A UK Perspective on Implementation 231

principle which points towards use of private actions—presumably for dam- ages—to ensure the effective application of EC law. Although this case law has hitherto been concerned with directly applicable provisions, it would seem possible to extend this approach also to the present context. What this may mean, in effect, is the evolution of a new domestic remedy of breach of statutory duty for EC law inspired provisions.47

6. POST-IMPLEMENTATION ISSUES

The objective of this chapter so far has been to draw out what might be described as the technical challenges in implementing the UCPD, with a focus on key changes that might have to be made to legislation. However, ensuring that the formal legal framework of a directive is transposed correctly into domestic law is only part of the challenge; often, the real test of whether this has been successful is the practical application of the implementing legislation. In this regard, there is a question over the likely involvement of the European Court of Justice in interpreting Article 5, in particular. The experience in the context of the Unfair Contract Terms Directive48 suggests that it is unlikely that the ECJ will pronounce on the unfairness of a particular commercial practice, referring the matter back to the domestic courts.49 The main burden will fall on the enforcement agencies, in any event, and the early post-implementation period will undoubtedly be a challenging one.

It will be important for anybody applying the new law to be aware of its European origins, and the need to treat every key concept differently from comparable domestic ones. The main national legal measure implementing the UCPD (whether, in the UK, this will become the ‘Unfair Commercial Practices Regulations 2007’, or something else remains to be seen), which will probably closely resemble the UCPD itself both in form and in terminology, will presumably be more obviously applied in accordance with the UCPD itself and any judgments of the ECJ which will eventually be forthcoming. But if it is assumed that the UK will not simply replace all its existing measures with a single piece of legislation, then there will be some pre-existing measures which will remain in force, albeit in amended form. Therefore, there will be a challenge for the enforcement authorities and courts to accept that these domestic rules need to be interpreted and applied in a different light. These measures will then be implementing an EC directive, and must be interpreted accordingly. This may mean that older case

47 See G Betlem, ‘Torts, a European Ius Commune and the Private Enforcement of Community Law’ (2005) 64 Cambridge Law Journal 126.

48[1993] OJ L 95/29.

49See Case C–237/02 Freiburger Kommunalbauten v Hofstetter [2004] ECR I–3403.

232 Christian Twigg-Flesner and Deborah Parry

law can no longer be relied upon, unless it is not in open conflict with EC law. More importantly, even though the terminology in these measures may remain unaltered to some extent, it will nevertheless have to be applied and understood against the European backdrop now provided by the UCPD.

7. STEPS TAKEN TOWARDS IMPLEMENTATION BY THE UK

Before we conclude our thoughts, it is useful to consider, briefly, the steps which the UK has taken so far towards implementing the Directive. Even before the UCPD had been finalised, the DTI commissioned research from a group of scholars to analyse the scope of the UCPD and to identify domestic measures which fall within its scope and would therefore be affected by it. An indicative list drawn up in the final report identified a significant number of measures which may fall within the scope of the UCPD.50 The DTI has since reviewed this list and has indicated which of these it does not believe are within the scope of the Directive in its first consultation document.51

In many instances, this is because the domestic measure is based on an existing EC measure, which, by virtue of Article 3(4) UCPD, takes precedence over the UCPD. To some extent, the DTI is side-stepping a conceptual difficulty here. Many of the domestic rules so excluded relate to EC-based labelling requirements. However, these do overlap, to some extent, with the UCPD in that a failure correctly to label goods could be regarded as a misleading omission. According to Article 3(4) UCPD, the ‘specific aspects’ of these sectoral measures prevail, but generally the question of sanctions is left to the Member States. This may, therefore, leave a gap in the law. This problem arose in Bryan Roy Lewin v Purity Soft Drinks Limited52 in the context of the Food Labelling Regulations 1996 and the Trade Descriptions Act 1968, but was not resolved by the court.

In any event, one may note in passing that whilst it may not be necessary to review these measures, it would nevertheless provide an opportunity to consider whether these separate measures still need to be kept, or if they could also be made subject to the legislation implementing the UCPD, thereby simplifying domestic law.

As far as the retention of existing measures is concerned, the DTI’s Consultation Paper on implementing the UCPD indicates that consideration is being given to retaining the TDA 1968 in an amended form to include transactional decision tests, for business to consumer transactions and, maybe, for business-to-business transactions also. The possibility of

50C Twigg-Flesner, D Parry, G Howells and A Nordhausen, An Analysis of the Application and Scope of the Unfair Commercial Practices Directive (London, DTI, 2005).

51The Unfair Commercial Practices (UCP) Directive Consultation, above n 28, at 85.

52[2004] EWHC 3119.

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removing the mens rea element from section 14 and extending that section to misleading statements is also being mooted. If this comes about, then the UCPD will not have had a destructive impact on the TDA 1968, but it may actually facilitate improvements to the Act, widening its scope in some situations, with only a very few situations having to be removed from its protection.

8. CONCLUSIONS

It does not seem appropriate to draw any particular conclusions from the preceding discussion. What is clear is that the implementation of the UCPD poses a much greater challenge than that of previous directives in the consumer law field. This task is especially difficult for the UK, with no previous experience in the field of unfair competition law and therefore no existing general legal framework in this area. Instead, there is a plethora of measures dealing with specific aspects of unfair commercial practice or unfair competition. The maximum harmonisation nature of the UCPD requires considerable care in identifying which domestic measures are affected. There will then have to be decisions, perhaps on a case-by-case basis, whether to retain and amend existing measures or to repeal them and let the general measure implementing the UCPD take their place. There is certainly scope for a ‘clean slate’ approach in this area, and a wide range of measures could be repealed. However, such a ‘big bang’ approach may appeal neither to business nor to enforcers, and a more gradual approach may be preferable.

13

Transborder Law Enforcement—

Does it Exist?

HANS W MICKLITZ

1. NEW RULES AND NEW TECHNIQUES ON TRANSBORDER LAW

ENFORCEMENT UNDER DIRECTIVE 2005/29?

STRICTLY SPEAKING THE Directive contains neither new rules nor new techniques on law enforcement. Article 11 largely reiterates the procedures already laid down in Directive 84/450/EEC. It is the overwhelming understanding that the Member States remain free to put enforcement

into the hands of either public authorities or trade and consumer organisations.1 The only remedy to be made available is the action for an injunction, backed by interim relief. Remedies beyond injunctive action, so heavily discussed in the Member States now under the heading of ‘skimming off’, ‘ill-gotten gains’ or ‘disgorgement’ procedures,2 did not play a role in the legislative process. Individual consumers are excluded from the enforcement process, although the Commission seemed initially willing to take an individual action for compensation into consideration.3

The only ‘new rule’ is laid down in Article 13, which obliges Member States to lay down penalties for infringements of national provisions adopted in application of this Directive. Penalties are not to be understood

1For a different reading see HW Micklitz in N Reich and HW Micklitz, Europäisches Verbraucherrecht (Baden-Baden, Nomos, 2003), § 30. 11, in which I argue that the EC secondary law in combination with Art 153 EC Treaty requires the Member States to grant consumer organisations the power to file an action for an injunction, as a minimum standard. The background to the question comes from a reference of the High Court, which wanted to know whether the UK government is obliged to grant the Consumers’ Association standing under Directive 93/13/EEC on unfair terms in consumer contracts. However, the reference was suspended and later withdrawn when the UK government decided to solve the issue in favour of the consumers’ organisation: see for the UK background, J Dickie, ‘Article 7 of the Unfair Terms in Consumer Contracts Directive’ [1996] Consumer Law Journal 112.

2See for an overview of the Member States’ legislation, HW Micklitz in Münchener Kommentar zum UWG (Munich, CH Beck, 2006), Teil UWG § 10 at 14–17.

3See COM(2002)289 final, 18.