Increasing Consumer Rights Is Not Reasonable

The Chamber does not support the draft of the new Consumer Protection Directive of the European Union, because that increases the obligations of companies if they sell goods to consumers. The positive impact of the amendments on the consumers is also questionable, because increasing of the obligations of companies would most probably bring along price increase for the products. 

With the draft of the new European Union Consumer Protection Directive, the European Union is planning to remove the main hindrances related to contract law that are an obstacle for cross-border trade. However, in reality this means also that the draft is planning to increase the obligations of companies for consumer sales. In order to get feedback from its members regarding the amendments, the Chamber prepared a questionnaire, based on which an opinion was formed and sent to the Ministry of Justice.

Extending the company’s period of proof

At the moment, the Law of Obligations Act establishes the principle that in case of consumer sales it is presumed that an incompliance with the contractual conditions that was discovered within six months from the date of transfer of the item to the buyer existed at the time of transfer, unless such presumption is in contradiction with the nature of the item or defect. However, the new draft foresees that the given period is extended to two years and the burden of proof of the reasons of the defect lies on the company for two years.

Members of the Chamber do not support such amendment, because in their opinion, two months is a period that is too long. Our members highlighted in the opinion that two years might be justified for certain types of goods, but for staple goods and for example the moving parts of cars are not products that would not wear down within two years. Entrepreneurs said that it would be very difficult to prove if after two years of using a defect has been caused to a product as a result of using, or the product really was defective. In the traders’ opinion, the expenses that have to be made after the changes on verification, replacing and repairing the  products as well as refunding would significantly increase the prices of the products.

Notifying of defects after discovering the defects

Another important change planned in the draft is that it will no longer be allowed to request from consumers that they notify of the incompliance of the goods during a certain period. At the moment the Law of Obligations Act establishes that in case of consumer sales, the consumer must notify the seller of the incompliance to the contractual obligations within two months after they have learned of the incompliance. The Chamber is against such amendment, because the draft would create a situation where a consumer may continue using a broken product and cause irreversible damages that cannot be repaired later. Furthermore, it might no longer be possible to establish what caused the initial deficiency. Additionally, the traders highlighted that if consumers notify the trader immediately, the warranty may still apply, which will give the consumer additional rights and gives the manufacturer the obligation to replace the product immediately.

In the Chamber’s opinion, the draft additionally establishes many unclear obligations for traders, which you can read more on in the February edition of the Chamber’s magazine Teataja. If the amendments enter into force in the current form, the number of disputes between traders and consumers with increase. Additionally, the amendments may raise the prices of the products, because it would be necessary to find resources for all the disputes and improving, replacing the products as well as repaying money.

At the moment the Directive is a draft and at the moment it is not known if and in which form will the Directive enter into force. Additionally, after the Directive is entered into force, Estonia will have time to transpose the amendments. Thus, it might take several years before the amendments are enforced in Estonia.