Impact on Consumers after Brexit

Brexit Consumers

As it is probably clear to every citizen of the European Union already, on June 23rd the United Kingdom voted to leave the European Union. The so called “Brexit” ignited a lot of feelings. It has been, is being and will be continuously analysed within the coming years. This period is bound to be governed by insecurity, as no one is fully able to understand or predict how this historical precedent is to develop and play out. The future of the relationship between the EU and the UK is still left to our imagination.

Decades of integration?

What would these changes bring to all of us, as consumers? Again, to be honest, in brief, the answer of this question is simply “We do not know.” Having joined the EU in 1973, the UK’s integration until 2016 has lasted around four decades. The UK started adopting instruments (Directives, Regulations, Decisions) on EU consumer law back in the 1980s. Those include, among others, the Product Liability Directive, the Doorstep Selling Directive, the Directive on Product Safety and the Consumer Rights Directive.

All of those (and many more) have been transposed into the national legal system of the UK. This was done as a part of the obligations of the United Kingdom towards the European Union. Directives have been implemented into the national law of the UK. Regulations have become directly applicable to the UK, without the need of transposition. Despite that, the UK has been in a constant struggle with the scope and content of European consumer law initiatives having precedence over its national law.

Essential consumer rights?

One example can be the clash between the European notion of ‘good faith’ and the UK national perception of the concept. According to the concept in the UK, parties are free to negotiate between themselves and contract as they desire. Good faith is a notion related to open and fair dealing. It requires that the contractual terms imposed on customers are to be expressed fully, clearly and in a comprehensive manner. They shall contain no concealed pitfalls or traps. Importance should also be given to contractual terms that are disadvantageous to the customer. What is more, fair dealing requires that a Trader does not deliberately take advantage of the uninformed consumer’s lack of experience and unfamiliarity with the concepts of good faith, fair dealing, equal footing of the parties or the consumer’s weak bargaining position.

Despite the fact that renowned judges have said that there is nothing new to the concept of fair dealing in English law. The United Kingdom has put in a lot of effort to implement the notion. Until the 1999 Unfair Terms in Consumer Contracts Regulations, which gave effect to a European Directive, containing a requirement of good faith, a duty of good faith was only implied in certain categories of contract (contracts of employment, contracts between partners or others whose relationship was characterised as a fiduciary one). Nowadays, nevertheless, all consumers are protected by the notion of good faith in all their consumer contracts with Traders (for both goods and services).

What now, after Brexit?

Having said all of the above, it seems unlikely that the UK will try and ‘undo’ all the consumer rules that it has implemented, through EU law, during the past 43 years. The EU-wide market and trade are so interconnected that it looks highly improbable for a policy shift to occur, especially after the UK Consumer Rights Act reform in 2015. One thing that is certain is the fact that European consumer protection law is very highly harmonized. Although the unequal bargaining power has been historically overridden by business-freedom rules, consumer protection is now so deeply integrated within the whole internal market that it makes no sense for the UK to change the current regime if it wants to keep selling to customers outside the boundaries of the United Kingdom.

But at the same time, if rules remain the same in light of specific sectors, such as consumer protection, would not that mean that the UK is not necessarily better off without the European Union? Well, it remains to be seen…

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