Monthly commercial law update: Top 5 developments in February

Monthly commercial law update: Top 5 developments in February

Here's this month's top 5 commercial law developments taken from our February LexisPSL Commercial monthly round-up.

Consumer credit: Reinterpreting the Consumer Credit Act 1974

In a development that will be of interest to those advising consumers on their rights under section 75 of the Consumer Credit Act 1974, a court has held in the case of Gillian Mal’ouf v MBNA Europe Bank Limited (trading as Abbey Cards)  that consumers who bought a misrepresented item on their credit card may be able to claim from the point when they notice the fault, not from the date they made the purchase. The case has thrown new light on the credit law and consumer rights.

Contract law: Common European Sales Law

MEPs have backed the Common European Sales Law (CESL) at its first reading in a plenary session of the European Parliament. The CESL introduces a uniform set of EU-wide rules for cross-border sales, to be applied on a voluntary basis. The aim is to boost business in the internal market by overcoming trade barriers resulting from differences in national contract law. The proposed CESL would co-exist side by side with national laws and apply only if both the seller and the buyer voluntarily agreed to it.

Members of European Parliament (MEPs) propose to restrict the scope of the new law only to distance selling, as they believe it would be particularly beneficial to internet shopping.

The new sales law would enable firms to offer products in a number of Member States under the same contract rules. This would help businesses enter new markets without having to pay the extra costs incurred by having to adapt to different rules in different Member States.

For consumers this could mean a wider range of products available at lower prices. If a product brought online from a different country under the European sales law proves to be faulty, a range of remedies would be available, such as termination of the contract, replacement or repair of the product, or a price reduction. To better balance the rights of buyers and sellers, MEPs inserted a rule under which consumers would have to notify the seller within two months after having noticed a fault in the product.

This vote constitutes the European Parliament’s first reading position. Under the co-decision procedure, the Council of Ministers may accept the Parliament’s position or adopt its own position, for further discussion with Parliament

Data protection: Guidance: conducting privacy impact assessments code of practice

An updated privacy impact assessments (PIA) code of practice to help organisations respect privacy when changing the way they handle people’s information has been issued by the ICO.

The code explains the privacy issues organisations should consider when planning projects which use personal information, including the need to consult with stakeholders, identify privacy risks and address these risks in the final project plan.

A PIA is a tool which can help organisations to identify the most effective way to comply with their data protection obligations and meet individuals’ expectations of privacy. An effective PIA will allow organisations to identify and fix problems at an early stage, reducing the associated costs and damage to reputation that might otherwise occur. The code of practice explains the principles which form the basis of a PIA. The main body of the code sets out the basic steps an organisation should carry out during the PIA process. The practical implementation of the basic principles will depend on the organisation’s usual business practice.

The Information Commissioner has issued the code of practice under the Data Protection Act, s 51, in pursuance of his duty to promote good practice. The process described in the guidance is designed to be flexible enough to work for organisations of any size and in any sector. The code will also work across a range of privacy and data protection issues. The publication of the code follows an external consultation carried out with stakeholders between August and November 2013. The consultation highlighted the need for the updated code to be flexible enough to be applicable to organisations of all sizes and for privacy impact assessments to fit into the existing project development process.

Procurement: European Council adopts procurement reform package

The Council of the European Union has adopted the package for the reform of European Union procurement law, consisting of a directive on public procurement (replacing 2004/18/EC), a directive on procurement by entities operating in the utilities sectors: water, energy, transport and postal services (replacing Directive 2004/17/EC); and a directive on the award of concession contracts. The package simplifies the regime and seeks to make it more flexible. The new rules seek to ensure greater inclusion of common societal goals in the procurement process.

Trade marks: Lush wins case against Amazon

In a case that will be of interest to those advising on website advertising, the High Court has ruled in the case of Cosmetic Warriors Limited and another v Limited and another, involving the cosmetics retailer Lush. It held that Lush was entitled to prevent Amazon using its trade mark to promote rival goods for sale on Amazon and via Google and that Amazon had, among other things, infringed the origin and investment functions of Lush's trade marks.

There were three heads of claim. Lush failed in its claim relating to 'bath bombs', a product it claimed to have invented, but was successful in the other two heads of claim. The second head related to the fact that Amazon had bid on the keyword 'lush', within the Google AdWords service so triggering a sponsored link advertisement appearing on the Google search engine results page when a consumer searched for 'lush'. It is not possible to buy Lush products on Amazon but the sponsored search result suggested otherwise. The third head related to the operation of the Amazon website. Searching for Lush products on Amazon's website would result in a drop-down menu identifying various Lush goods and a display of products similar or equivalent to those sold by Lush, but no display of any Lush products and no overt message to the effect that Lush's products were not available from the Amazon website. Amazon contended that the third head of claim went to the root of its business model.

The judge ruled that Amazon could not distance itself from the operation of its search engine. Its suggestion that it was the creature of consumer preferences because it converted past consumer behaviour into suggestions was not sustainable. The case follows a long line of 'keyword' disputes

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