What to look out for in 2014 – Commercial

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Consumer law reform

The Government is currently undertaking the most extensive reform of consumer law in years. The reforms fall into five key categories:

  • implementation of the Consumer Rights Directive into UK law
  • introduction of the Consumer Rights Bill
  • addressing misleading and aggressive practices
  • structural reform of consumer law enforcement institutions
  • empowering consumers.

The deadline for the Consumer Rights Directive to be incorporated into national law is December 2013, with the provisions coming into force in June 2014. The Consumer Rights Bill is intended to implement parts of the Consumer Rights Directive (although the bulk of this will be implemented in secondary legislation). The Bill, if introduced in its current form, would consolidate a number of existing consumer rights laws into one single legal framework and increase the rights and remedies available to consumers. It would also clarify the powers of enforcers to investigate potential breaches of consumer law; introduce enhanced measures for consumers to achieve redress and facilitate challenges by consumers and businesses to anti-competitive practices. The draft Bill also proposes the introduction of specific rights and remedies for consumers buying digital content.

Common European Sales Law

In October 2012, the European Parliament Committee backed the introduction of a uniform, Common European Sales Law (CESL), to apply where there is a cross-border element to a transaction. The CESL, if it goes ahead, will be optional with EU businesses and consumers free to decide whether or not to use it in their cross-border contracts. The CESL would be a code of contract law that would co-exist with, rather than replace, national laws.

To date, the reaction in the UK to these proposals has been largely negative with the Government maintaining that there is insufficient evidence of the need for the CESL as currently drafted, which would apply to business-to-consumer and business-to-business transactions where one of the businesses is a small or medium-sized enterprise. Despite this, the European Parliament professes confidence that all the issues will be resolved, and that the CESL will proceed and it is worth keeping an eye on developments in 2014.

New technology transfer block exemption

The current regulation block exempting certain categories of technology licensing agreement from the competition rules on anti-competitive agreements is due to expire on 30 April 2014. The European Commission has been consulting on the form of the new block exemption regulation which is to take its place. Walker Morris responded to the consultation and we have written previously on certain details of the Commission proposals.

Review of the Bribery Act 2010

The Government is due to review the Bribery Act 2010 with a view to potentially relaxing its requirements to reduce the burden on small and medium-sized enterprises as part of the “red tape challenge”. The Act introduced a very tough anti-bribery regime and brought with it some uncertainties, for instance, the extent to which corporate hospitality could fall foul of the Act. Businesses that have been struggling to implement anti-bribery policies and practices will watch with interest for possible developments.

Privately funded healthcare services

The Office of Fair Trading made a market investigation to the Competition Commission in respect of the supply or acquisition of privately funded healthcare services in the UK in April 2012. The OFT is empowered to make a market investigation reference where it has reasonable grounds for suspecting that the market at issue involves features which “prevent, restrict or distort competition”. The OFT identified a number of such features, including the lack of easily comparable information available to patients, GPs or insurance providers as to quality and costs or private healthcare services; high levels of concentration at both national and local level, and significant barriers to entry. Those findings were endorsed by the Competition Commission’s provisional findings.

The Competition Commission has been consulting on possible remedies, which include requiring certain private hospital providers to divest hospitals in certain local areas. Other possibilities include a prohibition on incentive schemes for consultants, a prohibition on expansion in certain local areas, measures to prevent bundling or tying; and measures to improve the quality of information available to patients.

The Competition Commission’s final report is due in April 2014.

Competition & Markets Authority

The Competition & Markets Authority (CMA) is scheduled to begin operation in 1 April 2014. The CMA, which is being formed from a merger of the Office of Fair Trading and the Competition Commission, will have responsibility for enforcing competition law and protecting consumers.

The legislation providing for the formation of the CMA – the Enterprise and Regulatory Reform Act 2013 – also introduces various technical changes to the competition regime and particularly the cartel offence.