ratio between the premium for the insurance and the commission, a customer might well feel that the product was not good value and might be less likely to buy it. I do not believe that this is a matter requiring expert evidence.
129. I accept that it was the view of the 2008 Review Group that commission for non-life assurance products did not require to be disclosed under the 2006 Code, but that seems to have been on the basis that there was no express requirement to that effect. “Relevance” and “materiality” are both concepts that have to be assessed in context. The context of this case was that the defendant had failed to provide one mandatory piece of information, the absence of which could be found to have to some extent obscured, from the consumer’s point of view, the fact that commission was being charged.
130. The Code is not in itself actionable, although it is accepted by the defendant that it informs the content of an insurance intermediary’s duty of care. However, it seems to me that the defendant’s conduct was capable of amounting to a misleading commercial practice within the meaning of s.43(2) and s.43 (3)(c). The non-disclosure of commission, particularly if combined with a failure to give adequate information as to the connection between the intermediary and the underwriter, is something likely to cause a consumer to be misled in relation to the manner in which the price of the product is calculated. That is a matter giving rise to an action for damages. I note that the Review Group does not appear to have considered the applicability of this provision.
131. In the instant case, the plaintiff’s evidence was that
“…had he known he was paying extra for insurance in the form of commission and where he was not informed of other options at the point of sale, he might have instead gone to the insurer directly or looked for other options from third parties.”
(Para.4 (ii))
132. I therefore consider that the learned trial judge fell into error in holding that the conduct of the defendant was “beyond reproach” having regard to the admitted failure to comply with a mandatory requirement to disclose the relationship between the companies. I further consider that he erred in holding that commission was not relevant to the case.
133. I will hear the parties as to the form of the final order
S.I. No. 198/2021 –
European Union (Unfair Trading Practices in the agricultural and food supply chain) Regulations 2021
CONTENTS
Part 1
PRELIMINARY AND GENERAL
1. Citation
2. Interpretation
3. Scope of Regulation
4. Application of Regulations
5. Enforcement Authority
Part 2
Prohibited Unfair Practices
6. Prohibited Practices, Unconditional
7. Prohibited Practices, Conditional
Part 3
Complaints, etc
8. Complaints and confidentiality
9. Reporting
Part 4
Enforcement
10. Appointment of authorised officer
11. Functions of authorised officer
12. Search warrant
13. Compliance notice
14. Appeal against compliance notice
15. Obstruction and false statements
Part 5
Procedural
16. Data Sharing
17. Service
Part 6
Penalties
18. Penalties and prosecutions
I, CHARLIE MCCONALOGUE, Minister for Agriculture, Food and the Marine, in exercise of the powers conferred on me by section 3 of the European Communities Act 1972 (No. 27 of 1972), for the purpose of giving effect to Directive (EU) 2019/633 of the European Parliament and of the Council of 17 April 20191 , hereby make the following regulations:
Part 1
PRELIMINARY AND GENERAL
Citation
1. (1) These Regulations may be cited as the European Union (Unfair Trading Practices in the agricultural and food supply chain) Regulations 2021.
(2) These Regulations come into operation on 1 July 2021.
Interpretation
2. For the purposes of these Regulations the following definitions apply:
“agricultural and food products” means products listed in Annex I to the Treaty on the Functioning of the European Union as well as products not listed in that Annex, but processed for use as food using products listed in that Annex;
“annual turnover” has the meaning assigned to it by the second subparagraph of Article 1(2) of the UTP Directive;
“authorised officer” means a person appointed under Regulation 10;
“buyer” means any natural or legal person, irrespective of that person’s place of establishment, or any public authority in the Union, who buys agricultural and food products, (the term “buyer” may include a group of such natural and legal persons);
“Directive 2011/7” means Directive 2011/7/EU of the European Parliament and of the Council of 16 February 20112 ;
“document” includes any information, photograph, image or map whether maintained in an electronic form or otherwise;
“enforcement authority” means, in the case of the State, the Minister and, in the case of any other Member State, the enforcement authority of that Member State for the purposes of the UTP Directive;
“Minister” means the Minister for Agriculture, Food and the Marine;
“perishable agricultural and food products” means agricultural and food products that by their nature or at their stage of processing are liable to become unfit for sale within 30 days after harvest, production or processing;
“public authority” means—
(a) government or other public administration, including public advisory bodies, at national, regional or local level,
(b) any natural or legal person performing public administrative functions under national law, including specific duties, activities or services, and
(c) any natural or legal person having public responsibilities or functions, or providing public services, under the control of a body or person falling within paragraph (a) or (b),
and includes—
(i) a Minister of the Government,
(ii) the Commissioners of Public Works in Ireland,
(iii) a local authority for the purposes of the Local Government Act 2001 (No. 37 of 2001),
(iv) a harbour authority within the meaning of the Harbours Act 1946 (No. 9 of 1946),
(v) the Health Service Executive established under the Health Act 2004 (No. 42 of 2004),
(vi) a board or other body (but not including a company under the Companies Act 2014 ) established by or under statute,
(vii) a company under the Companies Act 2014 , in which all the shares are held—
(I) by or on behalf of a Minister of the Government,
(II) by directors appointed by a Minister of the Government,
(III) by a board or other body within the meaning of paragraph (vi), or
(IV) by a company to which subparagraph (I) or (II) applies, having public administrative functions and responsibilities,
but does not include any body when acting in a judicial or legislative capacity;
“Regulation (EU) No 1308/2013” means Regulation (EU) No 1308/2013 of the European Parliament and of the Council of 17 December 20133 ;
“supplier” means any agricultural producer or any natural or legal person, irrespective of their place of establishment, who sells agricultural and food products, (the term “supplier” may include a group of such agricultural producers or a group of such natural and legal persons, such as producer organisations, organisations of suppliers and associations of such organisations;
“supply agreement” means a contract (whether orally or in writing) for the sale or supply of agricultural and food products by a supplier to a buyer;
“UTP Directive” means Directive (EU) 2019/633 of the European Parliament and of the Council of 17 April 2019.
(2) A word or expression that is used in these Regulations and is also used in the UTP Directive has, unless the context otherwise requires, the same meaning in these Regulations as it has in the UTP Directive.
Scope of Regulations
3. (1) These Regulations shall be without prejudice to the provisions of any Act or instrument made under such Act aimed at combating unfair trading practices that are not within the scope of these Regulations, provided that those provisions are compatible with the rules on the functioning of the internal market.
(2) Where a prohibition specified in Regulations 6 or 7 conflicts with a provision in another Act or instrument made under such Act, or an act of an institution of the European Union, which falls within the scope of the prohibition, the provision of Regulation 6 or 7 relating to that prohibition shall, in accordance with Article 3(4) of the UTP Directive, prevail over such other provision.
Application of Regulations
4. (1) These Regulations apply to certain unfair trading practices which occur in relation to sales of agricultural and food products by-
(a) suppliers which have an annual turnover not exceeding €2,000,000 to buyers which have an annual turnover of more than €2,000,000,
(b) suppliers which have an annual turnover of more than €2,000,000 and not exceeding €10,000,000 to buyers which have an annual turnover of more than €10,000,000,
(c) suppliers which have an annual turnover of more than €10,000,000 and not exceeding €50,000,000 to buyers which have an annual turnover of more than €50,000,000,
(d) suppliers which have an annual turnover of more than €50,000,000 and not exceeding €150,000,000 to buyers which have an annual turnover of more than €150,000,000, and
(e) suppliers which have an annual turnover of more than €150,000,000 and not exceeding €350,000,000 to buyers which have an annual turnover of more than €350,000,000, or
(f) suppliers which have an annual turnover not exceeding €350,000,000 to all buyers which are public authorities.
(2) These Regulations apply to-
(a) sales where either the supplier or the buyer, or both, are established in the Union, and
(b) services, insofar as explicitly referred to in Regulations 6 or 7, provided by the buyer to the supplier.
(3) These Regulations apply –
(a) to a supply agreement concluded after the making of these Regulations, or
(b) to a supply agreement concluded before the making of these Regulations, from 12 months after such making of the Regulations.
(4) These Regulations do not apply to agreements between suppliers and consumers.
Enforcement Authority
5. (1) The Minister is designated as the enforcement authority for the purposes of the UTP Directive and these Regulations.
(2) The enforcement authority may initiate and conduct investigations on its own initiative or on the basis of a complaint.
Part 2
Prohibited Unfair Practices
Prohibited Practices, Unconditional
6. (1) A buyer shall not pay a supplier-
(a) where a supply agreement provides for the delivery of products on a regular basis-
(i) for perishable agricultural and food products, later than 30 days after the end of an agreed delivery period in which deliveries have been made or later than 30 days after the date on which the amount payable for that delivery period is set, whichever of those two dates is the later, or
(ii) for other agricultural and food products, later than 60 days after the end of an agreed delivery period in which deliveries have been made or later than 60 days after the date on which the amount payable for that delivery period is set, whichever of those two dates is the later, or
(b) where the supply agreement does not provide for the delivery of products on a regular basis-
(i) for perishable agricultural and food products, later than 30 days after the date of delivery or later than 30 days after the date on which the amount payable is set, whichever of those two dates is the later, or
(ii) for other agricultural and food products, later than 60 days after the date of delivery or later than 60 days after the date on which the amount payable is set, whichever of those two dates is the later.
(2) For the purposes of the payment period in paragraph (1)(a), the agreed delivery period shall be not more than one month.
(3) Notwithstanding paragraphs (1)(a) and (b), where the buyer sets the amount payable-
(a) the payment period referred to in paragraph (1)(a) shall start to run from the end of an agreed delivery period in which the deliveries have been made, and
(b) the payment period referred to in paragraph (1)(b) shall start to run from the date of delivery.
(4) Paragraph (1)(a) is without prejudice-
(a) (i) to the consequences of late payments and remedies as laid down in Directive 2011/7/EU (and the European Communities (Late Payment in Commercial Transactions) Regulations 2012 ( S.I. No. 580 of 2012 )), and
(ii) by way of derogation from the payment periods set out in Directive 2011/7/EU (and S.I. No. 580 of 2012 ), the consequences of late payments and remedies referred to in clause (i) shall apply, where applicable, on the basis of the payment periods set out in the UTP Directive and these Regulations, and
(b) to the option of a buyer and a supplier to agree on a value sharing clause within the meaning of Article 172a of Regulation (EU) No 1308/2013.
(5) Paragraph (1)(a) shall not apply to a payment-
(a) made by a buyer to a supplier where such payment is made in the framework of the school scheme pursuant to Article 23 of Regulation (EU) No 1308/2013,
(b) made by a public entity providing healthcare in the meaning of point (b) of Article 4(4) of Directive 2011/7/EU,
(c) under a supply agreement between a supplier of grapes or must for wine production and their direct buyer, provided-
(i) that the specific terms of payment for the sales transactions are included in standard contracts which have been made binding by the Member State pursuant to Article 164 of Regulation (EU) No 1308/2013 before 1 January 2019, and that this extension of the standard contract is renewed by the Member State from that date without any significant changes to the terms of payment to the disadvantage of suppliers of grapes or must, and
(ii) that the supply agreement between the supplier of grapes or must for wine production and their direct buyer is multiannual or becomes multiannual.
(6) A buyer shall not cancel orders of perishable agricultural and food products at such short notice that a supplier cannot reasonably be expected to find an alternative means of commercialising or using those products.
(7) A buyer shall not unilaterally change the terms of a supply agreement for the agricultural and food products that concern the frequency, method, place, timing or volume of the supply or delivery of the agricultural and food products, the quality standard, the terms of payment or the price, or as regards the provision of services insofar as these are explicitly referred to in Regulation 7.
(8) A buyer shall not require payment from a supplier that is not related to the sale of the agricultural and food products of the supplier.
(9) A buyer shall not require a supplier to pay for the deterioration or loss, or both, of agricultural and food products that occurs on the buyer’s premises or after ownership has been transferred to the buyer, where such deterioration or loss is not caused by the negligence or fault of the supplier.
(10) A buyer shall not refuse to confirm in writing the terms of a supply agreement between the buyer and the supplier for which the supplier has asked for written confirmation. This shall not apply where the supply agreement concerns products to be delivered by a member of a producer organisation, including a cooperative, to the producer organisation of which the supplier is a member, if the statutes of that producer organisation or the rules and decisions provided for in, or derived from, those statutes contain provisions having similar effects to the terms of the supply agreement.
(11) A buyer shall not unlawfully acquire, use or disclose trade secrets of a supplier within the meaning of Directive (EU) 2016/943 of the European Parliament and of the Council of 8 June 20164 .
(12) A buyer shall not threaten to carry out, or carry out, acts of commercial retaliation against the supplier if the supplier exercises its contractual or legal rights, including by filing a complaint with enforcement authorities or by cooperating with enforcement authorities during an investigation.
(13) A buyer shall not require compensation from the supplier for the cost of examining customer complaints relating to the sale of the supplier’s products, in the absence of negligence or fault on the part of the supplier.
(14) Subject to paragraph (15), for the purposes of paragraph (6), notice of less than 30 days shall always be considered as short notice.
(15) For the purposes of paragraph (6), the Minister may set periods shorter than 30 days for specific sectors in duly justified cases having regard to the purpose of the UTP Directive.
(16) Where the Minister sets a period shorter than 30 days under paragraph (15) for a specific sector-
(a) details of that shorter period shall be published on a website maintained by, or on behalf of, the Minister, and
(b) notice of the shorter period shall be published in Iris Oifigiúil.
(17) A person who contravenes paragraphs (1), (6), (7), (8), (9), (10), (11), (12) or (13) commits an offence.
Prohibited Practices, Conditional
7. (1) A buyer shall not, unless they have been previously agreed in clear and unambiguous terms in a supply agreement or in a subsequent agreement between the supplier and the buyer-
(a) return unsold agricultural and food products to the supplier without paying for those unsold products or without paying for the disposal of those products, or both,
(b) charge a supplier payment as a condition for stocking, displaying or listing its agricultural and food products, or of making such products available on the market,
(c) require a supplier to bear all or part of the cost of any discounts on agricultural and food products that are sold by the buyer as part of a promotion,
(d) require the supplier to pay for the advertising by the buyer of agricultural and food products,
(e) require the supplier to pay for the marketing by the buyer of agricultural and food products, or
(f) charge the supplier for staff for fitting-out premises used for the sale of the supplier’s products.
(2) Where a buyer engages in the trading practice referred to in paragraph (1)(c), the buyer shall, prior to a promotion that is initiated by the buyer, specify the period of the promotion and the expected quantity of the agricultural and food products to be ordered at the discounted price.
(3) Where a buyer requires payment for the situations referred to in paragraph (1)(b), (c), (d), (e) or (f), if requested by the supplier, the buyer shall provide the supplier with an estimate in writing of the payments per unit or the overall payments, whichever is appropriate, and, insofar as the situations referred to in paragraph (1)(b), (d), (e) or (f) are concerned, shall also provide, in writing, an estimate of the cost to the supplier and the basis for that estimate.
(4) A person who contravenes this Regulation commits an offence.
Part 3
Complaints, etc
Complaints and confidentiality
8. (1) Suppliers may address complaints to the Minister –
(a) where the supplier is established in the State, or
(b) where the buyer that is suspected to have engaged in a prohibited trading practice is established in the State.
(2) (a) Producer organisations, other organisations of suppliers and associations of such organisations, may submit a complaint at the request of one or more of their members or, where appropriate, at the request of one or more members of their member organisations, where those members consider that they have been affected by a prohibited trading practice, and
(b) other organisations that have a legitimate interest in representing suppliers shall have the right to submit complaints, at the request of a supplier, and in the interest of that supplier, provided that such organisations are independent non-profit-making legal persons.
(3) (a) Where the complainant so requests, the Minister shall take the necessary measures for the appropriate protection of the identity of the complainant or the members or suppliers referred to in paragraph (2) and for the appropriate protection of any other information in respect of which the complainant considers that the disclosure of such information would be harmful to the interests of the complainant or of those members or suppliers, and
(b) the complainant shall identify any information for which it requests confidentiality.
(4) Where the Minister receives a complaint, he or she shall inform the complainant within a reasonable period of time after the receipt of the complaint of how it intends to follow up on the complaint.
(5) Where the Minister considers that there are insufficient grounds for acting on a complaint, he or she shall inform the complainant of the reasons within a reasonable period of time after the receipt of the complaint.
(6) Where the Minister considers that there are sufficient grounds for acting on a complaint, he or she shall initiate, conduct and conclude an investigation of the complaint within a reasonable period of time.
Reporting
9. (1) The Minister shall-
(a) publish an annual report detailing the number of complaints received and the number of investigations opened or closed during the previous year, and
(b) for each closed investigation the report shall summarise a description of the complaint, the outcome of the investigation and where applicable, the decision taken, subject to the confidentiality provisions of Regulation 8.
(2) The Minister may, in accordance with Article 6 of the UTP Directive (and in particular, paragraph (1)(f) thereof), publish details of his or her decisions relating to—
(a) infringements of the prohibitions referred to in Regulations 6 or 7, or where the buyer was required to bring such prohibited trading practices to an end, or
(b) the imposition, or initiation of proceedings for the imposition of fines and other penalties, and interim measures.
Part 4
Enforcement
Appointment of authorised officer
10. (1) The Minister may appoint in writing such persons or classes of persons as he or she considers appropriate to be authorised officers for the exercise of all or any of the functions conferred on an authorised officer under these Regulations, as specified in the appointment.
(2) The Minister may terminate the appointment of an authorised officer appointed by him or her, whether or not the appointment was for a fixed period or specified purpose.
(3) An appointment as an authorised officer ceases—
(a) if it is terminated pursuant to paragraph (2),
(b) if it is for a fixed period, on the expiry of that period,
(c) if it is for a specified purpose, on the completion of that purpose, or
(d) if the person appointed is an officer of the Minister or member of a class of person, upon the person ceasing to be such an officer or member.
(4) Nothing in paragraph (3) is to be construed so as to prevent the Minister from reappointing as an authorised officer a person to whom that paragraph relates.
(5) An authorised officer appointed under this Regulation shall be furnished with a warrant of his or her appointment and, when exercising a power conferred on him or her, the officer shall, if requested by a person affected, produce the warrant or evidence that he or she is such an officer or member to the person.
Functions of authorised officer
11. (1) For the purposes of these Regulations or the UTP Directive an authorised officer may—
(a) enter and inspect, at all reasonable times, any premises if he or she is carrying out an official control or other official activity for the purposes of these Regulations or the UTP Directive or where he or she has reasonable grounds for believing that—
(i) a document or record related to agricultural and food products or other thing to which these Regulations or the UTP Directive relates is, may be or has been present, or
(ii) equipment, machinery, a vehicle, a vessel or other thing used in connection with a document or record related to agricultural and food products or other thing to which these Regulations or the UTP Directive relates is, may be or has been present,
(b) examine a document or record related to agricultural and food products, equipment, machinery or other thing used in connection with agricultural and food products or other thing to which these Regulations or the UTP Directive relates,
(c) require the name and address of the owner, or person in possession or control of a document or record related to agricultural and food products, equipment, machinery, a vehicle or a vessel used in connection with agricultural and food products or other thing to which these Regulations or the UTP Directive relates, or require details of place of departure, journey or destination,
(d) inspect a vehicle, a vessel, an aircraft, a railway wagon, a container, equipment, machinery, a computerised information management system or other thing used in connection with a document or record related to agricultural and food products or other thing to which these Regulations or the UTP Directive relates and require the person in charge or control of such to refrain from moving it,
(e) require the owner, person in possession or control of any premises, equipment, machinery, a computerised information management system, a vehicle, a vessel or other thing used in connection with a document or record related to agricultural and food products or other thing to which these Regulations or the UTP Directive relates, to produce to the officer such records (and in the case of a record stored in non-legible form, produce to him or her a copy in a legible form) that are in the person’s possession or procurement, or under the person’s control, as the officer may reasonably require,
(f) inspect and take copies of any record (including a legible reproduction of one stored in non-legible form) or extracts from the record that the officer finds or is produced to him or her during an inspection, or
(g) make a record, including by means of writing, sound recording, photograph, video or other means.
(2) An authorised officer may require a person to give information regarding the ownership and identity of a document or record related to agricultural and food products, equipment, machinery, a vehicle, a vessel or other thing used in connection with a document or record related to agricultural and food products or other thing to which these Regulations or the UTP Directive relates as is in the person’s knowledge or procurement.
(3) Where an authorised officer has reasonable grounds for believing that—
(a) an offence is being or has been committed under these Regulations, or
(b) evidence of an offence to which subparagraph (a) relates may be, is or has been on any land or premises, or in a vehicle, a vessel, an aircraft, a railway wagon, a container, equipment or machinery,
the officer may, in addition to the powers exercisable by him or her under paragraph (1):
(i) search the land or premises;
(ii) search the vehicle, vessel, aircraft, railway wagon, container, equipment or machinery (including any computerised information management system);
(iii) require a person in charge or control of the vehicle, vessel, aircraft, railway wagon, container, equipment or machinery to—
(I) refrain from moving it, or move it to a location where it may be searched,
(II) give information regarding its place of departure, journey or destination, and
(III) where the equipment or machinery is part of a computerised information management system, provide assistance (including passwords) to enable access to such devices or systems;
(iv) seize and detain a document or record related to agricultural and food products or other thing to which these Regulations or the UTP Directive relates and mark or otherwise identify it;
(v) detain a vehicle, vessel, aircraft, railway wagon, equipment, machinery (including any computerised information management system) or container for such reasonable period necessary for the purposes of permitting an inspection or a search under this Regulation either at the place where it was first detained or require it to be moved to such other location as the authorised officer requires;
(vi) remove any equipment, machinery (including any computerised information management system), books, documents or records and detain them for such reasonable period necessary for the purpose of his or her functions under these Regulations;
(vii) give such direction to a person who has a document or record related to agricultural and food products or other thing to which these Regulations or the UTP Directive relates, or who has equipment, machinery, vehicle or vessel or other thing used in connection with a document or record related to agricultural and food products or other thing to which these Regulations or the UTP Directive relates in his or her possession or under his or her control or who has information relating to such, as the authorised officer may reasonably consider necessary for the purposes of these Regulations.
(4) An authorised officer shall not enter, except with the consent of the occupier, a private dwelling unless he or she has obtained a search warrant under Regulation 12 other than where he or she has reasonable grounds for believing that before a search warrant could be sought in relation to the dwelling under Regulation 12, any evidence of an offence referred to in paragraph (3)(a) is being or is likely to be disposed of or destroyed.
(5) An authorised officer, when exercising a function under this Regulation, may be accompanied by other persons and may take with him or her, or those persons may take with them, any equipment or materials to assist the officer in the exercise of the function.
(6) An authorised officer may use reasonable force, if necessary, to exercise his or her functions under these Regulations.
(7) Where, in the course of exercising a function under these Regulations, an authorised officer finds or comes into possession of anything that the officer has reasonable grounds for believing to be evidence of an offence or suspected offence under these Regulations, the officer may seize and retain it for use in evidence in proceedings for an offence under these Regulations.
(8) An authorised officer is not liable in any proceedings for anything done in the purported exercise of his or her powers under these Regulations if the court is satisfied that the act was done in good faith and that there were reasonable grounds for doing it.
(9) A member of the Garda Síochána may stop a vehicle or vessel, for the purposes of these Regulations and may require it to be moved for inspection to such place as he or she directs.
(10) A person who has—
(a) a document or record related to agricultural and food products or other thing to which these Regulations or the UTP Directive relates, or
(b) equipment, machinery, a vehicle, a vessel or other thing used in connection with a document or record related to agricultural and food products or other thing to which these Regulations or the UTP Directive relates
in his or her possession or under his or her control, or information or a record relating to any of them, shall give such—
(i) assistance to an authorised officer, or person who accompanies the officer, and
(ii) information to an authorised officer on request being made, in that behalf by the officer, as the officer may reasonably require for the exercise of his or her functions under these Regulations.
(11) The owner or person in charge of any premises used in connection with a document or record related to agricultural and food products or other thing to which these Regulations or the UTP Directive relates shall, if required by an authorised officer, where it is practicable and possible, provide suitable equipment or facilities or a suitable part of the plant or establishment for the officer to carry out his or her functions under these Regulations.
(12) An authorised officer may require a person to give to the officer such information as is in the person’s power or procurement as regards any premises specified by the officer including—
(a) whether or not the premises is used, either partly or wholly, for or in connection with agricultural and food products or other thing to which these Regulations or the UTP Directive relates,
(b) the name of the owner, occupier or person who is in charge of the premises, and
(c) whether or not the premises is let and, if let, the name and address of the person to whom, and the period of time for which, it is let.
(13) Nothing in section 17 of the Industrial and Provident Societies Act 1893 prevents an authorised officer from exercising a function conferred on him or her by these Regulations.
Search warrant
12. (1) If a judge of the District Court is satisfied by information on oath of an authorised officer that there are reasonable grounds for believing–
(a) evidence of or relating to the commission or intended commission of an offence under these Regulations is to be found on a premises,
(b) there is or was a document or record related to agricultural and food products, equipment or other thing made, used or adapted for use (including manufacture and transport) in connection with a document or record related to agricultural and food products or other thing to which these Regulations or the UTP Directive relates, or
(c) a document or other record related to a thing to which subparagraph (a) or (b) refers is or may be on the premises,
the judge may issue a search warrant.
(2) A search warrant under this Regulation shall be expressed and operate to authorise a named authorised officer, accompanied by such authorised officers or other persons as the named authorised officer thinks necessary, at any time, within one month from the date of issue of the warrant, on production if so requested of the warrant, to enter (if necessary by use of reasonable force) the premises, vehicle, vessel or aircraft named in the warrant.
(3) If a premises is entered under a warrant issued under this Regulation, an authorised officer so entering may exercise all or any of the powers conferred on an authorised officer under these Regulations.
Compliance notice
13. (1) Where an authorised officer is of the opinion that—
(a) these Regulations or the UTP Directive is not being or has not been complied with, or there are reasons to believe that these Regulations or the UTP Directive will not be complied with, or
(b) it is necessary, ancillary or supplementary for the UTP Directive to have full effect,
the officer may serve a notice (“compliance notice”) stating that opinion to the person—
(i) who appears to be the owner, occupier, or person in charge of the premises,
(ii) in possession or control of a document or record related to agricultural and food products or other thing
to which the notice relates.
(2) A compliance notice shall—
(a) require the person to whom it is served to take such action as specified in the notice,
(b) inform the person to whom it is served that he or she may appeal the notice in the District Court under Regulation 14, and
(c) state that if the person to whom it is served fails to comply with the notice, he or she commits an offence and is liable to a penalty set out in Regulation 18(1).
(3) A compliance notice may require that—
(a) a buyer bring a prohibited trading practice referred to in Regulations 6 or 7 to an end,
(b) a buyer pay for perishable agricultural and food products where the order was cancelled at short notice,
(c) a buyer return to a supplier a payment, charge, compensation or however such expense is described and referred to in Regulations 6 or 7,
(d) a document or record related to agricultural and food products or other thing to which these Regulations or the UTP Directive relates be dealt with in a manner specified in the notice,
(e) agricultural and food products or other thing to which these Regulations or the UTP Directive relates be detained in such manner and at a place (if any) as the officer specifies in the notice,
(f) a specified operation or activity cease on a premises, or
(g) a specified operation or activity may only be carried out under and in accordance with such terms and conditions as are specified in the notice.
(4) A person to whom a compliance notice is served shall comply with the compliance notice until the notice expires, is withdrawn under paragraph (6) or is annulled under Regulation 14, and not cause or permit another person to contravene the terms of the notice.
(5) A compliance notice may specify a time limit within which it is to be complied with.
(6) A compliance notice may be modified or withdrawn in a further notice and the earlier notice has effect subject to the modification or withdrawal.
(7) A compliance notice may require the owner, occupier, operator or person in charge of any premises, a document or record related to agricultural and food products, vehicle, vessel, machinery (including any computerised information management system), equipment or other thing to which the UTP Directive relates to choose between two or more of the requirements specified in the notice.
(8) A compliance notice shall include an address for service of an appeal under Regulation 14.
(9) A person on whom a compliance notice is served who fails to comply with, or causes or permits another person to contravene the notice commits an offence.
Appeal against compliance notice
14. (1) A person to whom a compliance notice is served may, within 7 days from the date of service of the notice, appeal the notice to the Judge of the District Court having jurisdiction in the District Court district—
(a) where the agricultural and food products, premises, vehicle, machinery (including any computerised information management system), equipment, vessel or other thing to which the UTP Directive relates which is the subject of the notice, is situated, or
(b) where the person bringing the appeal ordinarily resides or carries on business,
on the grounds that the notice is unreasonable having regard to these Regulations or the UTP Directive.
(2) Notice of an appeal shall contain a statement of the grounds upon which it is alleged that the notice or any of the terms of the notice are unreasonable and shall be served on the authorised officer who served the compliance notice at the address included on the notice in accordance with Regulation 13 not later than 48 hours prior to the hearing of the appeal.
(3) A person bringing an appeal shall lodge a copy of the notice or appeal with the District Court Clerk concerned not later than 48 hours prior to the hearing of the appeal.
(4) On the hearing of an appeal a Judge of the District Court may confirm, modify or annul a notice.
(5) A person, including a person on whom a compliance notice has been served, who —
(a) pending the determination of an appeal, deals with agricultural and food products, premises, vehicle, vessel, machinery (including any computerised information management system), equipment, document or other thing to which the notice relates, other than in accordance with the terms of the compliance notice, or
(b) if the notice is confirmed or modified on appeal, deals with agricultural and food products, any premises, vehicle, vessel, equipment, machinery (including any computerised information management system), document or other thing to which the notice relates other than in accordance with the terms of the compliance notice as confirmed or modified
commits an offence.
(6) In this Regulation “appeal” means an appeal under paragraph (1).
Obstruction and false statements
15. (1) A person who —
(a) obstructs, interferes with or impedes an authorised officer, or any person who accompanies an authorised officer, in the course of exercising a function conferred on the officer under these Regulations,
(b) fails or refuses, without reasonable cause, to comply with a requirement of an authorised officer under Regulation 11,
(c) fails, without reasonable cause, to give assistance or requested information to an authorised officer in accordance with Regulation 11,
(d) in purporting to give information to an authorised officer for the exercise of the officer’s functions under these Regulations—
(i) makes a statement that he or she knows to be false or misleading in a material particular or recklessly makes a statement which is false or misleading in a material particular, or
(ii) intentionally fails to disclose a material particular,
(e) tampers or otherwise interferes with a sample taken under Regulation 11, or
(f) aids or abets a contravention of these Regulations or the UTP Directive,
commits an offence.
(2) A statement or admission made by a person pursuant to a requirement under Regulation 11(10)(ii) is not admissible in evidence in proceedings brought against the person for an offence (other than an offence under this Regulation for failing to give information or giving false information) under these Regulations.
Part 5
Procedural
Data Sharing
16. (1) Information, including personal data (within the meaning of Article 4 of Regulation (EU) 2016/679 of the European Parliament and of the Council of 27 April 20165 and section 69 of the Data Protection Act 2018 ) held by—
(a) the Minister,
(b) an enforcement authority of another Member State, or
(c) a body or individual to whom a function under these Regulations or the UTP Directive has been delegated,
for the purposes of these Regulations or an act of the institutions of the European Union, may be exchanged by them with each other for the performance by them of their functions under these Regulations.
(2) Paragraph (1) is without prejudice to any other power of the Minister to disclose information by or under an act of the institutions of the European Union.
Service
17. (1) A compliance notice shall, subject to paragraph (2), be addressed to the person concerned by name and may be served on or given to the person—
(a) by giving it to the person, his or her employee, servant or agent,
(b) by leaving it at the address at which the person ordinarily resides, normally carries out business, or, if an address for service has been furnished, at that address,
(c) by sending it by post in a prepaid registered letter to the address at which the person ordinarily resides or, if an address for service has been furnished, at that address,
(d) if the address at which the person ordinarily resides cannot be ascertained by reasonable enquiry and the compliance notice relates to a premises, by delivering it to the premises or by affixing it in a conspicuous position on or near the premises,
(e) by sending it by means of electronic mail to a device or facility for the reception of electronic mail where such an electronic mail address has been furnished by the person, but only if the sender’s facility for the reception of electronic mail generates a message confirming a receipt of the electronic mail confirming successful transmission of the notification, notice or document.
(2) If a compliance notice is to be served on or given to a person who is the owner or occupier of a premises and the name of the person cannot be ascertained by reasonable enquiry, it may be addressed to the person by using the words “the owner” or “the occupier”.
(3) A person shall not, at any time within 6 months after a compliance notice is affixed under paragraph (1)(d), remove, damage or deface the notification or compliance notice without lawful authority.
(4) For the purposes of this Regulation, a company within the meaning of the Companies Act 2014 is considered to be ordinarily resident at its registered office and every other body corporate or unincorporated body is considered to be ordinarily resident at its principal office or place of business.
Part 6
Penalties
Penalties and prosecutions
18. (1) A person who commits an offence under these Regulations is liable–
(a) on summary conviction, to a class A fine or to imprisonment for a term not exceeding 6 months or to both, or
(b) on conviction on indictment, to a fine not exceeding €500,000 or to imprisonment for a term not exceeding 3 years or to both.
(2) An offence under these Regulations may be prosecuted summarily by the Minister.
(3) If an offence under these Regulations is committed by a body corporate and is proven to have been so committed with the consent, connivance or approval of or to have been attributable to the wilful neglect on the part of any person, being a director, manager, secretary or other officer of the body corporate or a person who was purported to act in any such capacity, that person, as well as the body corporate, commits an offence and is liable to be proceeded against and punished as if he or she was guilty of the offence.
(4) If the affairs of a body corporate are managed by its members, paragraph (3) applies in relation to the acts and defaults of a member in connection with the functions of management as if the member were a director or manager of the body corporate.
(5) In proceedings alleging a contravention of these Regulations, it is a defence for the defendant to show he or she acted in accordance with a derogation or transitional measure laid down by an act of an institution of the European Union relevant to the subject of the offence it is alleged that he or she committed.
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GIVEN under my Official Seal,
28 April, 2021.
CHARLIE MCCONALOGUE,
Minister for Agriculture, Food and the Marine.
EXPLANATORY NOTE
(This note is not part of the Instrument and does not purport to be a legal interpretation).
These regulations transpose Commission Directive 2019/633/EC and establish a minimum list of prohibited unfair trading practices in business-to-business relationships in the agricultural and food supply chain and lay down minimum rules concerning the enforcement of those prohibitions and arrangements for coordination between enforcement authorities.
1 OJ L 111, 25.4.2019, p. 59
2 OJ L 48, 23.2.2011, p. 1
3 OJ L 347, 20.12.2013, p. 671
4 OJ L 157, 15.6.2016, p. 1
5 OJ L 119, 4.5.2016, p.1
Consumer Protection (Gift Vouchers) Act 2019
Definition
1. In this Act, “Act of 2007” means the Consumer Protection Act 2007 .
Gift voucher contracts
2. The Act of 2007 is amended by the insertion of the following Part after Part 4:
“Part 4A
Gift Voucher Contracts
Definitions and application
66A. (1) In this Part—
‘durable medium’ means any medium on which information is provided and stored, including paper and email, that—
(a) renders the information accessible for future reference for a period of time adequate for the purposes of the information, and
(b) allows the unchanged reproduction of the information;
‘expiry date’ means the date after which, by virtue of the passage of time, a gift voucher ceases to be redeemable for the purchase of goods or services;
‘gift voucher’ means, subject to subsection (2), any voucher, coupon or other document or instrument, including in electronic form, that is intended to be used as a substitute for money in the payment, in whole or in part, for goods or services or otherwise exchanged for goods or services;
‘gift voucher contract’ means a contract between a relevant trader and another person whereby the relevant trader supplies the person with a gift voucher;
‘relevant trader’ means a trader who supplies a gift voucher to a person in accordance with a gift voucher contract.
(2) In this Part, ‘gift voucher’ does not include a voucher, coupon or other document or instrument, including in electronic form—
(a) that is redeemable only for the purposes of the purchase, at a discounted price, of specified goods or specified services, from a specified trader or traders—
(i) on a specified date, or
(ii) for a specified period of a limited duration not exceeding 3 months,
(b) that is supplied under a customer loyalty scheme,
(c) that is supplied in connection with a promotional scheme that is connected to the purchase of specified goods or specified services,
(d) that is supplied by way of a refund for goods returned to a trader,
(e) that is redeemable only in exchange for goods or services relating to telephone services, internet services, fuel, electricity, heating or any other utility,
(f) that is a cheque, bank draft or postal money order,
(g) that constitutes electronic money, within the meaning of the European Communities (Electronic Money) Regulations 2011 ( S.I. No. 183 of 2011 ), or
(h) that is not supplied, marketed, provided or otherwise made available to be given as a gift.
(3) This Part applies to a gift voucher contract that is entered into on or after the date on which this subsection comes into operation.
(4) Any reference in this Part to a term of a gift voucher contract includes a reference to a term which, although not contained in the contract, is incorporated in the contract by another term of the contract or by any other means.
Terms of gift voucher contracts
66B. (1) (a) Subject to subsection (5), a gift voucher contract shall contain a term that the gift voucher is—
(i) subject to an expiry date that is at least 5 years from the date on which the contract was entered into, or
(ii) not subject to an expiry date.
(b) Where a gift voucher contract does not include a term satisfying paragraph (a), the contract shall be deemed to include a term that the gift voucher is subject to an expiry date that is 5 years from the date on which the contract was entered into.
(c) Where a gift voucher contract is deemed to contain a term in accordance with paragraph (b), and that term conflicts with an express term in the contract, the term under paragraph (b) shall override the express term.
(d) A relevant trader who enters into a gift voucher contract that is contrary to paragraph (a) commits an offence and is liable on conviction on indictment or on summary conviction, as the case may be, to the fines and penalties provided in Chapter 4 of Part 5.
(2) (a) A relevant trader who enters into a gift voucher contract shall specify, whether on the gift voucher itself or otherwise on a durable medium supplied with the gift voucher—
(i) the expiry date of the gift voucher,
(ii) the date on which the gift voucher contract was entered into and the period during which the gift voucher to which it relates is redeemable, or
(iii) that the gift voucher is not subject to an expiry date.
(b) A relevant trader who fails to comply with paragraph (a) commits an offence and is liable on summary conviction to the fines and penalties provided in Chapter 4 of Part 5.
(3) (a) A gift voucher contract shall not contain a term requiring the full value of a gift voucher to be redeemed in a single transaction.
(b) A relevant trader who enters into a gift voucher contract that is contrary to paragraph (a) commits an offence and is liable on conviction on indictment or on summary conviction, as the case may be, to the fines and penalties provided in Chapter 4 of Part 5.
(4) (a) Where—
(i) a person redeems part of the value of a gift voucher in a transaction, such that the remaining balance of the gift voucher is €1 or more, and
(ii) the gift voucher contract contains a term preventing the remaining balance of the gift voucher from being redeemed in another transaction,
the gift voucher contract shall be deemed to include a term requiring the relevant trader to reimburse the remaining balance of the gift voucher to the person, in cash, by electronic transfer or by way of a gift voucher, in accordance with subsection (5).
(b) Where a gift voucher contract is deemed to contain a term in accordance with paragraph (a), and that term conflicts with an express term in the contract, the term under paragraph (a) shall override the express term.
(c) A relevant trader who enters into a gift voucher contract that contains an express term that is contrary to paragraph (a) commits an offence and is liable on conviction on indictment or on summary conviction, as the case may be, to the fines and penalties provided in Chapter 4 of Part 5.
(5) Where the remaining balance referred to in subsection (4)(a) is reimbursed by way of a gift voucher, the gift voucher concerned shall have—
(a) an expiry date not earlier than the expiry date of the gift voucher referred to in the said subsection (4)(a), and
(b) a value equal to that of the remaining balance of the gift voucher referred to in the said subsection (4)(a).
(6) (a) In this subsection, ‘gift voucher contract to which this subsection applies’ means a gift voucher contract that contains a term requiring a gift voucher to be redeemed by a named person.
(b) A gift voucher contract to which this subsection applies shall contain a term providing that—
(i) the named person may redeem the gift voucher notwithstanding a difference between that person’s name as it appears on, or in connection with, the gift voucher, and as it appears on that person’s passport, driving licence, or any other form of personal identification, and
(ii) the named person’s name as it appears on, or in connection with, the gift voucher may be amended or changed without a fee being charged.
(c) Where a gift voucher contract to which this subsection applies does not contain a term satisfying paragraph (b), the contract shall be deemed to include a term giving effect to that paragraph.
(d) Where a gift voucher contract to which this section applies is deemed to contain a term in accordance with paragraph (c), and that term conflicts with an express term in the contract, the term under paragraph (c) shall override the express term.
(e) A relevant trader who enters into a gift voucher contract to which this subsection applies that is contrary to paragraph (b) commits an offence and is liable on conviction on indictment or on summary conviction, as the case may be, to the fines and penalties provided in Chapter 4 of Part 5.
(7) (a) A gift voucher contract shall not contain a term that places a limit on the number of gift vouchers that a person is permitted to redeem in a single transaction.
(b) A relevant trader who enters into a gift voucher contract that is contrary to paragraph (a) commits an offence and is liable on conviction on indictment or on summary conviction, as the case may be, to the fines and penalties provided in Chapter 4 of Part 5.
(8) (a) Where a gift voucher contract contains a term relating to the replacement by a relevant trader of a gift voucher that has been lost or stolen, that term shall provide that the replacement gift voucher shall not be subject to an expiry date that is earlier than the expiry date of the gift voucher that it replaces.
(b) Where a gift voucher contract contains a term relating to the replacement by a relevant trader of a gift voucher that has been lost or stolen, and which does not satisfy paragraph (a), the contract shall be deemed to include a term giving effect to that paragraph.
(c) Where a gift voucher contract is deemed to contain a term in accordance with paragraph (b), and that term conflicts with an express term in the contract, the term under paragraph (b) shall override the express term.
(d) A relevant trader who enters into a gift voucher contract that is contrary to paragraph (a) commits an offence and is liable on conviction on indictment or on summary conviction, as the case may be, to the fines and penalties provided in Chapter 4 of Part 5.
(9) Where a gift voucher contract contains a term that is contrary to the requirements of this section—
(a) the term shall not be binding on—
(i) a party to the gift voucher contract who is not a relevant trader, or
(ii) a person who has rights under the gift voucher contract under subsection (10),
and
(b) the gift voucher contract shall continue to bind the parties to it, or a person who has rights under the gift voucher contract under subsection (10), if it is capable of continuing in existence without the term that is contrary to the requirements of this section.
(10) Where a person (other than a relevant trader) who is party to a gift voucher contract gives, sells or otherwise transfers the gift voucher to which the contract relates to a third person, the third person shall be entitled to exercise all rights under the gift voucher contract on the same terms as the original party to the gift voucher contract.”.
Consequential amendments to Act of 2007
3. The Act of 2007 is amended—
(a) in section 67, by the substitution of the following paragraph for paragraph (d):
“(d) any contravention of section 65(1) or section 66B,”,
(b) in section 85(1), by the substitution of the following paragraphs for paragraph (d):
“(d) Regulation 5(3), 7(8), 8(5), 9(4), 10(10), 11(6), 12(5), 19(7), 25(4), 26(5) or 27(4) of the European Union (Consumer Information, Cancellation and Other Rights) Regulations 2013 ( S.I. No. 484 of 2013 );
(e) section 66B(2).”,
and
(c) in section 90(1), by the substitution of the following paragraphs for paragraph (h):
“(h) the provisions of the European Union (Unjustified Geo-blocking of Consumers) Regulations 2018 (S.I. No. 513 of 2018);
(i) the provisions of Part 4A.”.
Short title, collective citation and commencement
4. (1) This Act may be cited as the Consumer Protection (Gift Vouchers) Act 2019.
(2) The Consumer Protection Acts 2007 and 2014 and this Act may be cited together as the Consumer Protection Acts 2007 to 2019.
(3) This Act shall come into operation on such day or days as the Minister for Business, Enterprise and Innovation may appoint by order or orders either generally or with reference to any particular purpose or provision, and different days may be so appointed for different purposes or different provisions.