Category: Uncategorized

Time for a regulatory review of online contracts & practices

The Consumer Protection Act 2007 was a major reform of Irish consumer law with predictably European foundations, but has had very little impact in Ireland. It is rarely enforced in any meaningful way and the lack of court cases mean it is underdeveloped, despite the Act having wide-ranging provisions, extensive criminal offences and enforcement powers and even rights for consumers to seek damages for its breach.

Given the scope of the legislation, which covers marketing, sales, pricing and contract practices, it is not hard to find consumer situations in Ireland where the Act applies but is not enforced or respected. Undisclosed advertorial, for example, is a frequent and ongoing source of controversy that came into focus with undisclosed celebrity and sportsperson endorsements but has become a bigger issue with the rise of social media influencers. Regular calls to “do something” or to provide “clarity” on the rules are usually framed in the terms of non-binding ASAI rules rather than the actual legal provisions of the Act which have a direct bearing.

Another consistent issue is contract and subscription services that can be set up online or in-app but which have complicated or disproportionately inconvenient cancellation requirements, the main culprits being online publications and utility companies. There is no fair reason for requiring someone to ring up to cancel, or to write in by post for example, other than to capitalise on inertia. In one example I have seen, customers can cancel by clicking a link in their account but that merely prompts the trader to call the customer to confirm – an unnecessary extra step which does nothing more than provide the trader with another opportunity to cajole the customer not to cancel, but which also raises contractual difficulties in determining the cancellation period.

The Act prohibits a range of commercial practices, including aggressive commercial practices. These are practices which, if by harassment, coercion or undue influence, would be likely to:

  1. cause significant impairment of the average consumer’s freedom of choice or conduct in relation to the product concerned, and
  2. cause the average consumer to make a transactional decision that the average consumer would not otherwise make.

This may not immediately seem relevant to cancellation practices, but the Act goes on to say that in determining whether the commercial practice employs harassment, coercion or undue influence, a number of things shall be taken into account, including the imposition of onerous or disproportionate non-contractual barriers by the trader when the consumer wishes to terminate the contract, exercise a contractual right or switch to another product or trader.

In 2011, the Bulgarian Supreme Court found that burdensome termination requirements effectively trapped consumers in automatic renewals of a service, amounting to an aggressive commercial practice. It is worth noting that, in Ireland, aggressive consumer practices are not just prohibited, they are a criminal offence. The penalties under the Act can be serious, ranging up to a fine of up to €5,000 or imprisonment for up to 12 months on summary conviction or up to €60,000 and 18 months on indictment.

The history of Irish regulatory law and enforcement, particularly in consumer law, suggests that prosecutions will continue to be rare and even if brought to conviction penalties will be at the low end of the scale. However, Irish consumers are entitled to a more activist consumer regulator monitoring terms and conditions and trader behaviours, particularly given that the lack of class action structures in Ireland means that the civil remedies in the Act are usually not cost-effective to invoke, devaluing another incentive for traders to improve behaviour. I have had District Court cases with awards of aggravated damages in the region of 25% due to misleading commercial practices, but the consumers involved had significant contractual claims to begin with. For most, private enforcement of a breach of the Act will not be worthwhile.

The merger of the under-resourced Competition Authority with the under-resourced Consumer Agency to form the Competition and Consumer Protection Commission has continued the trend of insufficient enforcement and monitoring of both areas of the law, but the emphasis remains on competition and merger control.

The Commission has only published lists of consumer protection enforcement measures taken up to the end of 2016 and for that year it reports 40 enforcement actions, but which cover only 7 categories of consumer law breaches and only three categories of remedial action (none of which were prosecutions). From 2012 to 2016 one major Irish retailer appears on the enforcement list 40 times, with some entries relating to multiple offences. Only one conviction is recorded, in the 2012 enforcement list. It would appear that fixed payment notices and other minor measures are a mere cost of doing business, rather than something that leads to an improvement for consumers.

The most commonly enforced rules are those prohibiting the car “clocking” and price display regulations. However, a significant amount of consumer disposable income is likely now spent on daily transactions, particularly through mobile internet use, which involve lengthy contracts with detailed terms and conditions. It is time for a detailed study of these terms and practices to check for compliance with the Act and a number of other relevant pieces of consumer legislation.

Advertisements

HSE abolishes new national fee for calculating loss of earnings

 

hsePersonal injuries compensation is usually assessed by the Injuries Board, though many claims end up in court afterward. Both the Injuries Board and the courts calculate compensation on the basis of general damages, a somewhat unscientific amount awarded for pain and suffering, and special damages, which are made up of specific expenses.

A common claim special damages claim in a personal injuries case is for loss of earnings. The injured party will get a certificate from their employer calculating what earnings were lost due to the injuries suffered and the certificate will be used as evidence to support their claim. Recently,  the HSE started charging its own employees €123 for providing a certificate of loss of earnings. This was surprising as while providing the certificate involves some work for the employer, they should have the information readily available and providing it seems part of the ordinary obligations of an employer to an employee.

When I first came across the charge it I queried it with the HSE, who said it was a new standardised fee. I asked the Injuries Board if they would include such a fee in calculating special damages for a claim and they said they would not. So the injured party would either have to pay the fee themselves or risk not having an accurate loss of earnings claim.

Last week, the Injuries Board wrote to me to say that they were taking the issue up directly with the HSE.

In the meantime I had made a freedom of information request to the HSE about the introduction of the fee, with an interesting result. It appears that the HSE began to consider introducing this standardised fee in March 2013. They thought about it at a number of meetings in 2013/2014 and tax advice was taken which confirmed that vat would apply to the fee. They went ahead and introduced it.

There was a gap in documentation after 2014 until 21 September 2016 (two weeks ago), when the general manager of national payroll for the HSE sent an internal email as follows:

Following a review of the charge for Loss of Earnings calculations, it has now been agreed to abolish same effective immediately.

It does seem odd that a process was engaged in over two years to discuss and decide on the national standardised fee, but the review of it which lead to its abolition appears to have come out of nowhere and the only document about it is an email confirming the decision.

But nevertheless, the abolition of the fee is welcome (although, the email says that any existing charges which have been billed remain). Fees of this nature are unnecessary hidden costs in personal injuries claims. When the insurance industry complains about legal costs, it never breaks down the costs and it is worth drawing some attention to the State costs involved.

Solicitors and “plain packaging” laws

I wrote earlier about plain packaging laws for tobacco products and intellectual property. I mentioned that the Law Society had made submissions to the Oireacthas Joint Committee on Health and Children in relation to the issue.

I, along with 12 other solicitors who are members of the Law Society, did not endorse the submissions made by the Law Society before they were made and do not agree with them. On Monday afternoon, we wrote to the Society. A copy of the letter appears below.

I have received a response from the President of the Society today to say, essentially, that it is under consideration. The Director General of the Society has also written to The Irish Times in relation to a clarification he makes about their reporting of the issue, and that letter may well appear tomorrow. The President tells me:

The elected representatives of the solicitors profession, who comprise the Council of the Law Society, will continue to decide on what issues and with what content the views of the Law Society will be submitted to the many Government Departments, agencies, Oireachtas Committees and, indeed, other bodies who constantly seek the Society’s views on a vast range of different issues.

Status of legislation following dissolution of Dáil

A&L Goodbody has published a useful FAQ on the status of bills currently before the Oireachtas, given that the President has dissolved the Dáil.

In summary:© Office of the Houses of the Oireachtas and/or others

  • Bills going through the legislative process in the Oireachtas at the time of the dissolution of the Dáil prior to a General Election will lapse.
  • The new Dáil will decide which bills it intends to pursue.
  • These bills will continue at the particular stage they had reached prior to the dissolution of the Dáil.

 

#100

Wordle: AClatterOfTheLaw.comI have enjoyed working on this blog for over a year now and have reached the hundredth post. In the time-honoured tradition of marking such milestones with lazy lists, here are the 10 most popular posts so far:

  1. Marriage by default and the Civil Partnership Bill 2009
  2. Regional papers got that regional knowledge, right?
  3. Graduated response now de facto law in Ireland
  4. Koger v. HWM: significant Irish software case on competing with former employer
  5. Fines Act 2010: paying fines or doing time?
  6. Blawg Review #264
  7. Biometric national ID cards for Ireland on the way?
  8. Ban on upward only rent reviews
  9. Is Ireland ready for a child rights referendum?
  10. Details of eircom’s 3-strikes system, but who will know what?

Interestingly, many of this top 10 are slow-burners that didn’t get many readers when published but have steadily attracted visits over the year, mostly by showing up in Google searches. The top 5 search terms are:

  1. fines act 2010
  2. hadji bey
  3. smdf
  4. civil partnership bill
  5. koger hwm

Of particular interest is the list of top referrers, which shows how people arrived at this blog. I wasn’t surprised that Twitter came out on top, as links are fed from the blog to my account. The second highest referrer was Eoin O’Dell’s excellent blog cearta.ie, and I am grateful to receive some of his many visitors. The third highest referrer was Facebook, which was a surprise, as I don’t push links to Facebook.

I hope to keep going for another 100 posts or more. Thank you for reading and, though most of you have remained anonymous so far, all comments are welcome (particularly those that disagree or correct errors!).

Does the home defence bill clarify the law?

[Updates at end] The Minister for Justice has published the Criminal Law (Defence and the Dwelling Bill) 2010. In 2009, the Law Reform Commission published a report on general defences in criminal law which addressed the specific issue of home defence, noting:

The law surrounding these defences, as with many aspects of the criminal law, has evolved over time. The nature and scope of these defences have, in the Commission‟s view, been troubled with some inconsistencies, competing rationales and even arguments as to whether they should be abolished in certain instances. In this Report, the Commission proposes to provide a more coherent framework for the future application of the defences.

As indicated by the above statement, there is already plenty of law on the subject but, as it derives from case law it can be unpredictable and often fails the black and white certainty test called for by the media and public on certain occasions.

From the US National Archives
A reasonable defence against theft of some petrol?

Background

The Law Reform Commission suggested draft legislation to clarify the law on home defence which was not adopted by the Minister (though he might have been expected to). In reality, the new Bill has been generated as a response to the killing of John “Frog” Ward. A background to that case and the resulting prosecutions of Padraig Nally is available on Wikipedia, and the usual health warning applies.

That Mr. Nally was convicted, successfully appealed and was acquitted on re-trial evidences the lack of clarity or consistency in the law. Nevertheless, it is a strange case to act as a catalyst for new laws to strengthen the position of those who use force in self-defence. Mr. Nally was living alone at his home and appears to have been subjected to an indefensible series of incidents which led him to feel threatened in his home, but the case was not the stereotypical home defence case. It should be remembered that that:

  • Mr. Nally did not encounter the trespasser at close quarters within the home, rather he saw a trespasser exiting his home;
  • the incident took place at around 2 pm., in daylight;
  • Mr. Nally went to an outhouse where he had stored his gun;
  • he shot the trespasser, later reloaded his gun and fired another shot at the trespasser, who was now fleeing the scene; and
  • he beat him a significant number of times with a stick.

Other proposals to change the law on home defence

In response to the Nally cases, Fine Gael presented two private members’ bills on this issue in the Oireachtas, both with similar content, in 2006 and 2009. Both provided that, where a trespasser is unlawfully present in a dwelling “and remains within the dwelling”, resulting in the use of force by the occupier, that force is presumed to be reasonable unless the contrary is proven. However, nothing in either bill would have provided a defence to a charge of murder.

In addition to addressing criminal liability, both bills provided that no liability in tort would accrue to the occupier “in respect of any harm, whether serious or not, caused by his or her actions in relation to a trespasser” unless the force used is found to be unreasonable.

The Law Reform Commission’s draft bill provided, in relation to dwellings, that a person could use force (including lethal force) in the dwelling or the vicinity of it by way of defence to the threat or use of unlawful force by another person. This would only apply in the case of a threat of death or serious injury, rape or aggravated sexual assault, false imprisonment by force, unlawful entry to or occupation of the dwelling and damage to or destruction of the dwelling.

The Government’s Bill

The Minister’s Bill provides that it will not be an offence to use force within a dwelling against another person or their property where

  • (s)he believes the other person has entered or is entering the dwelling as a trespasser for the purpose of committing a criminal act; and
  • the force used is only such as is reasonable in the circumstances as he or she believes them to be (i) to protect from injury, assault, detention or death caused by a criminal act; (ii) to protect property from appropriation, destruction or damage caused by a criminal act, or (iii) to prevent the commission of a crime or to effect or assist in effecting, a lawful arrest.

The substance of the Bill provides much scope for debate, not least because the Fine Gael proposal did not provide a defence for a murder charge: the Minister’s Bill does. The criteria for reasonableness are in need of greater scrutiny but the provision on civil liability raises new questions.

Section 5 of the Bill provides that a person who uses force as permitted by the Bill shall not be liable in tort “in respect of any injury, loss or damage arising from the use of such force.” Such a provision could block claims like those taken by Mr. Ward’s widow against Mr. Nally. It will be interesting to see how this provision will work. The criminal justice system requires proof of guilt beyond reasonable doubt; the civil requirement is a lesser threshold of satisfying the balance of probabilities. If the user of force is acquitted on the basis of a section 2 defence, does that determine the matter for a judge hearing the civil trial? Or will the judge hearing the civil trial have to consider the issue, for example where no prosecution is brought against the user of force? If that judge determines that the force used was not permissible, will a prosecution result? It would certainly seem that cases of this sort should be excluded from the operation of the Injuries Board, which will hardly be in a position to determine the issue, but the Bill is silent on this.

Fine Gael’s 2009 Bill referred to harm caused “in relation to a trespasser”; an imprecise  phrase but one assumes that it absolves the user of force from civil liability to the trespasser. The Minister’s 2010 Bill is not so limited, allowing for the potential that a lawful resident, guest or neighbour who might be injured as a result of the force directed at the trespasser will be barred from taking action against the user of force. Alternatively, a guest in the home could use lawful force against a trespasser but injure the home owner. Section 5 appears to absolve that guest from all civil liability.

Does this Bill clarify the law?

The first draft of this Bill is likely to be a source of further confusion and ambiguity. It certainly does not tie up loose ends. While it is presented as legislation that “clarifies” the law, it is more accurate to say that it merely updates or amends the law. Sections 2(3) and (4), along with other aspects of the Bill, arguably do not advance the clarity of the  law on this topic. Despite frequent complaints from the public (and lawyers) that legislation is difficult to understand, those subsections are barely comprehensible. It is baffling that a simpler way could not be found to express some aspects of this Bill.

However, given that it resembles the Fine Gael bills at the high level, it could attract a good deal of cross-party support and pass through the Oireacthas without detailed scrutiny of its wording. This happened recently with the Civil Partnership and Certain Rights and Obligations of Cohabitants Act 2010, Part 15 of which did not receive significant textual scrutiny despite criticisms from leading academics that the provisions on cohabitants’ rights were poorly drafted, contained anomalies and could do more harm than good.

Updates

  • Sinéad Ring discusses the Bill on the Human Rights in Ireland blog.
  • Vincent Browne says that the Bill “serves only nasty political ends”. As noted by the Law Reform Commission and others, reform of the law was necessary but the Bill does not resolve the issues and it is hard to disagree with Browne’s political assessment of the legislation:

Now a Bill has been introduced whose only purpose seems to be to respond to that vibe of five years ago, thereby neutralising any opportunist point-scoring in that arena by Fine Gael, while, incidentally, reminding Fianna Fáil TDs that there is a strong man around, should they be looking for same between now and the election.

Registered business names

The nature of a registered business name (RBN) is a common source of confusion and misunderstanding. A frequent misconception is that an RBN is a form of trade mark: it is not. Having an RBN is a simple compliance requirement and does not offer any protection in the name registered.

Couldn't they have used something snappier?
Couldn’t they have used something snappier?

Running a business

There are a range of ways in which a business can be operated:

  • By an individual (as a sole trader). An individual running a business is personally and fully liable if sued. Sole traders do not have to register with the Companies Registration Office (CRO) and are governed by the general law, rather than any specific regulatory law.
  • By a partnership. The individual members of the partnership are jointly and severally liable if sued. Most partnerships do not register with the CRO. They are governed by the Partnership Act 1890. When sued, the defendant is listed with the individual partners named individually along with the partnership name (eg. Joe Bloggs v. Jane Bloggs, Jack Bloggs and Joanne Bloggs, practising under the name and style of Bloggs & Partners Solicitors).
  • By a limited company. There are various types of limited company and additional incorporation options have been proposed. Unlike a sole trader or partnership, a limited company is a legal person in its own right, distinct from its shareholders. The liability of shareholders is limited in accordance with the share structure of the company. The Companies Acts regulate the operation of limited companies.

Using a business name

Whatever of the above structures one uses to carry on business, an RBN will often be necessary. Where a name is used in the course of business that is not true name of the business, the Registration of Business Names Act 1963 requires that the name is registered with the CRO.

The following are common examples of when registration is required:

  • Jane Bloggs runs a corner shop. If she calls the shop Bloggs’ Stores, she must register that as an RBN. She will then be Jane Bloggs trading as (t/a) Bloggs’ Stores.
  • Joe Bloggs runs a construction company, Joe Bloggs Construction Limited. If the company trades as Bloggs’ Builders it must register that name. The company will then be Joe Bloggs Construction Limited t/a Bloggs’ Builders. A company cannot trade as another company – eg. Joe Bloggs Construction Limited t/a Bloggs Limited.

Why must you register?

The system of business name registration allows other people to find out who runs the business. This is not a problem if a business is run under a person’s own name or under a company name, which can be searched against in the CRO. But if an assumed name is used, how is a customer or supplier to know what legal entity is behind the business? The question often arises as follows: who do I sue?

The requirements of the Registration of Business Names Act 1963 are often not observed and, it would seem, enforcement is not a priority. The equivalent legislation in the UK was repealed in 1982 and business name registrations are no longer possible there.

What a business name is not

  • A form of company. You might register a business name with the CRO, but this is not incorporation. The registration merely puts on public record that the registrant carries on business using the registered name.
  • A trade mark. A registered business name is not a form of intellectual property and it offers no exclusive right to use the name registered. It is not a trade mark, registered or otherwise. In fact, duplicate entries are often found in the register of business names. By contrast, a particular trade mark can only be registered once.

Letting people know

If a business uses a registered business name, all business letters, circulars and catalogues on or in which the business name appears must contain the following information in legible form:

  • in the case of an individual, his/her present name, any former names, and his/her nationality, if not Irish; and
  • in the case of a partnership, the present name and any former names, and the nationality, if not Irish, of all the partners in the firm.

An additional set of disclosure rules apply to Irish-registered companies, whose letters, notices, publications, order forms and websites must contain specific information.