Codes of Conduct and the Enforcement of the UCPD Standards

The directive should be amended to increase self-regulation's role in the enforcement of the directive standards. Code-based schemes should be more explicitly incorporated into the legal framework.

6.3.1 'More' codes

The directive should explicitly encourage the drafting of and adherence to codes of conduct. The aforementioned interpretation 'rules' show features of a carrot approach and reduce the thwarting effect of article 6(2)(b) without putting the indispensable stick approach at risk. The devising of codes can be directly stimulated by public authorities but can at the same time be supported by national or European self-regulatory entities, whose functioning should be facilitated by the European institutions. The proposal for a directive on ADR acknowledges the need for complementary means of dispute settlement and may foster the proliferation of codes of conduct.[1] Having regard to the fact that ADR schemes 'usually do not base their decisions only on the law and case law, but [...] focus on the practical solution of the dispute [and] take into account what is reasonable and fair, good practices, term of conditions negotiated ex-ante between business associations and consumer unions, or codes of conduct and equity',[2] the proposed legislation will possibly boost self-regulation in Member States where it remains underdeveloped.

6.3.2 'Fair' codes

Having regard to the directive's full harmonization goal, codes must be tested against the UCPD standards before defining the required level of professional diligence. A fairly unlikely but yet possible outcome of this test could be that a code does not meet the legal standard. Code owners should then be held responsible and article 11(2) should not leave this for the Member States to decide. Public authorities need to play a role in the background, controlling the fairness and enforcement of the codes. The enforcement authorities' interference with the process of self-regulation should, however, depend on the private actors' readiness to cooperate and to integrate legal standards. In first instance, public bodies should confine their involvement to facilitating and rewarding initiatives. The directive should welcome approval schemes at both the national and the European level.

6.3.3 The enforcement of fair codes

The directive should lend more legitimacy to the complementary function of ADR schemes that decide not only on the basis of legal rules but also on the basis of 'fair' codes of conduct. The consumers' interests are secured by fair codes of conduct that are enforced through easy accessible dispute settlement procedures and proactive compliance mechanisms that act as a first port of call. The establishment of such procedures and mechanisms needs to be supported by formal collaborative arrangements, applicable to both agencies and courts and by an adequate monitoring of the ADR schemes' functioning. The UCPD does not expressly stimulate the creation of such means.

The recently enacted ADR directive to a certain extent makes up for this omission. Article 17 of the ADR directive includes rules governing the cooperation between ADR entities and national authorities enforcing EU consumer protection law whereas Chapter IV addresses the monitoring of ADR entities. Hopefully the ADR directive will foster the creation of effective ADR schemes based on fair codes of conduct.[3] The cooperation between ADR and the judiciary should rely on a system of cross-referrals in which an ADR body can refer to a court for determination of the law and consumers would be incited towards opting for ADR instead of filing their complaints at a local court.[4]

Public supervisory bodies and courts should help increase the legitimacy of high-quality private enforcement decisions pertaining to the UCPD standards that have been literally transposed into codes, by expressly acknowledging those decisions. When testing a practice against the statutory general clause, public bodies should not only refer to this clause's interpretation by the field's code owner (section 6.2) but also to the review of a comparable practice by an established independent means.[5] Although this can be considered to be at odds with the principle of self-regulation, it cannot be ruled out that a private enforcement scheme will interpret a code more extensively than the code owner itself.[6] This may help the public body define where the legal standard lies.

European Codes of Conduct

Finally, the directive should explicitly encourage the drawing of EU-wide codes like the E-commerce Directive does. EU-wide codes can contribute to harmonization as long as they:

• are widely supported and preferably publicly endorsed by the Commission,

• are rigorously enforced - both by code owners and by (closely cooperating[7]) public authorities, and

• play an important role in concretizing the directive's general clauses.

Consumer organizations should participate in the development of EU-wide codes. There is, however, a lack of institutional mechanisms that could help establish a dialogue between consumers and traders at the EU level. The consumer programme 2014-2020 projects to offer grants for action to EU-wide bodies for the development of codes of conduct but does unfortunately not intend to develop such mechanisms.[8]

In the wake of the implementation of the Services Directive the Commission suggested the following measures to stimulate the drafting of codes of conduct:[9]

• ensuring transparency of existing codes;

• ensuring that the recipients of services are informed;

• raising the profile of European codes of conduct (by granting labels -possibly a European label, professional cards, registration of members);

• heightening awareness of the importance of codes of conduct (information campaigns).

These proposals were only marginally supported by the Commission and have not had a significant impact on self-regulatory practice at the European level. The time may have come for a follow-up and a more substantial role for the Commission.

  • [1] Directive 2013/11/EU of the European Parliament and of the Council of 21 May 2013 on Alternative Dispute Resolution for Consumer Disputes and Amending Regulation (EC) No 2006/2004 and Directive 2009/22/EC (OJ 2013 L 165/63).
  • [2] SEC (2011) 1408 final.
  • [3] H-W Micklitz, 'The Expulsion of the Concept of Protection from the Consumer Law and the Return of Social Elements in the Civil Law: A Bittersweet Polemic' (2012) 35 J Consum Policy 292 considers the 'access to justice and the enforcement of rights' to be at stake in this proposal. The free access to justice should indeed always be warranted and the quality of the codes and associated ADR schemes ought to be controlled by public bodies. The out-of-court procedure may well be the only procedure a consumer considers to enroll. Consumers opting for out-of-court dispute settlement would otherwise often have refrained from filling their complaint at a local court. Dutch and English ADR schemes function properly. This expertise will most certainly be shared at the European level. If consumers did not feel adequately protected by the dispute settlement schemes, they would most probably turn their back on out-of-court procedures.
  • [4] Hodges et al. (n 76) 415.
  • [5] I do not refer to the situation where a supervisory body or court is reviewing a decision by a private body but to the situation where a commercial practice is directly placed under public scrutiny.
  • [6] EH Hoogenraad, '"Ieder voordeel heb zijn nadeel". De andere zijde van zelfregulering' (2005) Intellectuele Eigendom en Reclamerecht 67.
  • [7] When assessing whether a trader acts in breach of an EU-wide code, national enforcement bodies would need to cooperate within the Enforcement Network created by Regulation (EC) No 2006/2004. General clauses in a European Code may hamper harmonization insofar as the national authorities acting as 'last enforcers' have different interpretations of the commitments that were reached. It goes without saying that codes of conduct can only lead to harmonization provided national self-regulatory bodies, public authorities and courts cooperate closely.
  • [8] European Commission, 'Proposal for a Regulation of the European Parliament and of the Council on a Consumer Programme 2014-2020' COM (2011) 707 final, 15.
  • [9] European Communities (n 126) 17-19.
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